Category Explanations

On 6/24/19, the President of the United States issues an executive order requiring Hospitals and Insurance companies to reveal what they are charging or paying for services.

The idea is to make health care cost transparent, which then would lead to consumerism and then medical providers reducing costs to attract more patients. Primarily pressuring the health care industry to become like any other industry.  “The goal is to create a more competitive marketplace where providers are competing for patients on price and quality.” CMS

The Insurance industry immediately pushed back, stating this action would have unintended consequences by pushing prices higher rather than down.  The insurance industry fears that publicly disclosing proprietary network rates (PPO, EPO, HMO) will only lead to medical providers demanding higher reimbursements based on the highest reimbursement rate.

The Department of Health and Human Services will propose regulations requiring hospitals to disclose what the standard charge for medical procedures in an easy to understand format. 

Both, which includes Insurance companies and medical providers will fight this executive order with all their resources because real price transparency could have huge implications on their business models.

If the public can retrieve what each medical provider charges for a specific procedure, that could lead to that patient going to the lowest costing provider, especially with current deductibles and out of pocket maxes.   Quality care should remain a factor, but a provider charging more for that procedure would have to justify why they are charging more. Maybe they have the best doctor in the state performing that procedure, or they have the newest technology, or it might come down to how the staff treats you before and after the procedure.  Price transparency could lead to lower prices and additional services.  

On the flip side If all the medical providers know what each other are charging, this could lead to higher prices by matching the highest price being charged.  

If the public had access to network discounts that the insurance companies negotiate with the medical provider are, it could have a massive impact on carrier selection.  Large employers with self-funded plans would have a clear picture on which insurance company offers the deepest discounts. A large employer typically will be responsible for the initial claims on each member called stop-loss insurance.   If the employer pays the first $150K in claims on each member and they have a crystal-clear picture that Insurance company X has 10% deeper discount than other carriers that can add up to significant savings.

On the flip side, all the insurance companies could arrive at a similar benchmark on reimbursements and then negotiate additional discounts that could go back to the carrier or client in the form of rebates. Thus, losing transparency

Read More

Indiana was one of six states to file a lawsuit against the Affordable Care Act’s health insurance provider fee (HIPF) for State Medicaid plans.

The U.S. District Judge ruled in favor of the plaintiffs, Texas, Indiana, Kansas, Louisiana, Wisconsin & Nebraska’s that the government must pay back $840 Million in Obamacare fees.

What is the Health Insurance Provider Fee?

The HIPF is an annual fee charged to health insurance companies on health insurance premiums. The Patient Protection and Affordable Care Act of 2010 assesses fees on insurance companies that provide fully insured health insurance coverage. 

The fully insured tax/fee is 3% of the total health insurance premium.

Business affected:

  • Individual and small group health insurance plans.
  • Large Group Health plans.
  • Stand- alone, dental & vision plans.
  • Stand-alone, behavioral health, and pharmacy plans.
  • Medicare Advantage plans.
  • Retiree-only plans.
  • Medicare part D prescription plans
  • Taft-Hartley Plans
  • Medicaid and Children’s Health Insurance programs (CHIP). Until recent court ruling!

The purpose of the tax/fee is to help fund federal and start marketplaces/exchange.

The estimated cost is $14 billion a year.

The authors of the ACA & PRACA projected that there was going to be enormous profits for the insurance industry because of the Individual Mandate. Thus, they could tax the industry to fund the law. They also assumed that these profits would create carrier competition.

The reality is the insurance industry passed this cost on to the members, which has led to everyone paying about 3% more to fund health care reform.

The fact that Medicaid plan is now exempt from the ACA tax is a massive blow to the ACA and the funding mechanism.  Indiana alone has over 2 million people on Medicaid, and it’s not clear the government can make up for this loss of funding for the ACA.  $840 Million is a year is just a start, other states will follow and with an estimate of $5.5 billion attributed to the Medicaid tax. 

This is a massive blow to the ACA law, that is has gotten almost no attention!   The funding of Obamacare may have just lost 25% of its funding.  This estimated operating costs for the marketplace is $2.1 billion.

It will be interesting to see if the government adjusts the federally facilitated marketplace. There could be a decision to turn those operations over to a third party. 

Read More

Short Term Health Insurance Final Rule 36 months of coverage

Short-term health insurance is a policy that is very similar to pre-affordable care act coverage.  The plan does not cover preexisting conditions and requires underwriting.  If your accepted, the cost is 50%-60% less than an ACA product. These plans are also using traditional PPO networks, which gives greater access to medical providers.

The final rule allows for short-term coverage to be extended up to 36 months. Currently, coverage can be offered up to 90 days.  This could be a game changer in the current individual health insurance markets.  Even though the final rule states a plan can be offered for 36 months, does not mean that all insurance companies will embrace this. We could see contracts that are guaranteed renewable for 36 months.

There is much criticism that these short-term plans will negatively impact the ACA marketplace. That criticism is valid because if someone is healthy and can obtain a 36-month policy for 50% less, that will be very attractive. Then the ACA pools will lose a portion of the healthy members that help to offset higher utilizers. Thus ACA rates will increase.

Why did the Administration Extend Short Term Plans?

Currently in Indiana and the rest of the country, if you are not eligible for tax credits/subsidies on the marketplace, the premiums are astronomically for most middle-class families.  Then add in the limited network access with huge out of pocket maxes, it’s not uncommon for a family to have $17,000 in premium with potentially another $14,000 in out of pocket, that could cost a family $30K a year.

That same family looks at the short term for $7,000 a year with the same out of pocket, given the short term does not provide the same level of coverage or covers pre-existing conditions. If a family is healthy, it’s hard not to entertain the short-term option.   That is why the administration extended short-term plans.

Short-term plans are underwritten which is where you have to answer medical questions and can be denied the plan.  Most of these policies are now enrolled through web-based applications, which makes for easy enrollment. The insurance companies use a technique called Post Claim Underwriting when you have a claim.  This where the insurance reviews your past medical history to determine if the claim was preexisting. If it is a prior condition, the insurance company can and will deny the claim.  One of the real problems with Post-claim underwriting is the delay of payment to the medical provider.  The insurance company may request all your medical records for the past five years.  Even if you are persistent most medical provider will take at least a month to release records.  If you get diagnosed with the condition that needs immediate treatment, the delay in payment could prevent an obstacle to continuing treatment.

In 2018, short-term insurance sales exploded in Indiana and the rest of the country. Smaller insurance companies got creative with their product offering. To be compliant with the rules set by the Obama administration, short-term was only good for 90 days, and companies created 3×4 policies that included 4 short-term policies with one application.  These created a huge saving for health Indiana families.  Now with the new ruling, I would predict that UnitedHealthcare & Humana launch new short policies.

When you start looking to purchase a short-term policy, buyer beware. You need to make sure you know what you are buying. Always look at the last page of the brochure that lists exclusions.  With these plans, you may want to consider buying them from a name brand carrier.

Read More

indiana group health insuranceMany companies will turn to the internet to search for insurance benefits. Since 1998, we have been helping these businesses obtain group benefits. In the beginning of the internet, very few people would go to the world wide web for insurance information. Today that has all changed, business owners want information at their fingertips.

We have seen all type of companies/people come to our site and ask questions. Over the last 20 years there has been a trend on the situations the company is in that leads them to us.

Here are common situations:

Small business that is less than 5 years old, looking to attract or retain employees. Start up companies that are funded will seek benefit information from the web. These companies usually need costs quickly because employee benefits are last on this list. Businesses under new ownership, a small business was recently purchased there may be an existing benefit package in place, new owners want to revamp benefits or shop out the market for a better deal. Then their company’s that are looking for new broker representation. The insurance community is understaffed, which is becoming a serious issue for companies when it comes to service.

Requirements for Group benefits:

For business to be eligible for group insurance benefits. Every week we field questions on how do we qualify for group benefits?

Group Health Insurance: There needs to be two enrolling members and one of the members needs to be on the wage n tax form (W2). With the passing of the affordable care act (ACA) no longer will husband & wife companies be eligible for a group plan, there must be a W2 employee.

indiana group health insuranceParticipation Requirements:

Most insurance companies require group to have a certain amount of participations to be eligible. Small group health plans carriers have different requirements. The standard use to be 50% of the full-time employees to be on the plan. A full-time employee in the insurance world is 30 hours a week. Other companies you must have 75% of “net eligible”. Net eligible is employees that do not have other coverage, so an Insurance company like Anthem, would accept a group that had 40 full time employees but only 7 electing coverage, if all the waivers had qualified coverage.

Group with 50+ participation requirement can be a bit more flexible. UnitedHealthcare has no participation requirements, a company of 99 employees could have only 10 taking coverage and the company would qualify as a group.

Additional lines of coverage like Life, Dental, Vision, & Disability have more standard participation requirements. Most companies require 25% participation.

Participation requirements do change more frequently than you would expect. The health insurance carriers could change every year.

One benefit of the affordable care act is the not having to meet participation for group health. If you submit your group health installation between November 15th and December 15th, you do not have to meet participation guidelines. Essentially every small company in Indiana can obtain health insurance, should they choose to do so.

Read More

Group Health Insurance Indiana

We quickly approach Jan 1st, 2018, the state of health insurance in Indiana is nowhere near close to being stable.

Individual Health Insurance

The Affordable Care Act has failed every Hoosier that pays for or towards a health insurance policy. One segment of the population has benefited from the ACA, and that is the Medicaid Expansion (HIP2.0). HIP 2.0 members has swelled to over 500K Hoosiers. The marketplace did make it much easier to start the enrollment into Medicaid. Originally Indiana was projected to have 1 million residents that were buying health insurance coverage from the exchange. It was estimated we had 150K on the exchange in 2017. Estimated is the correct description because half of the membership would drop off mid-year.

Hoosiers who purchase coverage through the exchange will only have two carriers to choose from in 2018. (Ambetter & CareSource) Both of these companies have large Medicaid divisions. CareSource’s exchange network is about 20% larger than their Medicaid network. One of the frightening concerns that no one is talking about is the artificial specialist network. This is where they will list the same doctor multiple times under different addresses.

If you have traditionally purchased individual health insurance off the exchange, that is no longer an option. There will be no carriers offering off-exchange policies. The only option will be the two carriers offering coverage through the exchange.

If you live in an Indiana county that offers Ambetter, then that is the best of bad options. They will be offering a Health Saving Account plan. If you want to know why this is the best of the bad plans, contact us.

Group Health Insurance Indiana Plan Options

Indiana Small Group Health Plans
A small group in Indiana is less than 50 employees. If you currently have a small group health plan that is considered grandmother on Anthem’s legacy platform, it’s been a wild ride. 2018 your renewal date has most likely moved to Jan 1st. This is after four years of having the renewal date move moved every year. This grandmother block was not supposed to renew this year under the ACA, but the new administration decided to allow this business to continue. Which is good news for most small groups, but some are receiving big rate increases. The average rate increase is 13% but can go as high as 30%. This block of business is rated based off of claims. The last three years, these group plans have received low rate increase because the plans were all underwritten. Over time, claims do occur, and now it’s showing.

The fully insured group options you can count on one hand.
There are three carriers who offer small group coverage. Unitedhealthcare, Anthem, & IU. 2018 rates have increased with all three carriers. The average composite premium was already around $500 a month per employee; now they are closer to $600. This is getting very close to out of reach for most small group employers. Now a company has to get creative with not only plan design but with how the premium is rated. What to know an effective strategy? Contact us to learn more.

Level Funded Partially Self Funded
One group health option that has shown to be effective is using level funded health plans for small groups. These plans have underwriting, which creates significant savings if your employees and dependents are healthy. Premiums can be as low as $300 per employee per month. After underwriting the average premium is about 30% lower than the fully insured market. Indiana now has multiple carriers offering these options. Each carrier viewed risk differently, the best approach is to underwrite with all of them to get the best deal. The largest saving happens with there are multiple dependents being covered.

Large Group Coverage 50-99
The Large group allows for underwriting, and this is key to getting lower premiums. If the company has 50 eligible, then you can go to large group. For 2018, Anthem is counting part-time employees at full time, so that you can go to the underwritten market. This is a game changer for many Indiana companies. There are only a couple of companies competing in this segment. One thing that has come as a surprise, is the level funded carriers are not as competitive in this segment.

The President Executive Order
The new executive looks to be another failed attempt by Washington DC to help the current health insurance markets.

First, the ending of the government paying cost-sharing reductions. Most politicians and journalists have little understanding of the actual impacts of this. Cost Sharing Reduction (CSR) is where people making less than 250% of federal poverty level (FPL) would receive lower deductibles and out of pockets when they purchased health insurance through the exchange. The government was paying the difference directly to the insurance companies. Under the order, these payments will stop, but the health plans will still have CSR. So now the two insurance companies left in Indiana, will charge more in premium for those options. On the exchange, a qualified member will not pay more than 9.5% of income towards premiums. It will impact Hoosiers that don’t receive tax credits and want to purchase a silver level plan.

The second order has to do with increased flexibility with Health Reimbursement Accounts (HRA). The idea here is to give employees money on a tax-deferred basis so that they can purchase Individual plans. If there is no individual market, this has little impact in the short term.
The third is the creation of association plans or buying health plans across state lines. Currently, the carrier can sell across state lines but choose not to. There are multiple reasons why they don’t do this, but if state regulation along with federal mandates removed, this could create another individual market. With association plans, if they don’t have to abide by ERISA and ACA laws this could also open up different health insurance options. None of this would happen in 2018; it would take years for products to be created.

A recent two-year study revealed how much Indiana hospitals are charging for health care. The study used Medicare reimbursement rates as the benchmark. The study that received almost no consideration proved that Indiana hospitals are charging over 300% of Medicare rates. In 2018, hopefully, more attention is raised about what our medical community charges. There is a very quiet movement of using health insurance plans that reimburse based off of Medicare rates. The cost is significantly lower than using a network. The medical community is reluctant to accept these low reimbursement rates when they are used to getting 300% above Medicare.

Read More

It would be wishful to say that group health insurance under the ACA has stabilized. Comparing it to the Individual market under the ACA, the group is calm.

For companies with less than 50 full time employees, or the equivalent under 50, fully insured products are guaranteed issue. This mean there is no underwriting. When employees complete applications, they are not asked any questions about current/past health conditions. The cost of the plan is based on county, age of the employees & plan designs. This can be an advantage for companies that have younger employees. The younger employees can reduce the rates through composite rates. This can have a huge impact, if a company and the employees can afford the health plan. We have been able to get the employee rate down as low as $239.

The county where the company is located act will impact rates. Under the ACA, this is perfectly acceptable to increase or decrease rates based on the county. If a county has had a history of higher risks/claims, then the group health plan can and will cost more.

Plan design has the largest impact on group premiums. The two main carriers in Indiana are UnitedHealthCare (UHC) and Anthem. They are really the only carriers that are in the small group fully insured market.

Anthem small group plans designs, really have not changed much under the ACA. The plans are somewhat straight forward. The deductibles & office visit copays have stayed the same. Anthem has slowly started to change their prescription drug co pays. The one aspect that has changed is the out of pocket max. These have increased under the ACA. As it stands Anthem is not competitively priced in the small group product. This is by choice.

UHC surprisingly, has been very creative on developing new products that reduce premiums. They have changed plan designs, networks and even added gate keeper plans, with the goal of controlling cost. They have established that a split co pay is now acceptable to most insure. This is where you have a lower co pay for general doctors, then a much higher co pay for specialists. This is to create consumerism. A specialist may cost $330 for a visit and general doctor may cost $90. So UHC would rather pay for the general office visit. The next change they have made is co-insurance. They have created some plans with 50% co-insurance after the deductible has been met. The insured will hit the out of pocket max much faster. Another surprising move from UHC was the establishment of the EPO network. This type of network is a hybrid of a PPO & HMO. It has national provider access but no coverage out of network. Gate Keeper policies, where the insured must choose a doctor for all of their care. That doctor must be involved with all care provided or it will not be covered. UHC also has changed their RX co pays significantly. It appears that they are running a three tier co pay system, the reality is they are running a six. They have increased cost to the insured, on drugs that cost more. All of these cost cutting measures add up for both UHC and small groups. These have led to lower premiums under the ACA but they have shifted more cost onto the insured.

The small group plans have stabilized with UHC. Anthem has not pulled the trigger on the new plans under the ACA. Anthem could come out with a new product line up that is very different than what they are offering small group now.

There is one segment of Indiana small group that is very unstable and that is grandmothered policies. These are policies that were sold prior to the ACA going active. The Federal government and the State of Indiana have agreed to allow these plans to be in place until Dec.31st of 2017. The health insurance companies and many so called experts, do not know what will happen when these plans are no longer terminated. Will these small Indiana companies accept a 44% rate increase under a ACA plan? The answer is NO, they will not. These business owners will look for alternative solutions. They will contact a broker like myself, Nefouse & Associates, INC, and we will provide that solutions to lessen the blow of the ACA.

Read More

After attending multiple broker advisory meetings, on the individual and small group markets we now have view of the health insurance markets.

Individual health insurance on and off the exchange:

This market is completely unstable! The insurance companies have had a difficult time adjusting to the new rules, regulations and managing the risk. 

The first issue is open enrollment, the insurance companies were never set up to take on this type of volume in such a short time period.   This has led to significant strain on systems and personnel.

The next issue is the federal market place inabilities to operate as intended.  There communications with the carriers has created more administration work.  Here is an example, when someone switches plans with in the same carrier, the government would send one communication canceling coverage and one communication electing new coverage.  The problem is they do not send the info in order, which lead to someone losing coverage who was not supposed to.

Risk = Loss

The insurance carrier have taken on a lot of risk both on and off the exchange. This risk has turned into large losses for the carriers.  The first 2 years of the ACA, only the sick people enrolled in plans.  The government promised larger enrollments to offset that risk and that has not happened yet.  Some carriers have had huge losses to the point that they are considering pulling out of the market.

Special Enrollment Periods= Loss

Under the ACA, a qualifying life event creates an enrollment period where you can enroll into a plan. It has turned out that this business is high losses for the carriers. So high the insurance companies investigated the data.  One-third of their enrollments were coming from SEP’s and half of their overall claims came from this block. The marketplace is not enforcing the SEP rules of documentation to prove the event.  This has led to people gaming the systems which creates losses for the carriers.

Where do we stand?

The individual market is completely unstable and there is no clear picture for 2017.  Carriers may ask for large rate increases, if the government does not grant those rates increases, then they could withdraw from the market.  This would be the nuclear options for an insurance company but it could very well happen.  In May, all of the health insurance companies will file for 2017. At that point we will know where the market stands.

Read More

The first tax season is behind us and no one knew what was going to happen with tax credits. The Federal Marketplace compared what was reported on the tax credit application and what the individual filed on their tax returns.

It was estimated that 45% of the people that purchased health insurance with tax credits, would have to pay a portion of the credit back. The average repayment is around $800 for the country.

A lot of people that had to repay a portion of the tax credit fell into a couple of different situations. Commission Sales people seem to be in a situation where they had to repay. Unemployed Hoosiers, that found employment, forgot to notify the exchange about a change in circumstance. There has also been a lot of confusion over Social Security benefits.

03B90497

The problem with the new tax credit system, is there is nowhere to get answers for complicated situations. The IRS, will refer you to different sections of the IRS code. The health insurance market place employees, have very little to no training on tax issues. If you have a complicated situation there is very little help.

For 2015 enrollments, we were able to recognize some of these situations in advance. We advised our clients not to take the entire tax credit up front. This is a very difficult decision for some people to make. Premiums are extremely high, so without taking that full tax credit, it can be affordable. For some Hoosiers, that knew they were going to have income changes, they did go with this option. Some even choose not to take any tax credit until they file their 2015 taxes.

 

Read More

When you have a health insurance policy in place and you end that coverage, you would usually receive a certificate of prior coverage. With that certificate, the new insurance company that you signed up with would then ask for that document to confirm you had prior coverage. In 2014 specifically, the insurance industry used the certificate to confirm your qualifying event.

This year Anthem stated that they would no longer mail out these certificates and we expect other carriers to follow suite. If a carrier can cut out additional administration cost, they will. Under the Affordable Care Act, carriers have to operate in the medical loss ratio. This means they can only use 20% of the premium for administration and profits.

Not having your certificate could create issues with qualifying events in 2015. However, you might be able to get a copy of the certificate if you have an online portal. Another option for obtaining your certificate is contacting customer service on your insurance card and asking for one.

Here at Nefouse & Associates, we will not let something like this prevent you from obtaining new coverage. We will adapt and find new ways to overcome these type of obstacles.

Read More

A common situation here in the United States is an older parent living with a first generation American. This older parent is often not a US citizen, meaning they don’t qualify for Medicare.

Here at Nefouse & Associates we have found a solution to this problem under the Affordable Care Act. We’re able to provide health insurance for the entire family, which is great for multi-generational families living under one roof.

How This Works

As an example, let’s say we have a grandmother, mother, and then children. The grandmother is not eligble for Medicare, but is eligible for health coverage through the Health Insurance Marketplace. So, what we do is take the entire household and apply tax credits at the Federal Exchange where, because the grandmother in this situation, is eligible because she is not on Medicare. The entire family may qualify for a tax credit, which is then applied to lower the monthly premium cost on all the members of the family, including the grandmother.

This is a great benefit for older immigrants that don’t qualify for Medicare because of their age. But now, we can insure the immigrant parents living with their children through the Health Insurance Market Place.

To learn how Nefouse & Associates can help provide health insurance for your entire family, contact us today!

Read More