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Anthem Buying Home Healthcare Aspire

by Anthony Nefouse in News

Insurer Anthem Strikes Deal for Palliative Care Company Aspire Health

Here is a story that was given very little media attention but is big news for Indiana’s Anthem. Anthem is buying Aspire Healt

h that provides home healthcare services for patients suffering from serious illness. Aspires help patients and family manages symptoms of extreme illness to improve quality of life.

Why is this Important News?
We are now seeing the line between health insurance company and medical providers continue to blur.

Integrated Care
Health insurance companies are expanding their footprint in the medical services, and we should see integrated care become more streamlined. In this model, one event would trigger communications with needed medical services, during treatment, all medical providers would be in contact with one another which should lead to better outcomes and patient experience. This is a positive thing.

Lack of Choice
There would be little incentive for Anthem to contract with other Home Healthcare companies. This could lead to a lack of choice and essentially prevent small businesses from entering the market.

Health Insurance companies are starting to look for additional revenue sources in the healthcare field and that is the one way to control rising healthcare costs. In the next 20 years, we could see where the hospitals & insurers are one. Health insurance will move to the managed care model and that may be a good thing. When it comes to healthcare, maybe we need someone to manage us because the medical system is difficult to navigate.

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Channel 13 Short Term Insurance Story

by Anthony Nefouse in News

Channel 13 WTHR Investigates recently reported on a controversial story about Short-Term Health insurance and asked me to be a part of it being a health care professional.

The story is about a family that had been using short-term health insurance and the women was diagnosed with breast cancer. The policy she had purchased was good for 90 days.  Upon the initial diagnosis, the insurance company denied the claims.  At the end after a formal appeal, hiring an attorney and having channel 13 investigate, the insurance company agreed to pay the claim.

With short-term health insurance, companies will conduct Post-Claim Underwriting. This is the practice of researching previous medical records to determine if the condition had been previously diagnosed or had signs or symptoms. If the company finds evidence that the situation was pre-existing, then they will deny the claim.   One of the issues with Post Claim Underwriting is it delays the process of paying the claims, which can lead to delayed treatment. 

With individual health insurance becoming more and more unaffordable in Indiana, short-term health insurance has become a solution for some.

Guide to short-term policies.

1.    These policies are not for everyone. You need to be in good health, not being treated for any conditions.

2.    Look at the term of the policy. Most policies are for 90 days, but there are new products called 4×3 which provides coverage for 12 months. The 4×3 is four short-term policies but underwritten with one application.  In this arrangement, the policy will restart every 90 days. 

3.    Confirm you are purchasing short-term plan. We are seeing more and more Hoosier who are buying indemnity products thinking they are short-term policies.  The indemnity plan may pay a set amount per claim occurrence which ideally should be purchased in conjunction with a health insurance policy to offset the out of pocket.

4.    Look at the network and confirm that it’s a PPO network and it’s a recognized in your community.

5.    Read the brochure or at least the last page they address exclusions.

6.    Purchase the short-term policy from a local broker. Work with an agent that cares about the products they represent like Nefouse & Associates.

Tony Nefouse

https://www.wthr.com/article/fighting-for-coverage-short-term-health-insurance-may-result-in-long-term-trouble

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Tony Nefouse’s Complete Guide to Group Insurance: “Networks”

by Anthony Nefouse in Group Health, News

group insuranceWe come to the point where you are ready to start reviewing group insurance proposals. Before you start receiving insurance proposals information about your company should be taken into consideration. Employee location has a large impact on what type of plans a company should be entertain. Does the employer have employees in other states, does the employer plan on expanding into other states?

Networks
Most group health insurance plans will have some commercial system. The most common interface is the Preferred Provider Organization (PPO). PPO’s are considered a traditional network that most people are familiar have experience. Anthem Blue Access, UnitedHealthcare has Choice Plus, Aetna Signature, Cigna Open Access, Sagamore Plus, PHCS, Encore would be PPO networks Indiana are familiar. PPO offers large national systems with coverage for out of network providers.

Exclusive Provider Organization (EPO) is a type of network that is becoming more popular. The EPO usually is an extensive national network, but there is no coverage out of the system. Some people do not like the idea of not having out of network coverage. The EPO plan can cost less than a PPO and, in most cases, including most of the local medical providers. The gaps in the network usually come from costly medical facilities that choose not to join networks. A common out of network provider would be a drug rehabilitation center.

Health Maintenance Organization (HMO) provides a limited network of medical providers but could have a more integrated care model where all the medical providers are in communication with one another. In most HMO’s a member must choose a primary care doctor in advance. An HMO should have cost savings vs. the PPO & EPO because the network has more control over cost. Indiana does not have a lot of HMO’s to choose from, IU Health plans are one of the few carriers offering this type of program.

Point of Service (POS) is a hybrid of HMO & PPO plan where you must choose a primary care doctor but may have access to PPO network. All care must go to the primary doctor. UnitedHealthcare has brought these plans back through their Navigate products.

Reference Based Pricing is a health plan that does use negotiated contracting with medical providers but instead confers the claim based on a multiplier of Medicare reimbursement rates. This type of arrangement is significantly cheaper because they remove multiple layers from the health care system. There is a significant risk with a doctor not accepting this type of agreement or balance billing by the provider to the patient.

Multi-State Employers:
If you have employees in multiple states, it’s important to look at a national network. Research the systems access for the out of state employees. Some insurance carriers will have local PPO network with a different national network. Anthem is a perfect example of this with the Blue Access PPO network for Indiana and then the Blue Card network for the rest of country. The HMO model may not be the best option for multi-state employers, and most HMO plans will have employee location requirements to be eligible for the program.

Dental Networks:
Dental networks are very similar to health plans where there are PPO & HMO models. Unlike health plans, PPO dental network may not provide access to most dentists. Dental providers have been reluctant to join dental systems because they do not want to discount their prices. Most dental plans will offer some level of coverage for out of network dentists. The DHMO may offer no coverage out of network but provide significant member savings in the system.

Vision Networks:
Vision network seldom get the attention that health or the dental system will get. This could have to do with the cost of vision is relatively inexpensive vs. other insurance coverages. Vision plans also mimic health network and most plan offer rich benefits in the network and some coverage for out of network.

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Tony Nefouse’s Complete Guide to Group Insurance: Request for Proposal

by Anthony Nefouse in Group Health, News
indiana group insurance
Get your company the group insurance it deserves

At this point, you are ready to start submitting proposals for group insurance.

First-year Benefit Offering:
If you are offering a group health plan for the very first time, there are multiple issues to be aware of. Hopefully, you have surveyed the current employees and know who is interested in electing coverage. As the owner, cost is always one of the most critical issues. It’s best to go into the process with some budget already established. If you are considering contributing the minimum employer contribution, that would be 50% of the employee premium. Currently the average employee only bonus is around $550 for a high deductible health plan. If you have seven employees that are interested, the company is going to be responsible for about $1,925 a month, plus the owner premiums if they are electing coverage. A lot of first-time benefit groups lose sight of their contributions and then can result in a messy situation.

Owner needs and employee needs:
Indiana small employers sometimes have a huge disconnect between the owner and employee when it comes to health insurance wants & needs. On most small group health plans (under ten lives) you don’t always have the option of offering multiple plans. This can create a problem where the owner of the company wants rich insurance benefits, but those plans can cost prohibitive to the employees. Considering that on plan designs is essential. A standard solution to this issue is going with a carrier that offers dual options plans like UnitedHealthcare for the small group industry.

Well-Funded Start-Ups:
If you oversee the insurance benefits for a start company, your background may be from a large group, and now all sudden you are in the small group arena with plans that are pre-designed. This can cause some frustration as you may want a particular type of plan design. If you are electing fully insured or self-funded be prepared that you may have to make some compromise on that first-year benefit offering. When it comes to long-term disability, it is difficult to get a plan for a 1st-year company, especially if you have less than ten employees. Most carriers require that the company has been in business for two years before they will offer coverage.

A good broker like Nefouse & Associates knows how to handle startup companies if you want a certain level of benefits, we can make it happen.

Replacing Current Insurance Benefits:
When we replace current benefits, a company should have a goal on both a price and benefit designs. On groups under 50 employees, a price goal can be 15%-30% reduction in premium. To obtain this kind of savings on the health plan, we usually must go through underwriting. Plan designs will also have an impact on price; a new traditional co-pay plan may have additional costs for or “specific co-pays” for outpatient and inpatient coverage. New group products may also feature split office visit copays for primary and specialist along with an additional pharmacy tier. All these new features shift the cost to the employee but have become a lever to try to control cost. On existing ancillary coverage (dental, vision, life, & disability) It’s relatively easy to create a bidding war from the carriers. Individual companies are very aggressive on these insurance benefits.

After a bit of thought, you are ready to send that census over to us Nefouse & Associates for proposals. After a conversation, we can determine what plans to present, that way we are not wasting time. The type of company, locations of employees, the age of employees, & insurance goals all plan a factor in what plans we will present.

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The Trumps Administration Blueprint to Lower Drug Prices

by Anthony Nefouse in Drug Prices, News

The Trump administration released the American Patient First which is a guide to lower drug prices. The blueprint provides two phases; Phase 1 is actions the President can take to lower prices, Phase 2 is for HHS actions of consideration and solicit feedback.

American Patient First Blueprint

The blueprint is looking at four areas to address, Increased Competition, Better Negotiation, Incentives for lower list prices, & Lower out of pocket costs. This blueprint seems to be geared at mostly at Medicare members, which does make sense as they have been hit the hardest by prescription drug prices. The blueprint is also going after the Pharmacy Benefit Manger (PBM). It even states that PBM’s should have a fiduciary responsibility of providing the best price. As of now, PBM’s are not held to this standard and have openly admitted they do not have the responsibility of delivering the best prices. The blueprint does go into detail about how outdated the PBM model and how they are impacting the public in a negative manner.

Would this Blueprint have any immediate impact on drug pricing? The answer is yes! The PBM’s are already making changes to their business models, and this may be one of the reasons they have agreed to be bought out or merged with other companies. UnitedHealthcare’s PMB Optum was the first to announce they will start sharing manufactures rebates with their full insured clients. Outside of the transparency with PBMS, the rest of the blueprint could take years to have an impact on prices. There is a large emphasis on fast-tracking generic drugs, with the current system manufacture has up to 20 years of patent protection but the clock starts ticking when the drug was in development. Maybe it takes seven years for a generic to come to market. If that is fast-tracked maybe it’s cut in half.

Increased Competition:
Immediate Actions to prevent manufactures gaming the regulatory processes. The FDA has a Risk Evaluation and Mitigation Strategies (REMS) that regulates similar or generic drug coming to market. If manufactures are unable to delay similar or generic version of drugs coming to market, then this could have an impact on costs. What is meant by gaming the system, under the current rules the first company to file for the generic is given exclusivity, which allows an application to be “parked” with the FDA, thus delaying competition.

Better Negotiations:
The Blueprint addressed Medicaid & Medicare Part D & C providers. Medicare provider would be able to negotiate with the drug manufactures, as of right now it appears that those providers are prohibited from doing so. This would also allow for part D plans to change their drug formulary standards. Also mentioned is inflation limits on drug pricing and to make public average sales prices. Addressing price disparities in the international drug markets. One would have to guess that increasing world prices could lower US drug prices?

Creating Incentives to lower Prices:
Current list prices of drugs do not reflect discounts, rebates or concessions paid to the pharmacy benefit manager, Insurance company, health plan, or government program, which leads to the insured paying higher drug prices. If these discounts are made transparent and applied to the insured, it could lead to lower costs. The plan goes a step further by eliminating the rebate program in an attempt to lower out of pocket costs, thus forcing Medicare Part D providers to negotiate with manufacturers to lower prices based on costs being forced onto the Medicare D providers.

Reducing Patient Out of Pocket Spending:
Provide Transparency on drug pricing for all Medicare members. The idea is that the patient would know what the drug costs before they go to the pharmacy to fill it. Eliminating cost sharing for generic drugs for Part D members.

American Patient First impact on Indiana:
Indiana could see prescription drug prices drop but because the PBM’S are no longer retaining the manufactures discount. With the UHC drug program, Hoosier could start to see savings Jan. 1st, 2019. If the Blueprint immediately allows Part D provider to be negative with drug manufacturers, there could be immediate savings for Medicare members. Most of the blueprint is addressing Medicare issues, in the hope it would cross over to the private markets.

With any new regulations, there is always criticism of not doing enough, doing too much, negative impacts to vested parties, this Blueprint was written in manor of having the greatest impact on pricing with the least amount of government regulation. It will be interesting to see if this style of regulation yields positive results.

Tony Nefouse

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Tony Nefouse’s Complete Guide to Group Insurance: Obtaining A Quote

by Anthony Nefouse in Group Health, News

indiana group insuranceObtaining proposals for group insurance benefits can be relatively easy. There are multiple outlets for receiving bids. Most of the insurance companies have now set up in-house sales; this allows groups to go direct to the carrier to obtain a proposal. Some payroll companies have broker divisions in which they can provide suggestions. The best option is to use a broker like Nefouse & Associates.

Going Direct to Insurance Company:
There is a myth that if you go direct, your cost will be lower, this is not true as the insurance company will charge the same amount if you an agent or not. Going direct will receive rates and plans designs only from that company. Going direct may also lead to receiving plans designs that the carrier wishes to promote. Then there is the other side where they send all 50 plan options; let’s be honest: who wants to review 50 different plan designs?

Payroll Companies Health Quotes:
Today a lot of payroll companies have group health divisions, and so they are actively selling employee benefits. The ones that are active with group insurance also have a professional employer organization (PEO) option. The PEO plan can be an insurance product built by the payroll company. They usually will have a relationship with UnitedHealthcare or Aetna which will allow them to quote their products. These companies usually have an insurance department in another state with few ties locally. This may not be an issue until a higher level of customer service is needed. The other issue to be aware of, are fees associated with the health plan from the payroll company. These fees can be as high as $1,250 an employee which can devalue the benefits.

Insurance Brokers
The best outlet for obtaining quotes is through a broker. Agencies can quickly generate a proposal for all lines of insurance benefits. A seasoned broker can determine which companies are going to be completive. Not all agencies are the same, many agencies will not quote small groups. It’s not they don’t want to help companies, but they have limited human resources. There are only a few agencies like Nefouse & Associates in the state of Indiana. Brokers that can provide relevant insurance knowledge to all phases of the business cycle.

Ready to get quotes:
To obtain a group health insurance, you will have to provide a company census. This is a list of the full-time employees, names, birthdates, zip codes. You will also need to dependent birthdays if they are interested in coming on the plan. If you want disability proposal, add job titles and salaries. If you have current benefits in place, you will be asked for a copy of your current plan and rates. Some owners especially ones that come from a business that must bid on contracts frown is releasing their current information. On large groups, insurance companies will not release a quote unless they have a copy of your current plan.

If you are looking to offer group benefits for the first time, you will need to survey your employees if they want coverage. Remember, if you are not offering benefits current employees may have little to no value in them. It’s extremely important not to promise benefits to your employees, use terms like we are exploring the options. There are multiple steps in putting group benefits in place, sometimes not all those steps can be met, which leads to no benefit offering, which can create a negative situation with employees if they were promised benefits.

Now you know you are eligible for group benefits, you have surveyed your employees, put together current coverage, generated a census, and now you’re ready to go out to market, contact Nefouse & Associates.

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Tony Nefouse’s Complete Guide to Group Insurance

by Anthony Nefouse in Explanations, FAQS, Group Health, News

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.

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Indiana Association Health Plans (AHPs)

by Anthony Nefouse in News, Uncategorized

Association Health Plan is where members can purchase health insurance that is specifically designed for that organization.  

At the end of 2017, President Trump issued an executive order that would allow for group of people to purchase associations health plans that are not required to cover the essential health benefits (EHBs) of the affordable care act (ACA).  The proposed rule would broaden the criteria for determining which employers can band together to form AHPs.

Eligible Employers

The proposal rule would allow employer to join to form an AHP that is considered a single ERISA plan.

  1. The employers are in the same trade, industry, or profession
  2. The employer has a principal place of business within a region that does not exceed boundaries of the same state or metropolitan area.
  3. The rule would allow working owners sole proprietors and other self-employer individuals join the AHPs.

Critics of the proposed rule have concerns that the AHP will have a negative impact on existing ACA small group and Individual markets. Their concern is valid as most employers would look for a better deal than what the ACA group plans offer.  What the so-called critics don’t understand, is these groups are already flocking to non-ACA plan through the self-funded market. Indiana small group with just five participating employees are eligible for a self-funded plan which can have a 30% savings against a ACA small group.    As for the individual markets, those blocks of business are already in a death spiral with rates skyrocketing every year.

 

Additional Requirements:

The AHPs would require members to meet some of the following conditions.

  1. The group or association has a formal organization structure with governing body and bylaws.
  2. The group or association exists for the purpose in whole or in part for sponsoring a group health plan that is offered to its members.
  3. The group or association’s members employers control its functions and activities, including the establishment and maintenance of the group health plan.
  4. Only employee of the employers may participate in the group health plan which is sponsored by the association.

The AHPs would have to comply with certain nondiscrimination requirements.  These set of rules would prevent AHP’s from restricting membership based on health factors.

Indiana has seen it’s fair share of AHPs over the years prior to the Affordable Care Act.  The current association plans have concerns over the new rules as it may impact them negatively.  The biggest concerns are medical underwriting or health discrimination. If the new rules do not allow AHPs to underwrite then they lose the most effective cost containment tool.  Then we could see the current associations, unless grandfathered in, fall into adverse selection or death spiral. Then once again we can witness the power of the government when it comes to healthcare reform.

Brining an AHPs health plan to market has huge barriers to entry. Usually the highest health utilizers are the ones that want to create the AHPs. With starting a small AHP’s it only takes a few large claimants to prevent the success.  Most insurance companies will want to underwrite the risk, without claims data it is almost impossible to get receive competitive pricing.

One of the rules on for AHPs is that an insurance company cannot sponsor the health plan. This can be interpreted a lot of ways, but this prevents a carrier from developing a template type association health plan. The association, consultant, broker would be the ones to develop the health plan.   This could create opportunities for a broker like Nefouse & Associates to develop an AHPs for Indiana.

Once there is more clarification of AHP’s rules and regulations, we could see an new health insurance option become available.    

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Pharmacy Benefit Management News

by Anthony Nefouse in HSA, News

Pharmacy Benefit Management News UnitedHealthcare PBM Optum, is launching a new program that should have a positive impact on UHC fully insured membership.
One of the biggest frustrations to insured individuals on health saving accounts (H.S.A) or high deductible plans, has been filling prescription drugs. On a H.S.A. plan, prescriptions will apply towards the deductible and members have seen little or no discount on filling those medications. The frustration comes when one using the many RX discount programs and they realize the savings vs. the health insurance company.

The cost of a drug may have a retail value of $220 and with the health insurance companies discount, the member may pay $200, but the third-party discount program brings the cost down to $80. Insured individuals on H.S.A programs have been extremely frustrated with this.

Most likely, the insurance company, pharmacy benefit manager or both have been retaining that discount. It’s extremely doubtful large companies like UHC, Anthem, Cigna, Express scripts have negotiated less favorable drug discounts over companies like GoodRX. In all probability the large companies have been retaining all of the manufactures discounts.

UnitedHealthcare would start sharing those pharmacy discounts with its full insured members starting 2019. This new program will impact over 7 million people currently insured with UHC. No longer will UHC member on high deductible plans have to use third party RX discount programs. UHC is also going to streamline cost transparency by providing members with access to true prescription drug pricing after the discount.

With the new drug discount program, members on H.S.A’s will see an immediate savings. What remains to be seen is what impact the savings will have on traditional copay plans.

Here’s an example: if the prescription falls on a $30 copay, the member would be responsible for that amount at the point of sale but what if the manufactures discount brings the actual cost of the drug below $30, the member should retain that savings.

The UHC new drug program may be viewed as being a preemptive move to future government regulation or a program to create brand loyalty.
As UHC new was released, there was more PBM news with Cigna buying Express Scripts for $52 Billion. Which is following trend with the other big health insurance companies. December of 2017, CVA agreed to by Aetna for $69 Billion. This mega merger may have started the trend of carriers finding value in owning their own PBM.

Indiana’s Anthem had stated that they were breaking away from Express Scripts and moving to CVS. After the CVS & Aetna buy out was released, now Anthem is building their own PBM called IngenioRX which is suppose to launch in 2020.

UHC already owns their PBM Optum RX. Aetna is going to be owned by CVS. Cigna is going to own Express Scripts and Anthem will build IngenioRX.
With UHC releasing their new RX member discount program, it will be very difficult for the other insurance companies not to follow suit. The mega mergers could lead to lower RX prices, now the drug manufactures are selling to PBM’s that have large amounts of healthcare data to back up price negotiations. The power of these companies to control prescription drug pricing would be huge. One would hope that the recent price increase of medications for no other reason than the manufacturer can would stop. The fear is the insurance companies with their PBM’s would retain all the Rx savings for themselves and ultimately the American people/businesses would be burden with cost.

We can only hope these companies practice the saying “With Great Power Comes Great Responsibility”.

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Indiana Challenging the Affordable Care Act

by Anthony Nefouse in Affordable Care Act, News

Indiana Challenging the Affordable Care Act

Indiana has joined 19 other states in a coalition to challenge the constitutionality of the Affordable Care Act (ACA).   The suit was filed in federal court in Texas and is led by Texas and Wisconsin.

December 2017 the tax bill was signed into law which eliminated the individual mandates financial penalties staring in 2019. Without the tax penalty, it is being argued that the ACA will fail.

The reality is the ACA has already failed from controlling health care cost and health insurance premiums. The ACA did accomplish one of it’s goals by expanding Medicaid coverage, where Indiana has seen HIP 2.0 go from 60 members to over 400K.

The Indiana health insurance market has transformed under the ACA. The Individual market has two insurance companies offering coverage. (Caresource & Ambetter) The medical community has already started to limit the amount of patient from these providers. This has caused serious disruption in care for Hoosiers in need of a high level of medical services.

We have witnessed most carriers withdraw from the Indiana individual and small group markets. Humana, UnitedHealthcare, IU, MDwise, Assurant, & Anthem have all exited the individual markets. These companies had large losses in the individual market and had challenges working with the government. Under the Obama administration, there was a huge reluctance to admit the ACA had any problems. There was also an inconsistency in the interpretations of the rules of the ACA. Under the Trump administration, it was made clear the failures of the ACA were beyond repair.

The ACA is already in a death spiral that is called adverse selection. The ACA failed to control the cost of care through multiple ideas like the Accountable Care Organizations (ACO). There was also a failure to deliver the original estimated amounts of members to the insurance pools. The unintended consequences of the Medicaid expansion, was one of the leading reason of lack of enrollments. Indiana is a perfect example, it was ordinally predict that we would have 900K Hoosiers insured through the marketplace. 2017 enrollment numbers, were less than 160K and to make matter worse, half of those members would drop off by mid-year. Medicaid & Chip membership is over 1.4 million for Indiana which has had a huge impact on market place enrollments. When Insurance companies developed products based on a pool of 900K and the reality was just 18% of that, it led to large insurance losses.

Unless you are receiving Medicaid benefits, the ACA has failed. It will be interesting to see if the law is overturned. If the law is not overturned, Indiana along with 20 other states, will see health insurance products that are offered that do not meet the requirements of the ACA.

Recently, we have seen the development of short term health insurance that offers a 12-month term. These policies do not meet that ACA requirements and can result in a tax penalty. Here is the reality, the short-term policy cost 65% less than an ACA policy. If your income is over the 400% of Federal Poverty Level and you don’t receive tax credits, on a family of four that could represent a saving of $10K a year. The tax penalty could be 2.5% of household income, which could result in a $9,000 penalty. If you are healthy and willing to take risk, this insurance solution could appeal to you.

For 2019, the tax penalty will be removed, there will be a huge migration to the short-term policy market. With no tax penalty, saving $10K will appeal to most middle-class families. This will have a huge negative impact on the ACA market because this will represent the low risk members exiting the marketing and will result in high premiums. (Adverse Selection). 2018 is really the last year for the ACA in the current form.

The small group health markets have also seen the development of group health plans outside of the ACA. These are the partially self-funded or full funded group health plans. These are plans that underwrite for ongoing health conditions. They have started to pick up tracking in 2018. This will have adverse impact on the small group ACA rates. Again, the good risk is leaving the pool.

The 20 states that are challenging the ACA may be correct in doing so. For the Hoosiers/employers that pay the full cost of the premiums, something must change, or this segment of the population will go uninsured. For the Hoosiers that are receiving Medicaid or assistance with health insurance, these programs need to continue. Otherwise this segment of the population will go uninsured.

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