Over the last three years, Unum , Guardian, MetLife, Allianz and now Prudential have all exited the Individual Long Term Care market. There looks to be a real possibility that this market will cease to exist.  Insurance companies are unable to predict the long term cost of assisted living. They claim they are unable to make enough interest off of premiums to fund long term care cost.


In the last few years Individual Long Term Care policies locally and the rest of the country have sky rocketed in cost. This makes for an interesting situation. On one hand the truly wealthy are able to self fund their long term cost. The poor and lower middle class will deplete assets so that they can qualify for Medicaid long term care coverage.  So that leaves the middle and upper middle class with the burden.  


With the middle class there is a good chance of adverse selection happening which will create a death spiral for the LTC policies. An adverse selection is when the high utilization people take a policy and the healthy do not.  When this occurs you have a death spiral or when the market is not longer viable.


It looks like the Individual Long Term Care market is already in a death spiral. When you all ready have 5 major players in the market pull out that is not a good sign.


Consumers might want to consider picking up a policy now while there is still a market for it. Even a base plan with basic coverage can be a key component to helping with long term costs.


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This map gives an idea where each state stands on setting up a health insurance exchange. The majority of states have taken grants to establish a state based exchange. The states have positions themselves to set up the insurance market.  Some states have taken grants to research a stat based exchange. They are looking at what it would take to run a successful exchange.  Two states have declined setting up a state based exchange. These states could have made the decision based on the eventually cost of exchange is going to have on the state. Two states currently have a state based exchange in operation. Massachusetts & Utah are the only states to have an actual track record of operating a state based exchange. Massachusetts has some of the highest health insurance cost in the country. They have also encountered law suits from different hospitals over reimbursement rates. Utah’s exchange is more of a free market exchange and a blue print to what some state would base a state based exchange off of. Utah has had problems with the exchange being competitive and efficient. They have a much lower group participation rate in the exchange than expected. 

Most state have put on hold any further development of a state based exchange until the supreme court has a ruling on the health care law. Indiana is no different.

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WASHINGTON - OCTOBER 08:  U.S. Supreme Court A...

Today starts the first day of the debate on health care reform. It will be very interesting to see how the supreme court rules in the next 3 days.


Fox News reported on what a fine line the administration’s argument is on. Not having health insurance cause to get a penalty or a tax? The administration’s attorney had a difficult time distinguishing either or.


Supreme Court Health Care Law Here is the transcript of day 1.




In day 2 there was emphasis from the justices on three significant constitutional areas to determine if the ACA is lawful. The Commerce Clause, the Necessary and Proper Clause and the federal government’s taxing power.


The government made the case that the law was “classic economic regulation of economic conduct” That all people at some point must purchase or use health care. The government also pointed out economic problems of sustaining the current system.


The plaintiffs were more focused on the individual level and if Congress can regulate activity or in this case inactivity. They argued the Federal government does not have the constitutional authority to force people into a marketplace by making them buy a product. This line of argument about unchecked authority gives concern that the Government could mandate the purchase of any product they want.

The 3rd day of arguments was what to do if the individual mandate was deemed unconstitutional.  Since the individual mandate is the key component of the ACA without it could bankrupt every health insurance company.  The justices ask many questions and the Government stated that without the individual mandate guaranteed issue would have to be removed from the law. The plaintiffs said that entire law should be struck down.  The supreme court could not go through the entire law and decide was stays and what goes. This would be a form of judicial activism and the court really does not want to go through 2,000+ pages of the law. They even called it cruel and unusual punishment if they had to do that.

It is being predicted that in June of 2012 the supreme court will decide the fate of the health care reform passed by the Obama administration.

Official 2007 portrait of U.S. Supreme Court A...


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$1.76 Trillion for Obamacare

The CBO released the cost of the Health Care Reform for the next 10 years. The congressional Budget office originally projected the cost of the reform at $940 Billion for 10 years. Now the CBO is projecting $1.76 Trillion for the next 10 years. Then in 2022 with another $265 billion for coverage expansions it is estimated the cost could be $ Trillion.

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English: Kathleen Sebelius speaking after her ...

Senator Johnson Questions Secretary Sebelius Regarding Obamacare Cost

Here is a questing  from Senator Johnson to Secretary Sebelius on the cost of the health care reform.

The Senator has some of his facts mixed up and the Secretary seems to be unprepared for the questioning.

The Senator was using cost estimate and predictions that had different time frames. Some numbers were for 10 years and others were for 20 years.

The Secretary seem unprepared to answers or address any of these facts/estimates.

This is a snap shot on how complicated the health care reform law is.

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English: U.S. Health Insurance Status (Under 65)

The department of Health and Human Services has release a 644 page document on the rules for a state based exchange.  This document is going to have a huge impact on health insurance and health care.  At this point no one really has an idea of how a state based exchange is going to look and operate.

If a state can not meet these rules then the federal government’s exchange will operate in the state. There has been very little information on how a federal exchange will look. We do know that the current administration has asked for $800 million a year to administer the federal exchange.


The Exchange final rule includes standards for:

The  establishment and operation of an Exchange

Health insurance plans that participate in an Exchange

Determinations of an individual’s eligibility to enroll in Exchange health plans and in insurance affordability programs

Enrollment in health plans through Exchanges

Employer eligibility for and participation in the Small Business Health Options Program (SHOP)

HHS Exchange Rules

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US truck - California 2007
Long Ways to Go Short Time to get There

Indianapolis small trucking companies can face difficulties providing a group health insurance. There is variety of reason why this is. The biggest obstacle is participation. Many truck drivers will not pay large portions of their premium. This industry can sometimes have higher claims utilization than which lead to higher premiums. The higher premium then will reduce the participation in a company sponsored health plan.

There are a few ways to overcome the participation issue.

The first one is for the employer to pay the majority of the premium.  I know that might not be a feasible option but there are plan designs to offset the cost. Why not entertain a multi choice or dual option plan. The base plan would be the plan that employer pays the largest percentage of. Then buy up option for any employee that would like richer benefits.

A group health plan for a trucking company is an investment into the employees. So why not treat it that way.  If you are able to recruit the best drivers with the lowest infraction why not reward them with benefits.  These divers are making your company successful which increase the companies rating which could lead to more jobs.  Why not pay the majority of their premiums? View the health insurance plan as a way to recruit and retain the best drivers.

There is other option available other than these two.

Contact us and let’s have a conversation.

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IBJ reported that Franciscan St. Francis Health plan to build an Emergency room and physician office building is on hold in Greenwood.

“This is a result of concerns about the changing environment related to  National healthcare reform” The CEO of the hospital was reported saying.

The hospital official stated that they have a real concern over reimbursement rates with Medicare and private health insurers like Wellpoint.

We are now seeing the beginning affects of healthcare reform with uncertainty. What makes this even more concerning is that Franciscan was the only local hospital to participate in the Accountable Care Organization initiative.  The ACO model is under the health care reform law where hospitals are paid on performance.  It would be interesting to know what conclusions St. Francis have about the ACO model.

A hospital delaying construction is just the tip of the iceberg when it comes to Health Care Reform.  Think about all the research of health care that has been put on hold because of the new law.

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Washington DC - Capitol Hill: United States Ca...
Washington DC – Capitol Hill: United States Capitol – East front (Photo credit: wallyg)

The department of health and Human Services released guidance on two key components that will affect the level of protection a private insurance policy will provide under health care reform.

1st  Involves the services the insurance policy must cover

2nd  Involves how much the insured must pay for out of pocket services.

The services that must be covered are called the Essential Benefits.

10 categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.

Originally HHS was supposed to specify these benefits Instead they have left it up to each state to decide. They have offered guidance which allows flexibility on how a state defines what has to be covered.  The federal Government is using “Actuarial Value” to determine the plan overages.

An example of Actuarial Value, is a plan with an actuarial value of 70% would be expected to cover on average 70% of health care expenses, with enrollees paying the remaining 30% through some combination of deductibles, copays, and coinsurance.

The Federal Guidance indicates that the actuarial values will be determined by a standard calculator developed by the Federal government.

There can be a wide variation in plan designs that have the same actuarial value.  This gives some hope to Indianapolis resident about having plan choice under health care reform.

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Smartphone Configuration for Social Media Mark...Health4Me App


Unitedhealthcare is one of the leading health insurance carriers when it comes to technology. They are not always user friendly but this Smart Phone App is really cool.


As you know the words cool usually are not in the same sentence as health insurance.


This app is to help families track their health care. With health plans shifting more up front cost onto the insured these kind of tools can be very effective in tacking and budgeting for health expenses.


Right now there are few smart phone apps associated with health insurance. These type of apps are not for everyone but if you want to take control of your health care dollars this is good starting point.

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