Author Anthony Nefouse

Kaiser has reported that HHS will delay the “Basic” Health plan until 2015.  The “basic” health plan was to help people that are making 2 times federal poverty level.  This plan is to be designed with very little cost to insured both from a claims and premium standpoint. The other advantage to this plan is if the insured income increase they do not have to pay back the premium subsidies.

The problem with the delay is many state insurance programs are ending Dec. 2013. This Basic plan was suppose to be one option for those people. Indianapolis comprehensive health, which is our high risk pool, could be shutting down at the end of 2013.  We could have the same situation with Hoosier Health wise or Health Indianapolis plan. These plan could be gone at the end of this year. This “Basic” plan is intended to fill in the gaps for coverage for people that can’t afford the premium subsides on the exchange.

This is a Government Health Insurance plan. This plan could be seen has competition to private health insurance companies. The Government plan does not have to follow the same rules as a private insurance plan.  Could every household with income of $46,000 elect this plan, Maybe!


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UnitedHealthCare will be consolidating and managing its pharmacy benefit program in house through OptiumRX. Currently the pharmacy benefit manager has be Medco.

UHC will begin migrating members starting in early 2013. They have invested more than $200 million in developing OptumRX.

UHC starting using OptumRX back in 2009, when it moved Medicare Part D member to that platform. At the same time they were able to move 1 million Medicaid members to the same platform. UHC believes they have a proven track record with OptumRX.

By moving all the pharmacy services in house, UHC believes they can improve outcomes and better manage total health care costs. If you have health insurance form of UHC, be on the look out for more information about the transition.

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Next year all health insurance plans must meet the essential health benefits to be considered a Qualified Health Plan (QHP)

These requirements are base on:

  1. If the plan is offered inside or outside the exchange
  2. IF the plan is fully insured  or a self funded plan

Premiums for Individual and small groups will no longer be based of health status. They will be based off of family tier, age, geography, and Tobacco use.

All of the plans must use a 3 to 1 age bands. This means the highest premium cannot be more than 3 times the lowest premium for the same plan.

All of these requirements will impact rates.

Health Insurance premiums on Individual plans will sky rocket. Under the new guidelines, health plans will be required to cover more benefits. The coverage of maternity on an individual health plan will have a huge impact on premium.

Small group rates will very interesting. A young healthy group could see a large increase but an older high claims group could see a decrease.  The healthy group will help to offset the high claims group. That is if the healthy group keeps a group health plan in place.

When it comes to rating in geographical areas is a very interesting topic. There are some counties that are much healthier than others in the area. If we were to compare Hamilton County to Lake County there should be a large difference in rates. Hamilton County is a healthier county and should have lower rates than a county like Lake, where utilization is very high.  Could this type of rating have an impact on where business chooses to be located?

What about Indianapolis businesses that border other states?  If a company in Elkart, has employees crossing over to Illinois for medical services will they have higher rates? There is a chance they will have higher group rates because medical services in Illinois cost more than Indiana.

The geographical question for health insurance in 2014 is going to play a huge issue on group health insurance rates.

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  1. Insurance companies are held accountable. The insurance company must spend at least 80% of the premium collected on medical care.  If they don’t, then a rebate check will be issued to the group.
  2. Insurance companies are health accountable for large rate increase. Insurance companies must publicly justify any rate increase over 10%.
  3. Tax Credits for Small group Health Plans. If you have fewer than 25 full time employees, you may qualify for a small business tax credit. This tax credit can be up to 35% of your premium costs. Additional tax credits will be available in the future.
  4. You are not required to provide insurance for your employees. Companies with less than 50 employees are exempt from all penalties for not providing health insurance.
  5. More Health Insurance options. Under the law no American will have to worry about losing coverage if they change their job. All American will have access to the individual market and exchange market for guaranteed issue health insurance policies. In 2014 companies with less than 100 employee will have the option of purchasing group health insurance through an exchange.
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As we enter 2013, there are huge changes on the horizon for health insurance locally and the rest of country.   Here are few of the bullet points of what health care reform is suppose to put into place.


•             Administrative simplification begins

•             Annual fee on medical device sales begins

•             Deduction for expenses allocations to the Part D subsidy for  eliminated

•             Employee notification of access to Exchanges

•             FSA contributions limited to $2,500

•             High earner tax begins (applies to individuals)

•             PCORI fee increases to $2 per member/year

•             W-2 reporting of the value of employer sponsored


Individual health plans and small group health plan will operate the same as they did in 2012. There is still going to be an underwriting process for both lines of coverage.

This year, we should know how the Federal Exchange is going to operate.  This is the essential part of the health care reform laws that will impact most people.  Through the exchange residents should be eligible for subsides. These subsidies could be significant to the point where some people pay no more than 9.5% of house hold income towards health insurance premium.

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It turns out that everyone that has a health insurance policy will have to pay an additional $63 a year. This $63 is to help fund the health insurance industries risk for in 2014. If you have an individual, small group, large group or self funded plan you have to pay.

In 2014, the individual and small group health insurance carriers lose the ability to address risk. There will no longer be any underwriting to help the carriers offset risk.  In the 2000+ pages of the health care law was a provision that every policy holder must pay the $63.

This creates a major problem for large companies with self funded plan. They pay their own claims up to a certain stop loss.  They do not benefit from the health care laws of offsetting risk but now they have to pay for it.

So every policy holder in the country will have to pay this $63 a year to offset risk in the guaranteed issue market of health insurance.

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Community rating is most often found as part o...
Community rating is most often found as part of health insurance systems in various countries

In 2014, we are going to see a major transformation of the small group health insurance market.

One of the biggest changes is the community ratings. No longer will a small group premium be based on medical conditions. This means most will groups will have similar pricing. Right now small groups in the area are medical underwritten.  Healthy groups have lower cost than high utilization groups. The high utilization groups could have a decrease in premium.  The healthy groups could have an increase in premium.  This will create a unique situation for small business that has not been seen.

At this time, we do not know what the community rating will look like. Some of the carriers do! The national carriers that have been operating in states that have community ratings have large amounts of data on this subject.  This could create a problem for the smaller companies that do not have experience in these markets. This could lead to less competition in the small group market.

If a small business decided to keep a group plan they will want to be with a company that has the experience of community rating.

United Healthcare is really the main carrier in the Indianapolis market, that has that kind of experience for small group.

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Health Savings Accounts look to be qualified health plans under the health care reform act. This is huge news!

Initially when the health care laws were passed, Health Saving Account we not considered qualified. This meant that if you had an H.S.A plan you would be subject to the tax penalty.

From this report, the Actuarial Value calculator gave a pass to the H.S.A plans under the Bronze category.  This means that local residents will be able to purchase an H.S.A plan inside and outside the exchange. Inside the exchange, a policy holder could qualify for subsidies which would pay a portion of the premium.

When the private carriers join the federal exchange the H.S.A plan may be their primary offering. This plan designs encourages people to become a consumer in their health care spending.

Some Hoosiers really dislike the H.S.A approach because there is no first dollar benefit. A first dollar benefit is co pays for office and RX. Other Hoosiers love the plan design. The plan design is very easy to budget for and the premium is less. If you are not using first dollar benefits why pay the higher premium?

This is very good news that these plans will still be a viable option in the area and for and the rest of the country.



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NY Times

Barack Obama signing the Patient Protection an...
Barack Obama signing the Patient Protection and Affordable Care Act at the White House (

This is a article about the fear of the Affordable Care Act in low income industries. Restaurant and Hospitality owners could be impacted negatively by the tax penalty of not offering a group health plan.

In these industries it is difficult for employees to pay their portion of the premium on a group health plan. These industries have been known to have high risk from a claims standpoint which leads to higher premiums.  It will be even tougher once qualified health plans are established because the cost will go up.

Small business owners are very hesitant to expand their operation with the penalty right around the corner.  If a small business has 90 full time employees and is not offer a group health plan, the penalty is estimated at $120,000 a year.

These business are unable to cover the entire cost of the health insurance premium. The employee then will elect not to take coverage. Then group plan does not meet participation requirements and loses the coverage. So the employer has tried to establish a group health plan but does not meet requirements. Now they will be tax.

A lot of small business will have a difficult time affording the tax. There is going to be a scramble to find options that will help them. Those options could be making full time employees part time. A employee that was working 40 hours a week is now working 29 hours. They are no longer eligible for group health and the employer may not have to pay a penalty. This could be a common practice in the low income industries.

These low income employees should do better purchasing a policy through the federal exchange. In the exchange they would not pay more than 9.5% of house hold income towards a health insurance policy. These families may still have a hard time picking up the 9.5% . Look at a family of 4 with house hold income of $60,000. They may have a hard time budgeting for $5,700 a year in health insurance.



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