/PRNewswire/ -- Blue Cross and Blue Shield of Georgia (BCBSGa) today announced it is extending the grace period on premium payments to help members directly impacted by Georgia tornados on April 27 and 28. Extensive property damage, injuries and death are attributed to these storms.
A Governor's State of Emergency remains in effect, and a Presidential Disaster Declaration has been made for Bartow, Catoosa, Coweta, Dade, Floyd, Greene, Lamar, Meriwether, Monroe, Morgan, Pickens, Polk, Rabun, Spalding, Troup and Walker Counties. Additionally, the damage caused by the tornados and storms have had a significant impact on transportation throughout the state, including disruptions in mail service.
Mail delivery disruptions may have caused delays in BCBSGa receiving premium payments, and as a result, BCBSGa has extended the grace period on premium payments for Georgia members for payments due in April and May. Members impacted by the tornados that may receive a delinquency notice or cancellation notice need to contact BCBSGa to have the delinquency notice waived. Policies will not be cancelled for this timeframe if premium payments were delayed due to disruptions in mail service.
"This is a very tragic time for many Georgians and it is of the utmost importance that our members not experience additional hardships," said Morgan Kendrick, President, BCBSGa. "We are taking every precaution possible, including extending grace periods and shifting staff roles to assist in the processing of any premium payment backlogs."
If members have questions about their premium payment status due to mail disruptions caused by recent inclement weather conditions, they should call the customer service number on the back of their Member ID card, and if they do not have their card, they should call 1-866-417-7107.
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Showing posts with label premiums. Show all posts
Showing posts with label premiums. Show all posts
Thursday, May 05, 2011
Tuesday, December 21, 2010
New Affordable Care Act rules shed light on high health insurance rate hikes
New proposed Affordable Care Act regulations announced today by the U.S. Department of Health and Human Services (HHS) will bring new transparency and scrutiny to proposed health insurance rate increases. These proposed rules allow HHS to work with states to require insurers to publicly disclose and justify unreasonable rate increases.
“Year after year, insurance company profits soar, while Americans pay more for less health care coverage,” said Secretary Sebelius. “The Affordable Care Act is bringing unprecedented transparency and oversight to insurance premiums to help reign in the kind of excessive and unreasonable rate increases that have made insurance unaffordable for so many families.”
Health insurance premiums have risen rapidly over the past decade, straining pocketbooks for American families and businesses. Since 1999, average premiums for family coverage have risen 131 percent.
The Affordable Care Act has already begun to help states strengthen or create rate review processes. On August 16, HHS awarded $46 million to 45 states and the District of Columbia to help them improve their oversight of proposed health insurance rate increases. This is part of $250 million that the health reform law makes available to states to take action against insurers seeking unreasonable rate hikes.
Today’s proposed regulations will build on these efforts by requiring insurers in all states to publicly justify any unreasonable rate increases beginning in 2011. In 2011, proposed rate increases of 10 percent or higher will be publicly disclosed and thoroughly reviewed to determine if the rate increase is unreasonable. After 2011, state-specific thresholds would be set using data and trends that better reflect cost trends particular to each state. Insurance company’s justifications for unreasonable increases will be posted on HealthCare.gov and the insurance plan’s website.
“The proposed rate review policy will empower consumers, promote competition, encourage insurers to do more to control health care costs and discourage insurers from charging premiums which are unjustified,” said Jay Angoff, director of HHS’ Office of Consumer Information and Insurance Oversight.
Under the proposed regulation, states with effective rate review systems would conduct the reviews. If a state lacks the resources or authority to do thorough actuarial reviews, HHS would conduct them. Meanwhile, HHS will continue to make resources available to states to strengthen their rate review processes.
In 2014, the Affordable Care Act empowers states to exclude health plans that show a pattern of excessive or unjustified premium increases from the new health insurance exchanges.
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“Year after year, insurance company profits soar, while Americans pay more for less health care coverage,” said Secretary Sebelius. “The Affordable Care Act is bringing unprecedented transparency and oversight to insurance premiums to help reign in the kind of excessive and unreasonable rate increases that have made insurance unaffordable for so many families.”
Health insurance premiums have risen rapidly over the past decade, straining pocketbooks for American families and businesses. Since 1999, average premiums for family coverage have risen 131 percent.
The Affordable Care Act has already begun to help states strengthen or create rate review processes. On August 16, HHS awarded $46 million to 45 states and the District of Columbia to help them improve their oversight of proposed health insurance rate increases. This is part of $250 million that the health reform law makes available to states to take action against insurers seeking unreasonable rate hikes.
Today’s proposed regulations will build on these efforts by requiring insurers in all states to publicly justify any unreasonable rate increases beginning in 2011. In 2011, proposed rate increases of 10 percent or higher will be publicly disclosed and thoroughly reviewed to determine if the rate increase is unreasonable. After 2011, state-specific thresholds would be set using data and trends that better reflect cost trends particular to each state. Insurance company’s justifications for unreasonable increases will be posted on HealthCare.gov and the insurance plan’s website.
“The proposed rate review policy will empower consumers, promote competition, encourage insurers to do more to control health care costs and discourage insurers from charging premiums which are unjustified,” said Jay Angoff, director of HHS’ Office of Consumer Information and Insurance Oversight.
Under the proposed regulation, states with effective rate review systems would conduct the reviews. If a state lacks the resources or authority to do thorough actuarial reviews, HHS would conduct them. Meanwhile, HHS will continue to make resources available to states to strengthen their rate review processes.
In 2014, the Affordable Care Act empowers states to exclude health plans that show a pattern of excessive or unjustified premium increases from the new health insurance exchanges.
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Saturday, November 27, 2010
New Affordable Care Act rules give consumers better value for insurance premiums
New regulations issued November 22 by the Department of Health and Human Services (HHS) require health insurers to spend 80 to 85 percent of consumers’ premiums on direct care for patients and efforts to improve care quality. This regulation, known as the “medical loss ratio” provision of the Affordable Care Act, will make the insurance marketplace more transparent and make it easier for consumers to purchase plans that provide better value for their money.
“Thanks to the Affordable Care Act, millions of Americans will get better value for their health insurance premium dollar,” said HHS Secretary Kathleen Sebelius. “These new rules are an important step to hold insurance companies accountable and increase value for consumers.”
Today, many insurance companies spend a substantial portion of consumers’ premium dollars on administrative costs and profits, including executive salaries, overhead, and marketing. Thanks to the Affordable Care Act, consumers will receive more value for their premium dollar because insurance companies will be required to spend 80 to 85 percent of premium dollars on medical care and health care quality improvement, rather than on administrative costs, starting in 2011. If they don’t, the insurance companies will be required to provide a rebate to their customers starting in 2012.
In 2011, the new rules will protect up to 74.8 million insured Americans and estimates indicate that up to 9 million Americans could be eligible for rebates starting in 2012 worth up to $1.4 billion. Average rebates per person could total $164 in the individual market. Important details regarding the new regulation are included below.
The medical loss ratio regulation outlines disclosure and reporting requirements, how insurance companies will calculate their medical loss ratio and provide rebates, and how adjustments could be made to the medical loss ratio standard to guard against market destabilization.
Beginning in 2011, the law requires that insurance companies publicly report how they spend premium dollars, providing meaningful information to consumers. Also beginning in 2011, insurers are required to spend at least 80 percent of the premium dollars they collect on medical care and quality improvement activities. Insurance companies that are not meeting the medical loss ratio standard will be required to provide rebates to their consumers. Insurers will be required to make the first round of rebates to consumers in 2012.
“These rules were carefully developed through a transparent and fair process with significant input from the public, the States, and other key stakeholders,” said Jay Angoff, director of the Office of Consumer Information and Insurance Oversight at HHS. “As we build a bridge to 2014, when better, more affordable options are available to consumers, these rules will help make health insurance fairer for consumers now.”
The Affordable Care Act required the National Association of Insurance Commissioners (NAIC) to develop uniform definitions and methodologies for calculating insurance companies’ medical loss ratios. Insurance commissioners in every State have a responsibility to protect the interests of the general public, policyholders, and enrollees within their respective States. Today’s regulation certifies and adopts the recommendations submitted to the Secretary of HHS on October 27, 2010 by the NAIC. It also incorporates recommendations from a letter sent to the Secretary by the NAIC on October 13, 2010.
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“Thanks to the Affordable Care Act, millions of Americans will get better value for their health insurance premium dollar,” said HHS Secretary Kathleen Sebelius. “These new rules are an important step to hold insurance companies accountable and increase value for consumers.”
Today, many insurance companies spend a substantial portion of consumers’ premium dollars on administrative costs and profits, including executive salaries, overhead, and marketing. Thanks to the Affordable Care Act, consumers will receive more value for their premium dollar because insurance companies will be required to spend 80 to 85 percent of premium dollars on medical care and health care quality improvement, rather than on administrative costs, starting in 2011. If they don’t, the insurance companies will be required to provide a rebate to their customers starting in 2012.
In 2011, the new rules will protect up to 74.8 million insured Americans and estimates indicate that up to 9 million Americans could be eligible for rebates starting in 2012 worth up to $1.4 billion. Average rebates per person could total $164 in the individual market. Important details regarding the new regulation are included below.
The medical loss ratio regulation outlines disclosure and reporting requirements, how insurance companies will calculate their medical loss ratio and provide rebates, and how adjustments could be made to the medical loss ratio standard to guard against market destabilization.
Beginning in 2011, the law requires that insurance companies publicly report how they spend premium dollars, providing meaningful information to consumers. Also beginning in 2011, insurers are required to spend at least 80 percent of the premium dollars they collect on medical care and quality improvement activities. Insurance companies that are not meeting the medical loss ratio standard will be required to provide rebates to their consumers. Insurers will be required to make the first round of rebates to consumers in 2012.
“These rules were carefully developed through a transparent and fair process with significant input from the public, the States, and other key stakeholders,” said Jay Angoff, director of the Office of Consumer Information and Insurance Oversight at HHS. “As we build a bridge to 2014, when better, more affordable options are available to consumers, these rules will help make health insurance fairer for consumers now.”
The Affordable Care Act required the National Association of Insurance Commissioners (NAIC) to develop uniform definitions and methodologies for calculating insurance companies’ medical loss ratios. Insurance commissioners in every State have a responsibility to protect the interests of the general public, policyholders, and enrollees within their respective States. Today’s regulation certifies and adopts the recommendations submitted to the Secretary of HHS on October 27, 2010 by the NAIC. It also incorporates recommendations from a letter sent to the Secretary by the NAIC on October 13, 2010.
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Friday, October 01, 2010
Affordable Care Act gives consumers new tools, makes health insurance market more transparent
The U.S. Department of Health and Human Services (HHS) today announced that new information and tools have been added to HHS' consumer website www.healthcare.gov that will make the health insurance market more transparent, increase competition and help lower costs for individuals.
For the first time ever, price estimates for private insurance policies are available, allowing consumers to easily compare health insurance plans - putting consumers, not their insurance companies, in charge by providing one-stop shopping and taking the guesswork and confusion out of buying insurance.
To help consumers make more informed choices, the site includes new information including two notable metrics never before made public:
* Insurance providers are required to provide the percentage of people who applied for insurance and were denied coverage.
* Insurance companies are required to provide the percentage of applicants who were charged higher premiums because of their health status.
"Millions of Americas have already logged-on to www.HealthCare.gov's Insurance Finder to see what health coverage options are available to them," said Secretary Kathleen Sebelius. "This already unprecedented ability to search and compare coverage options is getting better with the new benefits and price information now available. These changes will help Americans find coverage that meets their needs and that gives them value for their dollars now."
Created under the Affordable Care Act, www.HealthCare.gov was launched July 1, 2010, and is the first website of its kind to bring information and links to health insurance plans into one place to make it easy for consumers to learn about and compare their insurance choices. HHS' Office of Consumer Information and Insurance Oversight (OCIIO) worked to define and collect detailed benefits and premium rating information from insurers across the country, and starting October 1, 2010, consumers will also be able to find information about health insurance options such as:
* Monthly premium estimates;
* Cost-sharing information, including annual deductibles and out-of-pocket limits;
* Major categories of services covered;
* Consumer's share of cost for these services;
* Percent of people in the plan who pay more than the base premium estimate due to their health status; and
* Percent of people denied coverage from a health plan;
More than 225 insurance companies have provided information about their individual and family plans for more than 4,400 policies, including policies in every state and the District of Columbia. Consumers can search for and compare information on plans available to them based on their age, gender, family size, tobacco use and location.
"We applaud the insurance companies that have provided us this information about their products. Together, we are improving competition in the insurance marketplace," said Jay Angoff, director of the Office for Consumer Information and Insurance Oversight. "This type of transparent competition is critical to improving quality of coverage and lowering costs for consumers."
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For the first time ever, price estimates for private insurance policies are available, allowing consumers to easily compare health insurance plans - putting consumers, not their insurance companies, in charge by providing one-stop shopping and taking the guesswork and confusion out of buying insurance.
To help consumers make more informed choices, the site includes new information including two notable metrics never before made public:
* Insurance providers are required to provide the percentage of people who applied for insurance and were denied coverage.
* Insurance companies are required to provide the percentage of applicants who were charged higher premiums because of their health status.
"Millions of Americas have already logged-on to www.HealthCare.gov's Insurance Finder to see what health coverage options are available to them," said Secretary Kathleen Sebelius. "This already unprecedented ability to search and compare coverage options is getting better with the new benefits and price information now available. These changes will help Americans find coverage that meets their needs and that gives them value for their dollars now."
Created under the Affordable Care Act, www.HealthCare.gov was launched July 1, 2010, and is the first website of its kind to bring information and links to health insurance plans into one place to make it easy for consumers to learn about and compare their insurance choices. HHS' Office of Consumer Information and Insurance Oversight (OCIIO) worked to define and collect detailed benefits and premium rating information from insurers across the country, and starting October 1, 2010, consumers will also be able to find information about health insurance options such as:
* Monthly premium estimates;
* Cost-sharing information, including annual deductibles and out-of-pocket limits;
* Major categories of services covered;
* Consumer's share of cost for these services;
* Percent of people in the plan who pay more than the base premium estimate due to their health status; and
* Percent of people denied coverage from a health plan;
More than 225 insurance companies have provided information about their individual and family plans for more than 4,400 policies, including policies in every state and the District of Columbia. Consumers can search for and compare information on plans available to them based on their age, gender, family size, tobacco use and location.
"We applaud the insurance companies that have provided us this information about their products. Together, we are improving competition in the insurance marketplace," said Jay Angoff, director of the Office for Consumer Information and Insurance Oversight. "This type of transparent competition is critical to improving quality of coverage and lowering costs for consumers."
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Statement on the application of medical loss ratio standards to certain health plans under the Affordable Care Act
Jay Angoff, director of the Office of Consumer Information and Insurance Oversight, within the U.S. Department of Health and Human Services (HHS) released the following statement September 30, regarding the application of medical loss ratio standards to certain health plans under the Affordable Care Act:
"As many employers and insurers consider health insurance options for 2011, one question that has been raised is the applicability of provisions of the Affordable Care Act to health plans and coverage with special circumstances. HHS remains committed to implementing the law in a way that minimizes disruption to coverage that is available today while also ensuring that consumers receive the benefits the Act provides.
"For example, pursuant to the Affordable Care Act and our regulations, HHS recently announced an expedited process for plans to apply for a waiver from the requirement in the Affordable Care Act establishing minimum annual limits where such limits would result in decreased access or increased premiums. HHS has approved dozens of these waiver requests, most often filed by so-called "mini-med" plans, and in doing so, has ensured the continuation of health coverage for workers and their families. Complete waiver applications were generally processed in 48 hours.
"More recently, the issue of the applicability of the medical loss ratio requirements to plans such as mini-med plans has come up. HHS has not yet issued regulations implementing the medical loss ratio requirements because the Affordable Care Act tasks the National Association of Insurance Commissioners (NAIC) with first making recommendations to the Secretary.
"Although the NAIC is close to completing its work, we understand that some employers must soon make decisions regarding coverage options for 2011. As such, we fully intend to exercise her discretion under the new law to address the special circumstances of mini-med plans in the medical loss ratio calculations. According to the Affordable Care Act, medical loss ratio "methodologies shall be designed to take into account the special circumstance of smaller plans, different types of plans, and newer plans." We recognize that mini-med plans are often characterized by a relatively high expense structure relative to the lower premiums charged for these types of policies. We intend to address these and other special circumstances in forthcoming regulations."
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"As many employers and insurers consider health insurance options for 2011, one question that has been raised is the applicability of provisions of the Affordable Care Act to health plans and coverage with special circumstances. HHS remains committed to implementing the law in a way that minimizes disruption to coverage that is available today while also ensuring that consumers receive the benefits the Act provides.
"For example, pursuant to the Affordable Care Act and our regulations, HHS recently announced an expedited process for plans to apply for a waiver from the requirement in the Affordable Care Act establishing minimum annual limits where such limits would result in decreased access or increased premiums. HHS has approved dozens of these waiver requests, most often filed by so-called "mini-med" plans, and in doing so, has ensured the continuation of health coverage for workers and their families. Complete waiver applications were generally processed in 48 hours.
"More recently, the issue of the applicability of the medical loss ratio requirements to plans such as mini-med plans has come up. HHS has not yet issued regulations implementing the medical loss ratio requirements because the Affordable Care Act tasks the National Association of Insurance Commissioners (NAIC) with first making recommendations to the Secretary.
"Although the NAIC is close to completing its work, we understand that some employers must soon make decisions regarding coverage options for 2011. As such, we fully intend to exercise her discretion under the new law to address the special circumstances of mini-med plans in the medical loss ratio calculations. According to the Affordable Care Act, medical loss ratio "methodologies shall be designed to take into account the special circumstance of smaller plans, different types of plans, and newer plans." We recognize that mini-med plans are often characterized by a relatively high expense structure relative to the lower premiums charged for these types of policies. We intend to address these and other special circumstances in forthcoming regulations."
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Humana and Walmart Announce Innovative Medicare Part D Prescription Drug Plan with Lowest National Monthly Premium Offered in all 50 States and D.C.¹
(BUSINESS WIRE)--Today, Humana Inc. (NYSE: HUM) announced an innovative Medicare Part D prescription drug plan, co-branded with Wal-Mart Stores, Inc. (NYSE: WMT) or (“Walmart”), that can provide significant savings on monthly plan premiums and prescription medicine copayments and cost-shares for Medicare beneficiaries, including seniors and people with disabilities.
The Humana Walmart-Preferred Rx Plan (PDP) offers one low national monthly plan premium of $14.80 – according to CMS¹, the lowest national plan premium in 2011 for a standalone Medicare Part D plan premium offered in all 50 states and Washington, D.C. This new co-branded prescription drug plan can save a typical Medicare Part D beneficiary who enrolls in the Humana Walmart-Preferred Rx Plan (PDP) an estimated average of more than $450² in 2011 on plan premiums and prescription medication copayments and cost-shares when compared with the average total costs for a Part D prescription drug plan in 2010. With nearly 18 million Americans relying on Medicare Part D for their prescriptions³, the Humana Walmart-Preferred Rx Plan (PDP) provides an affordable prescription solution for those who need it most.
“One of the primary goals of health care reform is to make health coverage more affordable – and that’s what we’re doing with the introduction of this low-cost Medicare Part D plan,” said William Fleming, PharmD, vice president of Humana Pharmacy Solutions. “People are more likely to take the medications prescribed for them when they can afford those medications. And adhering to prescription-drug regimens can enable people to be healthier and prevent future illness. At Humana, we believe that this prevention helps people live healthier lives and achieve lifelong well-being.”
“We know every dollar counts, especially when you live on a fixed income. We believe no one should have to choose between buying their groceries or their medications,” said John Agwunobi, M.D., president of Walmart’s Health and Wellness division. “Financial health is a fundamental part of a person’s well-being. At Walmart, the customer is always front and center, and that is why we are committed to doing everything we can to ensure seniors have access to the medications they need at a price they can afford.”
Humana Walmart-Preferred Rx Plan (PDP): Benefits and Details
* One low monthly rate nationwide. The monthly plan premium is less than $15 a month for everyone, regardless of where they live.
-According to CMS, the $14.80 monthly plan premium is the lowest national plan premium in 2011 for a standalone Medicare Part D prescription drug plan offered in all 50 states and Washington, D.C.1
-The Humana Walmart-Preferred Rx Plan (PDP) offers a monthly plan premium of $14.80, which is less than half the weighted 2010 national average for Medicare Part D prescription drug plans’ monthly plan premiums⁴.
* Low copayments when plan members use preferred pharmacies like Walmart, Neighborhood Market or Sam’s Club pharmacies:
-In-store copayments (at preferred pharmacies) on generic prescriptions start as low as $2 when plan members use preferred pharmacies.
-Copayments as low as $0 for generic prescriptions filled via Humana’s RightSource home-delivery prescription service.
* A broad competitive formulary comparable to other plans, with a list of prescription drugs included in the plan available at humana-medicare.com.
How to Enroll in the Plan: Call, Click or Go
Information on the plan is available starting today; annual enrollment for Medicare plans begins Monday, Nov. 15, 2010, and continues through Dec. 31, 2010. To get more information on the Humana Walmart-Preferred Rx Plan (PDP) and to learn more about these savings:
* Call Humana to enroll at 1-800-899-0441. For TTY, call 711, 8 a.m. to 8 p.m., seven days a week.
* Click on humana-medicare.com or medicare.gov to enroll.
* Click on walmart.com/rxplan or samsclub.com/rxplan for additional plan details and links to enroll.
* Visit a Walmart store to speak to a Humana representative.
o Informational kiosks, including many staffed by Humana representatives, are available in approximately 3,000 Walmart stores across the country. Medicare beneficiaries can click on “Find a Location Near You” at walmart.com/rxplan to locate an on-site Humana representative.
Medicare Part D Background
Medicare Part D is the prescription drug program supported by the federal government. According to the Kaiser Family Foundation, nearly 18 million people are currently enrolled in a standalone Part D plan3 and Families USA reports that seniors generate one-third of all prescriptions filled in the United States⁵.
References
1 “Centers for Medicare & Medicaid Services.” Click on the “2011 Drug Plan Information - State Fact Sheets” under “Spotlights.” September 2010. http://www.cms.gov/center/openenrollment.asp
2 Savings estimate is based on a comparison between 1) the projected average nationwide out-of-pocket costs for the 2011 benefit year for the average Medicare beneficiary who enrolls in the Humana Walmart-Preferred Rx Plan (PDP) and fills their prescriptions in-store at preferred pharmacies like Walmart, Sam's Club, and Neighborhood Market pharmacies, and 2) the projected average nationwide out-of-pocket costs for the 2010 benefit year for the average Medicare beneficiary. Calculations based in part on industry average PDP premium and benefit information from the “Medicare Part D 2010 Spotlight, Medicare Prescription Drug Plans in 2010 and Key Changes over Five Years”, an independent review and analysis of CMS data by the Kaiser Family Foundation (September 2010). Actual savings may vary. For some beneficiaries, actual out-of-pocket costs may be more. Savings estimate may be updated when 2011 benefit year data becomes publicly available.
3 “The Henry J. Kaiser Family Foundation.” Medicare: A Primer. Chart: Prescription Drug Coverage Among Medicare Beneficiaries, 2010, Page 8. April 2010. http://www.kff.org/medicare/upload/7615-03.pdf
4 “The Henry J. Kaiser Family Foundation.” Medicare Part D 2010 Data Spotlight. Chart: Exhibit 2: Weighted Monthly PDP Premiums, 2006-2010, Page 9. September 2010. http://www.kff.org/medicare/8096.cfm
5 “Families USA.” Cost Overdose: Growth in Drug Spending for the Elderly, 1992 – 2010; Figure 1: Seniors Consume a Disproportionate Share of Drug Expenses, Page 2. July 2000.
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The Humana Walmart-Preferred Rx Plan (PDP) offers one low national monthly plan premium of $14.80 – according to CMS¹, the lowest national plan premium in 2011 for a standalone Medicare Part D plan premium offered in all 50 states and Washington, D.C. This new co-branded prescription drug plan can save a typical Medicare Part D beneficiary who enrolls in the Humana Walmart-Preferred Rx Plan (PDP) an estimated average of more than $450² in 2011 on plan premiums and prescription medication copayments and cost-shares when compared with the average total costs for a Part D prescription drug plan in 2010. With nearly 18 million Americans relying on Medicare Part D for their prescriptions³, the Humana Walmart-Preferred Rx Plan (PDP) provides an affordable prescription solution for those who need it most.
“One of the primary goals of health care reform is to make health coverage more affordable – and that’s what we’re doing with the introduction of this low-cost Medicare Part D plan,” said William Fleming, PharmD, vice president of Humana Pharmacy Solutions. “People are more likely to take the medications prescribed for them when they can afford those medications. And adhering to prescription-drug regimens can enable people to be healthier and prevent future illness. At Humana, we believe that this prevention helps people live healthier lives and achieve lifelong well-being.”
“We know every dollar counts, especially when you live on a fixed income. We believe no one should have to choose between buying their groceries or their medications,” said John Agwunobi, M.D., president of Walmart’s Health and Wellness division. “Financial health is a fundamental part of a person’s well-being. At Walmart, the customer is always front and center, and that is why we are committed to doing everything we can to ensure seniors have access to the medications they need at a price they can afford.”
Humana Walmart-Preferred Rx Plan (PDP): Benefits and Details
* One low monthly rate nationwide. The monthly plan premium is less than $15 a month for everyone, regardless of where they live.
-According to CMS, the $14.80 monthly plan premium is the lowest national plan premium in 2011 for a standalone Medicare Part D prescription drug plan offered in all 50 states and Washington, D.C.1
-The Humana Walmart-Preferred Rx Plan (PDP) offers a monthly plan premium of $14.80, which is less than half the weighted 2010 national average for Medicare Part D prescription drug plans’ monthly plan premiums⁴.
* Low copayments when plan members use preferred pharmacies like Walmart, Neighborhood Market or Sam’s Club pharmacies:
-In-store copayments (at preferred pharmacies) on generic prescriptions start as low as $2 when plan members use preferred pharmacies.
-Copayments as low as $0 for generic prescriptions filled via Humana’s RightSource home-delivery prescription service.
* A broad competitive formulary comparable to other plans, with a list of prescription drugs included in the plan available at humana-medicare.com.
How to Enroll in the Plan: Call, Click or Go
Information on the plan is available starting today; annual enrollment for Medicare plans begins Monday, Nov. 15, 2010, and continues through Dec. 31, 2010. To get more information on the Humana Walmart-Preferred Rx Plan (PDP) and to learn more about these savings:
* Call Humana to enroll at 1-800-899-0441. For TTY, call 711, 8 a.m. to 8 p.m., seven days a week.
* Click on humana-medicare.com or medicare.gov to enroll.
* Click on walmart.com/rxplan or samsclub.com/rxplan for additional plan details and links to enroll.
* Visit a Walmart store to speak to a Humana representative.
o Informational kiosks, including many staffed by Humana representatives, are available in approximately 3,000 Walmart stores across the country. Medicare beneficiaries can click on “Find a Location Near You” at walmart.com/rxplan to locate an on-site Humana representative.
Medicare Part D Background
Medicare Part D is the prescription drug program supported by the federal government. According to the Kaiser Family Foundation, nearly 18 million people are currently enrolled in a standalone Part D plan3 and Families USA reports that seniors generate one-third of all prescriptions filled in the United States⁵.
References
1 “Centers for Medicare & Medicaid Services.” Click on the “2011 Drug Plan Information - State Fact Sheets” under “Spotlights.” September 2010. http://www.cms.gov/center/openenrollment.asp
2 Savings estimate is based on a comparison between 1) the projected average nationwide out-of-pocket costs for the 2011 benefit year for the average Medicare beneficiary who enrolls in the Humana Walmart-Preferred Rx Plan (PDP) and fills their prescriptions in-store at preferred pharmacies like Walmart, Sam's Club, and Neighborhood Market pharmacies, and 2) the projected average nationwide out-of-pocket costs for the 2010 benefit year for the average Medicare beneficiary. Calculations based in part on industry average PDP premium and benefit information from the “Medicare Part D 2010 Spotlight, Medicare Prescription Drug Plans in 2010 and Key Changes over Five Years”, an independent review and analysis of CMS data by the Kaiser Family Foundation (September 2010). Actual savings may vary. For some beneficiaries, actual out-of-pocket costs may be more. Savings estimate may be updated when 2011 benefit year data becomes publicly available.
3 “The Henry J. Kaiser Family Foundation.” Medicare: A Primer. Chart: Prescription Drug Coverage Among Medicare Beneficiaries, 2010, Page 8. April 2010. http://www.kff.org/medicare/upload/7615-03.pdf
4 “The Henry J. Kaiser Family Foundation.” Medicare Part D 2010 Data Spotlight. Chart: Exhibit 2: Weighted Monthly PDP Premiums, 2006-2010, Page 9. September 2010. http://www.kff.org/medicare/8096.cfm
5 “Families USA.” Cost Overdose: Growth in Drug Spending for the Elderly, 1992 – 2010; Figure 1: Seniors Consume a Disproportionate Share of Drug Expenses, Page 2. July 2000.
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Wednesday, August 25, 2010
Unemployed See COBRA Costs Increase in 2010, While Current Workers Brace for More Health Care Cost Shifting in 2011, Says Aon Consulting
/PRNewswire/ -- As the national unemployment rate continues to hover around 10 percent, health care costs for those jobless Americans have seen a year-over-year increase, according to Aon Consulting, the global benefits and human capital consulting business of Aon Corporation (NYSE:AON) .
Aon Consulting surveyed 1,079 employers nationwide in its 2010 Benefits Survey, and found an increase in monthly COBRA* contributions for terminated employees. Specifically, the average monthly cost for employee-only HMO coverage for a terminated worker is $429 this year, compared to $399 for the same coverage in 2009. For employee plus family, the former employee is paying $1,251 a month this year, compared to $1,171 per month last year. As for PPO coverage, the average monthly cost for employee only is $449 in 2010, compared to $439 in 2009, and for employee plus family, the cost tops out at a monthly average of $1,310 this year, versus $1,275 last year. (Click on the following link to see charts on a detailed year-over-year comparison: http://aon.mediaroom.com/index.php?s=43&item=1998)
"The increased frequency and duration of COBRA use is creating a significant strain on the program, leading to higher costs," said John Zern, executive vice president and Health & Benefits Practice director with Aon Consulting. "Those who are unemployed, and facing uncertainty about employment prospects and future COBRA availability, are utilizing the program more than we've traditionally seen to treat a variety of conditions prior to potentially losing coverage. This coupled with the high unemployment rate, is placing the COBRA program in a unique and unprecedented position."
As for current employees, they can expect to shoulder more of the expense related to health coverage in 2011, according to this survey. In fact, 65 percent of employers plan to increase cost sharing next year for things such as deductibles, co-pays and out-of-pocket maximums. What's more, 57 percent of companies say they will ask employees to contribute more for the overall cost of health care in 2011. The amount of cost sharing implemented by employers varies. On plan design (e.g., deductibles, co-pays and out-of-pocket maximums), 46 percent of employers are shifting costs to employees equal to the overall renewal increase, while an additional 46 percent are shifting costs to workers that are less than the overall renewal increase. For overall health plan cost, 40 percent of employers say the additional worker contributions will be equal to the 2011 renewal increase, and 49 percent indicate that workers will be asked to pay less than next year's renewal increase.
"We believe the new health reform law will increase health care costs by 2 percent to 4 percent during the next three years," said Tom Lerche, senior vice president with Aon Consulting. "In addition, we expect to see new costs related to excise taxes and potential cost shifting from reductions in Medicare reimbursement to providers, which will be on top of existing long-term medical trend inflation. These factors will lead many employers to consider increased employee contributions for health coverage, as well as plan design cost sharing."
To learn more about Aon Consulting's 2010 Benefits Survey, please visit www.aon.com/2010survey.
* COBRA - refers to the Consolidated Budget Reconciliation Act of 1985, and includes provisions for members of company health plans who have lost their coverage due to a "qualifying event" to continue coverage at the employee's expense for a period of time.
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Aon Consulting surveyed 1,079 employers nationwide in its 2010 Benefits Survey, and found an increase in monthly COBRA* contributions for terminated employees. Specifically, the average monthly cost for employee-only HMO coverage for a terminated worker is $429 this year, compared to $399 for the same coverage in 2009. For employee plus family, the former employee is paying $1,251 a month this year, compared to $1,171 per month last year. As for PPO coverage, the average monthly cost for employee only is $449 in 2010, compared to $439 in 2009, and for employee plus family, the cost tops out at a monthly average of $1,310 this year, versus $1,275 last year. (Click on the following link to see charts on a detailed year-over-year comparison: http://aon.mediaroom.com/index.php?s=43&item=1998)
"The increased frequency and duration of COBRA use is creating a significant strain on the program, leading to higher costs," said John Zern, executive vice president and Health & Benefits Practice director with Aon Consulting. "Those who are unemployed, and facing uncertainty about employment prospects and future COBRA availability, are utilizing the program more than we've traditionally seen to treat a variety of conditions prior to potentially losing coverage. This coupled with the high unemployment rate, is placing the COBRA program in a unique and unprecedented position."
As for current employees, they can expect to shoulder more of the expense related to health coverage in 2011, according to this survey. In fact, 65 percent of employers plan to increase cost sharing next year for things such as deductibles, co-pays and out-of-pocket maximums. What's more, 57 percent of companies say they will ask employees to contribute more for the overall cost of health care in 2011. The amount of cost sharing implemented by employers varies. On plan design (e.g., deductibles, co-pays and out-of-pocket maximums), 46 percent of employers are shifting costs to employees equal to the overall renewal increase, while an additional 46 percent are shifting costs to workers that are less than the overall renewal increase. For overall health plan cost, 40 percent of employers say the additional worker contributions will be equal to the 2011 renewal increase, and 49 percent indicate that workers will be asked to pay less than next year's renewal increase.
"We believe the new health reform law will increase health care costs by 2 percent to 4 percent during the next three years," said Tom Lerche, senior vice president with Aon Consulting. "In addition, we expect to see new costs related to excise taxes and potential cost shifting from reductions in Medicare reimbursement to providers, which will be on top of existing long-term medical trend inflation. These factors will lead many employers to consider increased employee contributions for health coverage, as well as plan design cost sharing."
To learn more about Aon Consulting's 2010 Benefits Survey, please visit www.aon.com/2010survey.
* COBRA - refers to the Consolidated Budget Reconciliation Act of 1985, and includes provisions for members of company health plans who have lost their coverage due to a "qualifying event" to continue coverage at the employee's expense for a period of time.
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Thursday, August 12, 2010
Consumer Advocates Ask for White House/HHS Probe of Health Insurers' Reduced Medical Care Spending, Even As Premiums Spike
/PRNewswire/ -- Consumer Watchdog and the Center for Media and Democracy today asked the Obama administration to investigate how the major for-profit health insurance companies are reducing their proportion of spending on health care in advance of health reform, even as premiums spike upward. In a letter to Health and Human Services chief Kathleen Sebelius, the groups compared insurers' actions to those of credit card companies, which spiked annual interest rates last year in advance of new federal regulations that would curb corporate abuses.
"Insurance companies appear to be making sure that when new federal rules for spending on health care kick in next year, they can keep their administrative bloat and profits intact," said Judy Dugan, research director of Consumer Watchdog.
The groups noted in the letter that insurance companies are lobbying intensely to distort new rules meant to require increased medical spending -- 80% of premium dollars for individual and small group policies and 85% for large group policies. The insurers seek to redefine billions of dollars in overhead and administration expenses as health care. By cutting their medical ratio now, they can make room for the redefined overhead expenses next year and meet but not exceed the 80% to 85% minimums.
Co-signer Wendell Potter of the Center for Media and Democracy said that red flags went up when Cigna, the last major insurer to report 2nd quarter results, showed a startling 6.4% drop in its medical spending ratio (also called medical loss ratio, or MLR) to 78.8%, a cut that appears unprecedented for a large insurer.
Read the full letter at http://www.consumerwatchdog.org/resources/sebeliusletterCWDCMD081110.pdf
The letter said:
"We write jointly as advocates for consumer rights and transparency to urge you to examine health insurers' reports of reductions in their proportion of medical spending in recent quarters, even as premiums have risen substantially in advance of the new health reform law. The major insurance companies' behavior looks suspiciously like that of credit card companies, which spiked annual interest rates in advance of consumer protection laws intended to restrict the conditions under which rates could go up.
"Like the credit card companies, health insurers assume that they can get away with what amounts to bilking their customers now to set up higher profits in the future. The health insurers appear to be cutting the proportion of premium dollars spent on medical care, in the case of CIGNA by likely record proportions, in advance of regulations intended to make them spend a higher proportion on care, and less on administrative bloat.
"Unlike with credit card companies, you have the power to curb their gaming of the system. The regulations that you put in place to enforce the new health law requirement that they spend 80% to 85% of customers' premium on health care will decide whether the companies cater to Wall Street or to their patients.
"The outcome of the regulations that are now being written will depend on your resistance to a massive lobbying effort by the insurance industry.
"As you know, insurers already expect that changes in the [medical loss ratio] calculation specified in the Patient Protection and Affordable Care Act will allow more insurer activities to be defined as 'health quality improvements' and counted as health care. At least some and possibly all of their state and federal taxes will also be deducted from premium revenue. The combined effect, depending on vagueness or laxness in final regulations, could amount to a 5% or larger insurer 'bonus' in calculating the MLR.
"See Consumer Watchdog comment on tax deduction regulation at http://www.naic.org/committees_lhatf_ahwg.htm
"The result of this bonus is that it pays for an insurer to suppress MLR as much as possible now, to keep future MLR at -- but not above -- 80% for individual and small business policies, and 85% for large groups. It is not possible for the public to accurately determine how the company's drastic reduction in MLR -- which increases its value to Wall Street--was accomplished.
"The Center for Media and Democracy and Consumer Watchdog ask that HHS demand much more detail about the nature of the MLR reductions from CIGNA and lesser reductions by other insurers, and make the results public. The examination should seek to determine if financial coercion of employers and individuals (through unaffordable and unjustifiable spikes in the rates of less profitable plans, or the targeted closure of some plans) was part of any shift to higher-deductible and lower benefit plans.
"HHS should also seek to tighten new definitions of what can be included in the medical loss ratio. The National Association of Insurance Commissioners, which is finalizing proposed regulations to decide how medical loss ratios are defined, is being lobbied by insurers and their lawyers with an intensity that makes the lobbying of Congress pale by comparison. As the proposed regulations are being finalized, they risk being further weakened. It will be up to HHS to right the balance.
"Presumably the MLR reductions at CIGNA and other companies involved what insurers call 'aggressive medical management' to reduce the amount of care provided enrollees. However, it likely also involved the movement of more enrollees into plans that require greater cost sharing and provide less care, through marketing or price coercion."
Insurers and their lobbyists count on the technical detail of financial reports and regulatory actions to mask their intent, said Consumer Watchdog and the Center for Media and Democracy.
Consumers don't notice until their premiums shoot through the roof and their health benefit are reduced. Regulators must resist corporate lobbies and act to protect ordinary citizens, the groups said.
Consumer Watchdog and the Center for Media and Democracy are nonprofit, nonpartisan consumer advocates. For more information, see www.consumerwatchdog.org and www.prwatch.org
-----
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"Insurance companies appear to be making sure that when new federal rules for spending on health care kick in next year, they can keep their administrative bloat and profits intact," said Judy Dugan, research director of Consumer Watchdog.
The groups noted in the letter that insurance companies are lobbying intensely to distort new rules meant to require increased medical spending -- 80% of premium dollars for individual and small group policies and 85% for large group policies. The insurers seek to redefine billions of dollars in overhead and administration expenses as health care. By cutting their medical ratio now, they can make room for the redefined overhead expenses next year and meet but not exceed the 80% to 85% minimums.
Co-signer Wendell Potter of the Center for Media and Democracy said that red flags went up when Cigna, the last major insurer to report 2nd quarter results, showed a startling 6.4% drop in its medical spending ratio (also called medical loss ratio, or MLR) to 78.8%, a cut that appears unprecedented for a large insurer.
Read the full letter at http://www.consumerwatchdog.org/resources/sebeliusletterCWDCMD081110.pdf
The letter said:
"We write jointly as advocates for consumer rights and transparency to urge you to examine health insurers' reports of reductions in their proportion of medical spending in recent quarters, even as premiums have risen substantially in advance of the new health reform law. The major insurance companies' behavior looks suspiciously like that of credit card companies, which spiked annual interest rates in advance of consumer protection laws intended to restrict the conditions under which rates could go up.
"Like the credit card companies, health insurers assume that they can get away with what amounts to bilking their customers now to set up higher profits in the future. The health insurers appear to be cutting the proportion of premium dollars spent on medical care, in the case of CIGNA by likely record proportions, in advance of regulations intended to make them spend a higher proportion on care, and less on administrative bloat.
"Unlike with credit card companies, you have the power to curb their gaming of the system. The regulations that you put in place to enforce the new health law requirement that they spend 80% to 85% of customers' premium on health care will decide whether the companies cater to Wall Street or to their patients.
"The outcome of the regulations that are now being written will depend on your resistance to a massive lobbying effort by the insurance industry.
"As you know, insurers already expect that changes in the [medical loss ratio] calculation specified in the Patient Protection and Affordable Care Act will allow more insurer activities to be defined as 'health quality improvements' and counted as health care. At least some and possibly all of their state and federal taxes will also be deducted from premium revenue. The combined effect, depending on vagueness or laxness in final regulations, could amount to a 5% or larger insurer 'bonus' in calculating the MLR.
"See Consumer Watchdog comment on tax deduction regulation at http://www.naic.org/committees_lhatf_ahwg.htm
"The result of this bonus is that it pays for an insurer to suppress MLR as much as possible now, to keep future MLR at -- but not above -- 80% for individual and small business policies, and 85% for large groups. It is not possible for the public to accurately determine how the company's drastic reduction in MLR -- which increases its value to Wall Street--was accomplished.
"The Center for Media and Democracy and Consumer Watchdog ask that HHS demand much more detail about the nature of the MLR reductions from CIGNA and lesser reductions by other insurers, and make the results public. The examination should seek to determine if financial coercion of employers and individuals (through unaffordable and unjustifiable spikes in the rates of less profitable plans, or the targeted closure of some plans) was part of any shift to higher-deductible and lower benefit plans.
"HHS should also seek to tighten new definitions of what can be included in the medical loss ratio. The National Association of Insurance Commissioners, which is finalizing proposed regulations to decide how medical loss ratios are defined, is being lobbied by insurers and their lawyers with an intensity that makes the lobbying of Congress pale by comparison. As the proposed regulations are being finalized, they risk being further weakened. It will be up to HHS to right the balance.
"Presumably the MLR reductions at CIGNA and other companies involved what insurers call 'aggressive medical management' to reduce the amount of care provided enrollees. However, it likely also involved the movement of more enrollees into plans that require greater cost sharing and provide less care, through marketing or price coercion."
Insurers and their lobbyists count on the technical detail of financial reports and regulatory actions to mask their intent, said Consumer Watchdog and the Center for Media and Democracy.
Consumers don't notice until their premiums shoot through the roof and their health benefit are reduced. Regulators must resist corporate lobbies and act to protect ordinary citizens, the groups said.
Consumer Watchdog and the Center for Media and Democracy are nonprofit, nonpartisan consumer advocates. For more information, see www.consumerwatchdog.org and www.prwatch.org
-----
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Tuesday, June 15, 2010
U.S. Departments of Health and Human Services, Labor, and Treasury Issue Regulation on "Grandfathered" Health Plans under the Affordable Care Act
Allowing Americans to Keep Current Health Plans or Choose a New Plan While Extending Important New Benefits to All Consumers
The U.S. Departments of Health and Human Services, Labor and Treasury today issued a new regulation that makes good on President Obama's promise that Americans who like their health plan can keep it.
The new regulation protects the ability of individuals and businesses to keep their current plan while providing important consumer protections that give Americans - rather than insurance companies - control over their own health care. The new regulation also provides stability and flexibility to insurers and businesses that offer health insurance coverage as the nation transitions to a more competitive marketplace in 2014 when businesses and consumers will have more affordable choices through exchanges.
"The Affordable Care Act gives American families more control over their health care by providing greater benefits, cost savings and protections," said Secretary of Health and Human Services Kathleen Sebelius. "Today, with the announcement of the new 'grandfather' rule, we're providing the market stability and flexibility to ensure that families and businesses can make the choices that work best for them."
While the Affordable Care Act requires all health plans to provide important new benefits to consumers, under the law, plans that existed on March 23, 2010 are exempt from some new requirements. The "grandfather rule" issued today makes it clear that these plans can continue to innovate and contain costs by allowing insurers and employers to make routine changes without losing grandfather status. Plans will lose their "grandfather" status if they choose to significantly cut benefits or increase out-of-pocket spending for consumers - and consumers in plans that make such changes will gain new consumer protections.
"The rule we are announcing today will allow employers to make routine and modest adjustments to co-payments, deductibles and employer contributions to their employees' premiums without forfeiting grandfather status. This flexibility will encourage employers to continue offering health coverage to their employees and help to ensure coverage for all Americans," said Secretary of Labor Hilda Solis.
All health plans - whether or not they are grandfathered plans - must provide certain benefits to their customers for plan years starting on or after September 23, 2010 including:
* No lifetime limits on coverage for all plans;
* No rescissions of coverage when people get sick and have previously made an unintentional mistake on their application; and
* Extension of parents' coverage to young adults under 26 years old;
For the vast majority of Americans who get their health insurance through employers, additional benefits will be offered, irrespective of whether their plan is grandfathered, including:
* No coverage exclusions for children with pre-existing conditions; and
* No "restricted" annual limits (e.g., annual dollar-amount limits on coverage below standards to be set in future regulations).
"The Affordable Care Act positions consumers, instead of insurance companies, as decision makers when it comes to their health care," said Assistant Treasury Secretary for Tax Policy Michael Mundaca. "The rule we're announcing today preserves individuals' ability to keep their current plan and provides strong consumer protections that give Americans more control over their health insurance choices."
Grandfathered health plans will be able to make routine changes to their policies and maintain their status. These routine changes include cost adjustments to keep pace with medical inflation, adding new benefits, making modest adjustments to existing benefits, voluntarily adopting new consumer protections under the new law, or making changes to comply with State or other Federal laws. Premium changes are not taken into account when determining whether or not a plan is grandfathered.
Plans will lose their grandfathered status if they choose to make significant changes that reduce benefits or increase costs to consumers. If a plan loses its grandfathered status, then consumers in these plans will gain additional new benefits including:
* Coverage of recommended prevention services with no cost sharing; and
* Patient protections such as access to OB-GYNs and pediatricians without a referral by a separate primary care provider.
Details about what routine changes insurers and employers can make without losing their grandfathered status, and the projected impact on large and small employer plans and the individual plan market can be found at http://www.healthreform.gov/newsroom/keeping_the_health_plan_you_have.html.
Most of the 133 million Americans with employer-sponsored health insurance through large employers will maintain the coverage they have today. Additionally, large employer-based plans already offer most of the comprehensive benefits and consumer protections that the Affordable Care Act will provide to all Americans this year - such as preventing rescission of coverage.
The roughly 42 million people insured through small businesses will likely transition from their current plan to one with the new Affordable Care Act protections over the next few years. Small plans tend to make substantial changes to cost sharing, employer contributions, and health insurance issuers more frequently than large plans. To help small businesses afford employee coverage, the Affordable Care Act includes a tax credit for up to 35% of their premium contributions.
The 17 million people who are covered in the individual health insurance market, where switching of plans and substantial changes in coverage are common, will receive the new protections of the Affordable Care Act sooner rather than later. Roughly 40 percent to two-thirds of people in individual market policies normally change plans within a year. In the short run, individuals whose plan changes and is no longer grandfathered will gain access to free preventive services, protections against restricted annual limits, and patient protections such as improved access to emergency rooms.
In 2014, small businesses and individuals who purchase insurance on their own will gain access to the competitive market Exchanges. These Exchanges will offer individuals and workers in small businesses with a much greater choice of plans at more affordable rates - the same choice as members of Congress. In fact, the Congressional Budget Office (CBO) has estimated that, on an apples-to-apples basis, premiums will be 14- 20 percent lower than they would be under current law in 2016 due to competition, lower insurance overhead, and increased pooling and purchasing power. Small businesses also will have more affordable options. CBO has estimated that a family policy for small businesses would be available in the Exchanges at a premium that is $4,000 lower than under current law in 2016.
These reduced premiums do not take into account the tax credits available to small businesses and middle class families to help make insurance affordable. These additional new choices and cost savings may further lower the likelihood that small businesses workers will remain in grandfathered health plans. Consumers insured through large employers are more likely to remain in grandfathered plans in 2014 and beyond.
-----
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The U.S. Departments of Health and Human Services, Labor and Treasury today issued a new regulation that makes good on President Obama's promise that Americans who like their health plan can keep it.
The new regulation protects the ability of individuals and businesses to keep their current plan while providing important consumer protections that give Americans - rather than insurance companies - control over their own health care. The new regulation also provides stability and flexibility to insurers and businesses that offer health insurance coverage as the nation transitions to a more competitive marketplace in 2014 when businesses and consumers will have more affordable choices through exchanges.
"The Affordable Care Act gives American families more control over their health care by providing greater benefits, cost savings and protections," said Secretary of Health and Human Services Kathleen Sebelius. "Today, with the announcement of the new 'grandfather' rule, we're providing the market stability and flexibility to ensure that families and businesses can make the choices that work best for them."
While the Affordable Care Act requires all health plans to provide important new benefits to consumers, under the law, plans that existed on March 23, 2010 are exempt from some new requirements. The "grandfather rule" issued today makes it clear that these plans can continue to innovate and contain costs by allowing insurers and employers to make routine changes without losing grandfather status. Plans will lose their "grandfather" status if they choose to significantly cut benefits or increase out-of-pocket spending for consumers - and consumers in plans that make such changes will gain new consumer protections.
"The rule we are announcing today will allow employers to make routine and modest adjustments to co-payments, deductibles and employer contributions to their employees' premiums without forfeiting grandfather status. This flexibility will encourage employers to continue offering health coverage to their employees and help to ensure coverage for all Americans," said Secretary of Labor Hilda Solis.
All health plans - whether or not they are grandfathered plans - must provide certain benefits to their customers for plan years starting on or after September 23, 2010 including:
* No lifetime limits on coverage for all plans;
* No rescissions of coverage when people get sick and have previously made an unintentional mistake on their application; and
* Extension of parents' coverage to young adults under 26 years old;
For the vast majority of Americans who get their health insurance through employers, additional benefits will be offered, irrespective of whether their plan is grandfathered, including:
* No coverage exclusions for children with pre-existing conditions; and
* No "restricted" annual limits (e.g., annual dollar-amount limits on coverage below standards to be set in future regulations).
"The Affordable Care Act positions consumers, instead of insurance companies, as decision makers when it comes to their health care," said Assistant Treasury Secretary for Tax Policy Michael Mundaca. "The rule we're announcing today preserves individuals' ability to keep their current plan and provides strong consumer protections that give Americans more control over their health insurance choices."
Grandfathered health plans will be able to make routine changes to their policies and maintain their status. These routine changes include cost adjustments to keep pace with medical inflation, adding new benefits, making modest adjustments to existing benefits, voluntarily adopting new consumer protections under the new law, or making changes to comply with State or other Federal laws. Premium changes are not taken into account when determining whether or not a plan is grandfathered.
Plans will lose their grandfathered status if they choose to make significant changes that reduce benefits or increase costs to consumers. If a plan loses its grandfathered status, then consumers in these plans will gain additional new benefits including:
* Coverage of recommended prevention services with no cost sharing; and
* Patient protections such as access to OB-GYNs and pediatricians without a referral by a separate primary care provider.
Details about what routine changes insurers and employers can make without losing their grandfathered status, and the projected impact on large and small employer plans and the individual plan market can be found at http://www.healthreform.gov/newsroom/keeping_the_health_plan_you_have.html.
Most of the 133 million Americans with employer-sponsored health insurance through large employers will maintain the coverage they have today. Additionally, large employer-based plans already offer most of the comprehensive benefits and consumer protections that the Affordable Care Act will provide to all Americans this year - such as preventing rescission of coverage.
The roughly 42 million people insured through small businesses will likely transition from their current plan to one with the new Affordable Care Act protections over the next few years. Small plans tend to make substantial changes to cost sharing, employer contributions, and health insurance issuers more frequently than large plans. To help small businesses afford employee coverage, the Affordable Care Act includes a tax credit for up to 35% of their premium contributions.
The 17 million people who are covered in the individual health insurance market, where switching of plans and substantial changes in coverage are common, will receive the new protections of the Affordable Care Act sooner rather than later. Roughly 40 percent to two-thirds of people in individual market policies normally change plans within a year. In the short run, individuals whose plan changes and is no longer grandfathered will gain access to free preventive services, protections against restricted annual limits, and patient protections such as improved access to emergency rooms.
In 2014, small businesses and individuals who purchase insurance on their own will gain access to the competitive market Exchanges. These Exchanges will offer individuals and workers in small businesses with a much greater choice of plans at more affordable rates - the same choice as members of Congress. In fact, the Congressional Budget Office (CBO) has estimated that, on an apples-to-apples basis, premiums will be 14- 20 percent lower than they would be under current law in 2016 due to competition, lower insurance overhead, and increased pooling and purchasing power. Small businesses also will have more affordable options. CBO has estimated that a family policy for small businesses would be available in the Exchanges at a premium that is $4,000 lower than under current law in 2016.
These reduced premiums do not take into account the tax credits available to small businesses and middle class families to help make insurance affordable. These additional new choices and cost savings may further lower the likelihood that small businesses workers will remain in grandfathered health plans. Consumers insured through large employers are more likely to remain in grandfathered plans in 2014 and beyond.
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Tuesday, June 08, 2010
Secretary Sebelius Announces $51 Million in Affordable Care Act Grants to Innovate, Improve and Enhance Health Insurance Premium Rate Review
New grant program providing $250 million to states over next five years will strengthen oversight of insurance premiums and rate hikes
HHS Secretary Kathleen Sebelius today (June 7) announced the availability of $51 million in Health Insurance Premium Review Grants through the Affordable Care Act. These funds are the first round of grants available to states through a new $250 million grant program to create and strengthen insurance rate review processes.
"This is an important step in putting consumers back in control of their health care," said Secretary Sebelius. "These new grants will help states protect consumers and small employers by holding insurers accountable for unreasonable insurance rate increases that have made coverage unaffordable for many American families. By strengthening oversight of insurance premiums, these grants will help put affordable coverage back within the reach for Americans who have been hit hard by skyrocketing costs."
All states and the District of Columbia are eligible for this first round of rate review grants. To receive a grant, a state must submit a plan for how it will use grant funds to develop or enhance its process of reviewing and approving, disapproving, or modifying health insurance premium requests. States with successful applications will receive a $1 million grant during the first round.
"These funds will help states strengthen their oversight capabilities and will allow states that do not currently review rates to establish a program," said Jay Angoff, Director of the Office of Consumer Information and Insurance Oversight. "By subjecting rates to new public scrutiny, the oversight of premium increases will ultimately help ensure that consumers receive substantial value for their insurance dollars."
In early May, Secretary Sebelius sent a letter to Governors and State Insurance Commissioners urging them to review the authority they have under their state laws to determine whether they have all of the regulatory tools needed to approve health insurance rates before they take effect.
Several provisions in the Affordable Care Act strengthen HHS' and states' oversight of insurance premiums and rate hikes. These include the Medical Loss Ratio, requiring insurers in the individual and small group markets to spend at least 80 percent of the premium dollar on health care, and insurers in the large group market to spend at least 85 percent of the premium dollar on health care; rate review, requiring insurers to justify unreasonable premium increases to state regulators and the Secretary of Health and Human Services; and grant funds for states to help create or strengthen reporting and review processes.
The Health Insurance Premium Review Grants that will be available during FY 2010 are only the first in a five-year grant program. HHS will take applications for a second round of state grants beginning in Fiscal Year 2011, after new regulations regarding rate review take effect. Second-round grants will allow states to further strengthen their rate review, and begin to provide the Secretary of HHS with the rate data required under the law.
This grant solicitation can be found at grants.gov.
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HHS Secretary Kathleen Sebelius today (June 7) announced the availability of $51 million in Health Insurance Premium Review Grants through the Affordable Care Act. These funds are the first round of grants available to states through a new $250 million grant program to create and strengthen insurance rate review processes.
"This is an important step in putting consumers back in control of their health care," said Secretary Sebelius. "These new grants will help states protect consumers and small employers by holding insurers accountable for unreasonable insurance rate increases that have made coverage unaffordable for many American families. By strengthening oversight of insurance premiums, these grants will help put affordable coverage back within the reach for Americans who have been hit hard by skyrocketing costs."
All states and the District of Columbia are eligible for this first round of rate review grants. To receive a grant, a state must submit a plan for how it will use grant funds to develop or enhance its process of reviewing and approving, disapproving, or modifying health insurance premium requests. States with successful applications will receive a $1 million grant during the first round.
"These funds will help states strengthen their oversight capabilities and will allow states that do not currently review rates to establish a program," said Jay Angoff, Director of the Office of Consumer Information and Insurance Oversight. "By subjecting rates to new public scrutiny, the oversight of premium increases will ultimately help ensure that consumers receive substantial value for their insurance dollars."
In early May, Secretary Sebelius sent a letter to Governors and State Insurance Commissioners urging them to review the authority they have under their state laws to determine whether they have all of the regulatory tools needed to approve health insurance rates before they take effect.
Several provisions in the Affordable Care Act strengthen HHS' and states' oversight of insurance premiums and rate hikes. These include the Medical Loss Ratio, requiring insurers in the individual and small group markets to spend at least 80 percent of the premium dollar on health care, and insurers in the large group market to spend at least 85 percent of the premium dollar on health care; rate review, requiring insurers to justify unreasonable premium increases to state regulators and the Secretary of Health and Human Services; and grant funds for states to help create or strengthen reporting and review processes.
The Health Insurance Premium Review Grants that will be available during FY 2010 are only the first in a five-year grant program. HHS will take applications for a second round of state grants beginning in Fiscal Year 2011, after new regulations regarding rate review take effect. Second-round grants will allow states to further strengthen their rate review, and begin to provide the Secretary of HHS with the rate data required under the law.
This grant solicitation can be found at grants.gov.
-----
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Sunday, December 20, 2009
AHIP Statement On Senate Health Care Reform Legislation
/PRNewswire/ -- Karen Ignagni, President and CEO of America's Health Insurance Plans (AHIP), released the following statement today on the Senate health care reform legislation:
"The debate before us today is not whether insurance market reforms are needed. In fact, health plans proposed and support a complete overhaul of insurance market rules and new consumer protections to ensure all Americans have guaranteed access to affordable, portable coverage. The critical policy questions are whether the current legislation can bend the cost curve and result in a sustainable system. While the bill makes important improvements in access and takes steps towards cost-containment, it lacks accountability to ensure that costs are brought under control. Moreover, this bill includes provisions that will increase costs for families and small businesses and disrupt the quality coverage on which millions of Americans rely today."
Barriers to affordability:
-- A new $70 billion premium tax that will increase the cost of health
care coverage for millions of Americans and fall primarily on small
businesses and those who purchase coverage in the individual market.
-- More cost shifting to patients with private coverage as providers are
forced to make up for hundreds of billions in reduced Medicare
payments.
-- New market and rating rules that will increase premiums for
individuals and small businesses with coverage today.
Disruptions for current policyholders:
-- New regulatory requirements and benefit mandates that go into effect
beginning next year - before access provisions go into effect - that
will cause major disruption for millions who have already enrolled in
their plan for next year.
-- A new federal plan that would preclude many high-quality plans from
participating and increase complexity in the exchanges.
-- Arbitrary caps on administrative costs that will undermine essential
health care services, such as disease management and care coordination
programs, investments in health information technology, programs to
root out fraud and abuse in the health care system, and new
administrative simplification requirements.
-- Major cuts in Medicare Advantage benefits beginning next year that
will ultimately result in millions of seniors losing their current
coverage.
"These issues need to be resolved if the country is to make health care coverage more affordable and put the system on a sustainable path. Health plans will continue to work to solve the problems that have been identified."
-----
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"The debate before us today is not whether insurance market reforms are needed. In fact, health plans proposed and support a complete overhaul of insurance market rules and new consumer protections to ensure all Americans have guaranteed access to affordable, portable coverage. The critical policy questions are whether the current legislation can bend the cost curve and result in a sustainable system. While the bill makes important improvements in access and takes steps towards cost-containment, it lacks accountability to ensure that costs are brought under control. Moreover, this bill includes provisions that will increase costs for families and small businesses and disrupt the quality coverage on which millions of Americans rely today."
Barriers to affordability:
-- A new $70 billion premium tax that will increase the cost of health
care coverage for millions of Americans and fall primarily on small
businesses and those who purchase coverage in the individual market.
-- More cost shifting to patients with private coverage as providers are
forced to make up for hundreds of billions in reduced Medicare
payments.
-- New market and rating rules that will increase premiums for
individuals and small businesses with coverage today.
Disruptions for current policyholders:
-- New regulatory requirements and benefit mandates that go into effect
beginning next year - before access provisions go into effect - that
will cause major disruption for millions who have already enrolled in
their plan for next year.
-- A new federal plan that would preclude many high-quality plans from
participating and increase complexity in the exchanges.
-- Arbitrary caps on administrative costs that will undermine essential
health care services, such as disease management and care coordination
programs, investments in health information technology, programs to
root out fraud and abuse in the health care system, and new
administrative simplification requirements.
-- Major cuts in Medicare Advantage benefits beginning next year that
will ultimately result in millions of seniors losing their current
coverage.
"These issues need to be resolved if the country is to make health care coverage more affordable and put the system on a sustainable path. Health plans will continue to work to solve the problems that have been identified."
-----
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Thursday, December 03, 2009
Sebelius Statement on Benefits of Health Insurance Reform for Businesses
HHS Secretary Kathleen Sebelius today highlighted the benefits of health insurance reform for businesses and released a new fact sheet regarding a recent analysis from the Congressional Budget Office.
"Businesses across the country are struggling under the weight of high health care costs," Secretary Sebelius said. "Health insurance reform will help lift this burden, help businesses prosper, and ensure workers have the affordable, quality health care they need."
A fact sheet regarding the analysis is included below.
Fact Sheet: New CBO Analysis Confirms Benefits of Health Insurance Reform for Businesses
American businesses know the health care status quo is unacceptable. Since 2000, premiums have more than doubled, a rate three times faster than the growth in wages. Between 2000 and 2009, the percentage of firms offering coverage fell from 69 to 60, with much of that drop occurring in the past year alone. Small businesses in particular struggle under the current health care system. For firms employing less than 10 workers, the erosion in coverage is striking -- from 57 percent offering coverage in 2000 to 46 percent offering coverage in 2009. If we do nothing, over the next ten years, health care costs for large businesses are projected to reach $28,530 per employee, a 116 percent increase from 2009.
A new analysis by the Congressional Budget Office (CBO) affirms that businesses' health insurance costs will be lower under health insurance reform -- even though the analysis does not take into account the full range of policies that will benefit businesses.
Health Insurance Premiums for Businesses According to CBO. In a November 30 letter to Senator Evan Bayh, CBO assesses the impact of the Patient Protection and Affordability Act on premiums for the individual, small-group, and large group markets. In 2016, CBO estimates that 159 million or 83 percent of privately insured people will be insured through employers.
Premiums for small business will go down. Small businesses are likely to see premiums drop by 1 to 4 percent under the proposal due to lower prices. These lower prices come from:
-- Lower administrative overhead. Right now, each small business
has to consult with a broker or hire someone to collate plan
information, assist employees with decisions, and handle issues as they
arise. Under reform, in the exchange, there will be people whose job it
is to provide plan information and facilitate enrollment. The exchange
centralizes what is otherwise a process that is extremely duplicative,
streamlining administrative costs and lowering premiums.
-- Greater competition. CBO attributes savings to "providing a
centralized marketplace in which consumers could compare the premiums of
relatively standardized insurance products." This includes competitive
pressure from a public health insurance option.
-- Administrative simplification. Physicians spend on average about
140 hours and $68,000 a year just dealing with health insurance
bureaucracy. By simplifying and standardizing paperwork and
computerizing medical records, doctors will be able to focus on caring
for their patients instead of dealing with bureaucracy. CBO estimates
nearly $20 billion in Federal savings over 10 years, with additional
savings accruing to businesses and families.
Up to 3 percent premium savings as the risk pool for employer-based coverage improves. Today, businesses have seen their premiums skyrocket every year, with many facing double digit percentage increases in their premiums. Health insurance reform will stop this trend.
With nearly 30 million additional Americans gaining health insurance, the purchasing pool for businesses will expand and, largely, improve. Big businesses will save from 0 to 3 percent on premiums due to the changing risk pool while small businesses could save 1 percent on
premiums.
Better options for small businesses. Small businesses would gain access to the health insurance exchanges and new benefit options and tax credits under reform.
-- 3.6 million small businesses could qualify for a tax credit to
help pay their premiums.[vii] An estimated 12 percent of people insured
through small businesses will qualify for tax credits that lower
premiums by 8 to 11 percent. This translates into $620 to $860 for
individuals and $1,540 to $2,120 for families assuming that the coverage
is comparable to what they get today.
-- Today, small businesses often have coverage that has high
deductibles and gap-ridden benefits. The legislation offers such
businesses better options that CBO assumes businesses will take. Such
better coverage has premiums that are 0 to 3 percent higher than the
average plans today, but will save money for employees by ensuring they
are not forced to pay high out-of-pocket costs for services not covered
by their current insurance.
-- In the current health insurance system, small businesses may see
premiums skyrocket if just one or two workers fall ill and accumulate
high medical costs. Health insurance reform will prevent insurance
discrimination based on health status, meaning that small businesses
will no longer be unfairly penalized if a worker falls ill.
9 to 12 percent premium savings for high-premium plans under current law. By assessing high-cost plans, the excise tax encourages businesses and individuals to streamline coverage, leading to lower premiums over time.
-- CBO estimates that the 19 percent of people in employer-coverage
in high-cost plans today will pay 9 to 12 percent less under reform.
This translates to premium savings of at least $835 for single and
$2,070 family policies.
-- This could yield increases in workers wages, by around $70
billion in 2019.
Nearly $10 billion in savings for small businesses.
-- Under current law, CBO estimates premiums to be $7,800 for
single policies and $19,300 for families in the small group market.
-- Small businesses that opt for comparable coverage under reform
could save up to $390 for single policies and $965 for family policies.
Assuming all 25 million people insured through small business save at
least $390 (more for families), this will yield nearly $10 billion in
savings in 2016 alone.
-- Additional savings will accrue to low-wage, small businesses
that newly offer coverage in the exchange. CBO estimates that roughly
12 percent of people in the small group market would get the credit
which would reduce premiums by about 10 percent in 2016. Multiplying
this by the population and average premiums in the report, this suggests
that about one and a half million people would save roughly $780 per
person on premiums in 2016.
-- Even those that CBO estimates will "buy-up" will save, paying
$100 less per family for coverage that is more protective.
At least $13.4 billion in savings for large businesses.
-- Under current law, CBO estimates premiums to be $7,400 for
single policies and $20,300 for families in the large group market.
-- CBO estimates that, under reform, large business premiums will
drop by $100 per single policy and $200 per family policy. With 134
million people enrolled in such coverage, this translates into at least
$13.4 billion in savings in 2016 alone.
Businesses can keep what they have.
-- CBO affirms that any proposed benefit mandates would not affect
the small or large group markets: "The requirement would have relatively
little effect on premiums in the small group market, however, because
most policies sold in that market already cover those services and would
continue to cover them under current law."
-- CBO also affirms the effectiveness of the grandfather policy:
"Further, small group policies that are maintained continuously would be
grandfathered under the proposal."
-- In the large group market, CBO affirms that "[Benefit]
requirements would have no significant effect on premiums in the large
group market."
No cost-shifting to the employer-based insurance market.
-- CBO states: "... CBO's assessment is that the legislation would
have minimal effects on private-sector premiums via cost shifting."
Additional Policies To Benefit Businesses. CBO does not include in its analysis several additional policies in the Patient Protection and Affordable Care Act that would benefit businesses.
Reinsurance for businesses that cover early retiree plans.
-- The proportion of employers that offer retiree coverage has been
declining precipitously over time, from 66 percent in 1988 to 29 percent
in 2009.
-- The proposal would provide a time-limited, Federal reinsurance
program to cover some of the cost of covering early retirees. This
translates to savings of up to $1,200 off the premium of every family
plan offered by that company.
Policies to slow health care cost growth.
-- Insurance oversight: In recent years, several states' insurance
commissioners have rejected unjustifiably high premium increases in the
small group and individual insurance markets. Health insurance reform
will allow insurance commissioners to continue to play this important
role and require transparency and oversight of premium increases.
-- Delivery system reform. Health insurance reform will invest in
care innovations such as accountable care organizations, make healthcare
providers more accountable and efficient through value-based purchasing,
and improve quality and patient safety, including reducing preventable
readmissions. A recent report by the Business Roundtable found that if
many of the delivery system reforms were adopted by the private sector,
large businesses could save $3,000 per employee by 2019.
-- Lowers expensive drug costs. Biologic drugs are some of the most
expensive drugs on the market, and yet there is no streamlined avenue to
get generics on the market to provide lower-cost alternatives. Reform
will create an expedited process to make generic biologic drugs
available, significantly lowering drug costs.
Immediate benefits. While the CBO report provides savings estimates for 2016, several of the policies discussed above would take effect immediately, including early retiree reinsurance, administrative simplification, small business tax credits, and increased oversight of the insurance industry.
Benefits to Businesses Beyond Lower Costs. CBO focused exclusively on health insurance premiums which are critical to businesses. There would be other benefits of health reform for businesses as well.
Improved workplace productivity.
-- The Institute of Medicine found that lost productivity due to
untreated illness among uninsured workers cost businesses between $75
billion and $150 billion per year. Expanding coverage to the uninsured
will create a more productive workforce.
-- Current job-lock (inability to leave current employment if it
will result in loss of health insurance) has been demonstrated to hurt
the economy through reduced productivity, and prevents an employee from
taking a job with potentially higher wages. By ending limitations on
coverage based on pre-existing conditions and expanding portable
coverage options through the health insurance exchange, reform will
increase the flexibility and productivity of the workforce.
New jobs.
-- Bringing down the cost of healthcare will enable investments in
business and job creation. The President's Council of Economic Advisers
(CEA) estimated that if the annual growth rate of health spending slows
by 1.5 percentage point, new jobs could rise by 500,000.
-- The health insurance exchange will expand options for coverage,
making small businesses a more attractive place for people to work, and
encouraging people to start up businesses of their own.
-- Health insurance reform could save 80,000 jobs in the small
business sector by 2019 and increase take-home pay by almost $30
billion.
-----
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"Businesses across the country are struggling under the weight of high health care costs," Secretary Sebelius said. "Health insurance reform will help lift this burden, help businesses prosper, and ensure workers have the affordable, quality health care they need."
A fact sheet regarding the analysis is included below.
Fact Sheet: New CBO Analysis Confirms Benefits of Health Insurance Reform for Businesses
American businesses know the health care status quo is unacceptable. Since 2000, premiums have more than doubled, a rate three times faster than the growth in wages. Between 2000 and 2009, the percentage of firms offering coverage fell from 69 to 60, with much of that drop occurring in the past year alone. Small businesses in particular struggle under the current health care system. For firms employing less than 10 workers, the erosion in coverage is striking -- from 57 percent offering coverage in 2000 to 46 percent offering coverage in 2009. If we do nothing, over the next ten years, health care costs for large businesses are projected to reach $28,530 per employee, a 116 percent increase from 2009.
A new analysis by the Congressional Budget Office (CBO) affirms that businesses' health insurance costs will be lower under health insurance reform -- even though the analysis does not take into account the full range of policies that will benefit businesses.
Health Insurance Premiums for Businesses According to CBO. In a November 30 letter to Senator Evan Bayh, CBO assesses the impact of the Patient Protection and Affordability Act on premiums for the individual, small-group, and large group markets. In 2016, CBO estimates that 159 million or 83 percent of privately insured people will be insured through employers.
Premiums for small business will go down. Small businesses are likely to see premiums drop by 1 to 4 percent under the proposal due to lower prices. These lower prices come from:
-- Lower administrative overhead. Right now, each small business
has to consult with a broker or hire someone to collate plan
information, assist employees with decisions, and handle issues as they
arise. Under reform, in the exchange, there will be people whose job it
is to provide plan information and facilitate enrollment. The exchange
centralizes what is otherwise a process that is extremely duplicative,
streamlining administrative costs and lowering premiums.
-- Greater competition. CBO attributes savings to "providing a
centralized marketplace in which consumers could compare the premiums of
relatively standardized insurance products." This includes competitive
pressure from a public health insurance option.
-- Administrative simplification. Physicians spend on average about
140 hours and $68,000 a year just dealing with health insurance
bureaucracy. By simplifying and standardizing paperwork and
computerizing medical records, doctors will be able to focus on caring
for their patients instead of dealing with bureaucracy. CBO estimates
nearly $20 billion in Federal savings over 10 years, with additional
savings accruing to businesses and families.
Up to 3 percent premium savings as the risk pool for employer-based coverage improves. Today, businesses have seen their premiums skyrocket every year, with many facing double digit percentage increases in their premiums. Health insurance reform will stop this trend.
With nearly 30 million additional Americans gaining health insurance, the purchasing pool for businesses will expand and, largely, improve. Big businesses will save from 0 to 3 percent on premiums due to the changing risk pool while small businesses could save 1 percent on
premiums.
Better options for small businesses. Small businesses would gain access to the health insurance exchanges and new benefit options and tax credits under reform.
-- 3.6 million small businesses could qualify for a tax credit to
help pay their premiums.[vii] An estimated 12 percent of people insured
through small businesses will qualify for tax credits that lower
premiums by 8 to 11 percent. This translates into $620 to $860 for
individuals and $1,540 to $2,120 for families assuming that the coverage
is comparable to what they get today.
-- Today, small businesses often have coverage that has high
deductibles and gap-ridden benefits. The legislation offers such
businesses better options that CBO assumes businesses will take. Such
better coverage has premiums that are 0 to 3 percent higher than the
average plans today, but will save money for employees by ensuring they
are not forced to pay high out-of-pocket costs for services not covered
by their current insurance.
-- In the current health insurance system, small businesses may see
premiums skyrocket if just one or two workers fall ill and accumulate
high medical costs. Health insurance reform will prevent insurance
discrimination based on health status, meaning that small businesses
will no longer be unfairly penalized if a worker falls ill.
9 to 12 percent premium savings for high-premium plans under current law. By assessing high-cost plans, the excise tax encourages businesses and individuals to streamline coverage, leading to lower premiums over time.
-- CBO estimates that the 19 percent of people in employer-coverage
in high-cost plans today will pay 9 to 12 percent less under reform.
This translates to premium savings of at least $835 for single and
$2,070 family policies.
-- This could yield increases in workers wages, by around $70
billion in 2019.
Nearly $10 billion in savings for small businesses.
-- Under current law, CBO estimates premiums to be $7,800 for
single policies and $19,300 for families in the small group market.
-- Small businesses that opt for comparable coverage under reform
could save up to $390 for single policies and $965 for family policies.
Assuming all 25 million people insured through small business save at
least $390 (more for families), this will yield nearly $10 billion in
savings in 2016 alone.
-- Additional savings will accrue to low-wage, small businesses
that newly offer coverage in the exchange. CBO estimates that roughly
12 percent of people in the small group market would get the credit
which would reduce premiums by about 10 percent in 2016. Multiplying
this by the population and average premiums in the report, this suggests
that about one and a half million people would save roughly $780 per
person on premiums in 2016.
-- Even those that CBO estimates will "buy-up" will save, paying
$100 less per family for coverage that is more protective.
At least $13.4 billion in savings for large businesses.
-- Under current law, CBO estimates premiums to be $7,400 for
single policies and $20,300 for families in the large group market.
-- CBO estimates that, under reform, large business premiums will
drop by $100 per single policy and $200 per family policy. With 134
million people enrolled in such coverage, this translates into at least
$13.4 billion in savings in 2016 alone.
Businesses can keep what they have.
-- CBO affirms that any proposed benefit mandates would not affect
the small or large group markets: "The requirement would have relatively
little effect on premiums in the small group market, however, because
most policies sold in that market already cover those services and would
continue to cover them under current law."
-- CBO also affirms the effectiveness of the grandfather policy:
"Further, small group policies that are maintained continuously would be
grandfathered under the proposal."
-- In the large group market, CBO affirms that "[Benefit]
requirements would have no significant effect on premiums in the large
group market."
No cost-shifting to the employer-based insurance market.
-- CBO states: "... CBO's assessment is that the legislation would
have minimal effects on private-sector premiums via cost shifting."
Additional Policies To Benefit Businesses. CBO does not include in its analysis several additional policies in the Patient Protection and Affordable Care Act that would benefit businesses.
Reinsurance for businesses that cover early retiree plans.
-- The proportion of employers that offer retiree coverage has been
declining precipitously over time, from 66 percent in 1988 to 29 percent
in 2009.
-- The proposal would provide a time-limited, Federal reinsurance
program to cover some of the cost of covering early retirees. This
translates to savings of up to $1,200 off the premium of every family
plan offered by that company.
Policies to slow health care cost growth.
-- Insurance oversight: In recent years, several states' insurance
commissioners have rejected unjustifiably high premium increases in the
small group and individual insurance markets. Health insurance reform
will allow insurance commissioners to continue to play this important
role and require transparency and oversight of premium increases.
-- Delivery system reform. Health insurance reform will invest in
care innovations such as accountable care organizations, make healthcare
providers more accountable and efficient through value-based purchasing,
and improve quality and patient safety, including reducing preventable
readmissions. A recent report by the Business Roundtable found that if
many of the delivery system reforms were adopted by the private sector,
large businesses could save $3,000 per employee by 2019.
-- Lowers expensive drug costs. Biologic drugs are some of the most
expensive drugs on the market, and yet there is no streamlined avenue to
get generics on the market to provide lower-cost alternatives. Reform
will create an expedited process to make generic biologic drugs
available, significantly lowering drug costs.
Immediate benefits. While the CBO report provides savings estimates for 2016, several of the policies discussed above would take effect immediately, including early retiree reinsurance, administrative simplification, small business tax credits, and increased oversight of the insurance industry.
Benefits to Businesses Beyond Lower Costs. CBO focused exclusively on health insurance premiums which are critical to businesses. There would be other benefits of health reform for businesses as well.
Improved workplace productivity.
-- The Institute of Medicine found that lost productivity due to
untreated illness among uninsured workers cost businesses between $75
billion and $150 billion per year. Expanding coverage to the uninsured
will create a more productive workforce.
-- Current job-lock (inability to leave current employment if it
will result in loss of health insurance) has been demonstrated to hurt
the economy through reduced productivity, and prevents an employee from
taking a job with potentially higher wages. By ending limitations on
coverage based on pre-existing conditions and expanding portable
coverage options through the health insurance exchange, reform will
increase the flexibility and productivity of the workforce.
New jobs.
-- Bringing down the cost of healthcare will enable investments in
business and job creation. The President's Council of Economic Advisers
(CEA) estimated that if the annual growth rate of health spending slows
by 1.5 percentage point, new jobs could rise by 500,000.
-- The health insurance exchange will expand options for coverage,
making small businesses a more attractive place for people to work, and
encouraging people to start up businesses of their own.
-- Health insurance reform could save 80,000 jobs in the small
business sector by 2019 and increase take-home pay by almost $30
billion.
-----
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Wednesday, September 23, 2009
Analysis Shows Narrow Age Rating Would Raise Premiums by Nearly 50 Percent, Causing Many Young and Healthy to Forgo Coverage
/PRNewswire/ -- Allowing age adjustments more restrictive than 5 to 1 would cause dramatic premium spikes for the young and healthy in the individual insurance market, making coverage unaffordable for many according to a new analysis.
The Blue Cross and Blue Shield Association (BCBSA) released today new data, prepared by Oliver Wyman's Actuarial and Health and Life Sciences practice, showing that a 2 to 1 age rating ratio would increase premiums for the youngest and healthiest Americans in the individual market in many states by nearly 50 percent in the first year, relative to a 5 to 1 age rating ratio.
Currently 42 states permit health plans to vary premiums based on age by 5 to 1 or more -- the primary benefit being that premiums are kept affordable for younger individuals to encourage broad participation. If more restrictive age ratings are implemented, younger people would opt out of purchasing coverage. Oliver Wyman estimates that, over a five year period, more than 1 million younger members would leave the market, resulting in a 10 percent premium increase overall for individuals in some parts of the country.
"An affordable, sustainable insurance market requires broad participation across all age groups to maintain more affordable premiums. As this analysis shows, overly restrictive age rating regulations would hurt a large portion of those with individual coverage -- making coverage less affordable and undermining the key goals of healthcare reform," said Scott P. Serota, president and CEO of BCBSA. "To ensure the long-term sustainability of healthcare reform, we must strike the right balance on age rating to avoid disproportionately burdening one segment of the population over another. For this reason, we support a 5 to 1 age rating similar to what the vast majority of states permit today."
The Oliver Wyman analysis also finds that restricting age rating ratios to 3 to 1 would increase premiums in many states by as much as 30 percent for younger people, relative to a 5 to 1 ratio.
"Younger individuals are much more sensitive to the costs of health insurance compared to older individuals. The bottom line is that if premiums are too high, young and healthy individuals simply will not purchase insurance and their needed cross-subsidies for older, sicker people will be lost, increasing the cost of healthcare for everyone," Serota said.
-----
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The Blue Cross and Blue Shield Association (BCBSA) released today new data, prepared by Oliver Wyman's Actuarial and Health and Life Sciences practice, showing that a 2 to 1 age rating ratio would increase premiums for the youngest and healthiest Americans in the individual market in many states by nearly 50 percent in the first year, relative to a 5 to 1 age rating ratio.
Currently 42 states permit health plans to vary premiums based on age by 5 to 1 or more -- the primary benefit being that premiums are kept affordable for younger individuals to encourage broad participation. If more restrictive age ratings are implemented, younger people would opt out of purchasing coverage. Oliver Wyman estimates that, over a five year period, more than 1 million younger members would leave the market, resulting in a 10 percent premium increase overall for individuals in some parts of the country.
"An affordable, sustainable insurance market requires broad participation across all age groups to maintain more affordable premiums. As this analysis shows, overly restrictive age rating regulations would hurt a large portion of those with individual coverage -- making coverage less affordable and undermining the key goals of healthcare reform," said Scott P. Serota, president and CEO of BCBSA. "To ensure the long-term sustainability of healthcare reform, we must strike the right balance on age rating to avoid disproportionately burdening one segment of the population over another. For this reason, we support a 5 to 1 age rating similar to what the vast majority of states permit today."
The Oliver Wyman analysis also finds that restricting age rating ratios to 3 to 1 would increase premiums in many states by as much as 30 percent for younger people, relative to a 5 to 1 ratio.
"Younger individuals are much more sensitive to the costs of health insurance compared to older individuals. The bottom line is that if premiums are too high, young and healthy individuals simply will not purchase insurance and their needed cross-subsidies for older, sicker people will be lost, increasing the cost of healthcare for everyone," Serota said.
-----
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Thursday, September 17, 2009
New Report Outlines Importance of Health Insurance Reform for Young Americans
HHS Secretary Kathleen Sebelius today released a new report, Young Americans and Health Insurance Reform: Giving Young Americans the Security and Stability They Need. The report highlights the vulnerability young adults face in the current health care system and the urgent need for health insurance reform. The complete report is available at www.healthreform.gov.
"More and more young adults wake up the day after their nineteenth birthday or on graduation day and find themselves uninsured," said Secretary Sebelius. "I've seen this problem first-hand. When my son graduated, he faced the challenge of finding health insurance. Unfortunately, too many of his peers are forced to go without the care they need. Health insurance reform will help insure young Americans have access to the affordable health care they need and deserve."
While seventeen percent of adults (those aged 30-64) are uninsured, thirty percent of young adults do not have health insurance. When young adults lose access to their parents' health insurance, they find it increasingly difficult to afford the high cost of health insurance.
Young adults are often less likely to work for employers who offer health insurance benefits. Nearly half of young people work part-time, and part-time workers are less likely to be offered coverage. Young people are also more likely to work for smaller firms, which tend to offer less coverage. Among young adults working in firms of fewer than 50 employees and who had coverage in 2006, one in four lost that insurance in the following two years - more than twice the rate of older adults.
The report also shows that 33 states allowed insurance companies to charge unrestricted premiums based on age, health status and even gender. In some states, a 22-year-old woman can be charged twice as much for her premium than a 22-year-old man.
The health care status quo is significantly impacting young Americans. In a recent survey, two-thirds who had gaps in healthcare admitted to forsaking health care because of costs including skipping recommended tests and treatment and neglecting to fill a prescription. Even with cost-saving measures, more than one-third of all young adults with coverage report having problems paying medical bills.
Health insurance reform would ensure young adults have access to quality, affordable health coverage, deter mounting health problems and ensure young people are not left with crushing medical debt after an accident or illness. Capping out-of-pocket expenses, co-pays and
deductibles while limiting arbitrary premium increases would provide affordable health care options for young adults as well.
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"More and more young adults wake up the day after their nineteenth birthday or on graduation day and find themselves uninsured," said Secretary Sebelius. "I've seen this problem first-hand. When my son graduated, he faced the challenge of finding health insurance. Unfortunately, too many of his peers are forced to go without the care they need. Health insurance reform will help insure young Americans have access to the affordable health care they need and deserve."
While seventeen percent of adults (those aged 30-64) are uninsured, thirty percent of young adults do not have health insurance. When young adults lose access to their parents' health insurance, they find it increasingly difficult to afford the high cost of health insurance.
Young adults are often less likely to work for employers who offer health insurance benefits. Nearly half of young people work part-time, and part-time workers are less likely to be offered coverage. Young people are also more likely to work for smaller firms, which tend to offer less coverage. Among young adults working in firms of fewer than 50 employees and who had coverage in 2006, one in four lost that insurance in the following two years - more than twice the rate of older adults.
The report also shows that 33 states allowed insurance companies to charge unrestricted premiums based on age, health status and even gender. In some states, a 22-year-old woman can be charged twice as much for her premium than a 22-year-old man.
The health care status quo is significantly impacting young Americans. In a recent survey, two-thirds who had gaps in healthcare admitted to forsaking health care because of costs including skipping recommended tests and treatment and neglecting to fill a prescription. Even with cost-saving measures, more than one-third of all young adults with coverage report having problems paying medical bills.
Health insurance reform would ensure young adults have access to quality, affordable health coverage, deter mounting health problems and ensure young people are not left with crushing medical debt after an accident or illness. Capping out-of-pocket expenses, co-pays and
deductibles while limiting arbitrary premium increases would provide affordable health care options for young adults as well.
-----
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page
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