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start upWhen a startup company launches, one of the last issues that is addressed is Group Health Insurance & employee benefits. The founders of the startup company, may have years of experience in their industry or are on the cutting edge of new technology. When it comes to Indiana Group Health Insurance, leadership may lack experience. If they are coming from a large company, employee benefits may have been a topic handled by another department.

These new entrepreneurs, are now faced with placing Group Health Insurance plans in place, to attract and retain employees.

Indiana Group Health Insurance Carriers:

In the small group market, there are not a lot of insurance companies offering coverage in Indiana. The main 2 carriers are Anthem & UnitedHealthcare. There are regional companies like IU Health offering plans. Then you have carriers that are offering self-funded plans for small group. The size and nature of your Indianapolis company, can determine which carrier may be the best solution.

Indiana Networks

Each carrier has a different network and some carriers offer multiple networks. Most common is the Preferred Provider Organization (PPO). The PPO is going to allow for the greatest access to medical providers. A member can have a general doctor in one medical group, a specialist in another & then a pediatrician in another. Most PPO’s also have a national network, which may be the only option for companies with out of state employees. The PPO is also effective if there are employees that are commuting from rural communities. In Indiana, Anthem has one of the best PPO for small companies. Unitedhealthcare also offers a well-accepted PPO plan.

Indiana Group Health Insurance Plan Types

Exclusive Provider Organization (EPO)

Not as common in small Group Health Insurance is the EPO network. The best way to describe an EPO, is it’s a large accepted network, may even be national, but it does not offer coverage out of network. The plan may offer access to all of your providers & specialists in Indiana. Where it does not offer access is if you wanted to go to a specialist in a hospital for treatment. A good example, would be having access to a drug treatment center out of state. It can be viewed that medical groups that will not discount their rates are not included in the EPO.

Health Maintenance Organization (HMO)

The HMO network has had limited access (no pun intended) in the Indiana small group market. Currently, IU Health plans may be the only option for a true HMO. If your company & employees are located near the HMO medical providers, this can be a good solution. With most HMOs, members have to choose a primary care physician (PCP). That PCP should have a closer relationship with that member, which creates a more knowledgeable PCP with the patient’s situation. That knowledge is supposed to create better treatment plans and general oversight with any specialist services.

Navigate/Gate Keeper

With traditional HMO plans now EPO plans offer/force a navigator or gate keeper on the member. The Navigator/gate keeper is the first point of service to the member. These plans go as far as listing the medical provider on the insurance card. If a member does not go through the navigator, the claim is not covered. This option can be effective if the insured is forced to have that PCP get to know them. At first, employees can be annoyed with having to elect a gatekeeper. Once they search the network, they maybe be surprised that their doctor is participating in the network. These networks allow for the employee to easily change their navigator/gatekeeper. Unitedhealthcare is one of the few Indiana carriers that offer a navigate plan on their EPO. Would could see this become a more common option.

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No Network/Indemnity Product:

A no network plan/indemnity is a health insurance plan that does not use a provider network. This means there is no pre negotiated price on medical procedures. These plans, use Medicare reimbursement rates as the bench mark for medical costs. Then they will add 50%-100% on top of the Medicare reimbursement rate. The insurance company/ third party admin will contact the medical provider after the claim is submitted. They then try to negotiate the reimbursement rate. In Indiana, the major medical groups have had issues with this type of reimbursement. They even have gone as far as to refuse to treat members on this type of insurance. This option is usually provided by a self-funded or level funded plan. Since medical providers refuse to accept these types of plans, this may not be the best option for a small group.

medicalGroup Health Plan Design:

The plan design will have a huge impact on cost and the value the employees place on the benefit. Ownership/leaderships health insurance philosophy can determine which plan design is elected.

Major Medical

The employer puts in a high deductible health plan (HDHP). The plan could have a $6,500 deductible and all claims go towards the deductible, once met then 100% coverage. The philosophy is the plan is here to cover you for major services.

Health Savings Account (H.S.A)

Plan design has a HDHP with a savings account that has tax advantages. Deductibles and out of pockets can range from $2,500-$6,500. Average H.S.A deductible is around $3,500, which is considered to be a rich benefit, even though the deductible has to meet first.

Traditional Co Pay Plan

Traditional group plans have co pays for office visits and prescription drugs. This is a first dollar benefit, you have an office visit and pay $35 for the medical service. Depending on employee’s situation, this plan can be a more acceptable insurance offering. If an insured is prescribed a medication, they may only have to pay RX copay, which can be more affordable vs. picking up the entire cost as it’s applied to HDHP plan.

High Deductible with Co pays:

This would be a combination of the traditional with first dollar benefit. The view is the plan is going to cover your office visits and prescriptions, but surgeries are going to go toward a high deductible. We see this option with groups that really don’t want to offer a group health plan, but have to keep current employees.

Multi Choice

This option allows an employer to offer multiple plan designs, then the employee can choose the plan that best fits their needs. There may be a base plan offering with a buy up option to richer benefits. With most carriers (Anthem), the company needs at least 10 employees taking coverage to offer a dual option. Unitedhealthcare, will allow a company to elect as many plans as they want with no employee requirement.

Group Health Insurance Cost:

In fully insured small group, premium is determined by ages of the employees and plan design. Under the Affordable Care Act, there is no underwriting for small groups.The average of age of the employees has the biggest impact on cost. Plan design would be 2nd and PPO, EPO, HMO, Navigate would be 3rd. On a level funded/Self-Funded plan, the case would go through underwriting. The employees would answer medical questions, then a group risk factor would be determined by ongoing health conditions.

Employer Cost:

moneyUnder most insurance contracts, the employers is required to pay at least 50% of the employee only Starts ups that are well funded, are picking up 75% on average of the total costs, which includes employee and dependents. Not all startup companies in Indiana, are in a position of being able to pick up 75% of the entire cost of the Group Health Insurance plan. Employer contribution can be guided by the industry and what type of employees the company is looking to attract. To attract employees from large companies, benefits can be a huge issue. With any new start up, the cost of a Group Health Insurance plan may not have been addressed with correct data during the business planning. Under the ACA in Indiana, the average cost for employee only is around $500 a month, a family is around $1,500 a month. For any start up to be successful, an investment into the group health is a must.

Group Dental

With any employee benefit package, group dental is important line of insurance coverage. Employees want to get their teeth cleaned at no cost to them. The majority of dental plans will offer 100% coverage for preventive care. For most small group dental plans, the employer need to contribute toward the premium. If the plan is set up as voluntary meeting the participation requirements can be difficult. When choosing a dental plan, you may find better coverage at a competitive price using a carrier outside the health plan. With smaller companies, it’s easier to bundle the dental coverage through the health insurance carrier.

Group Vision

A group vision policy is a nice benefit for employees as more and more people are wearing glasses. Maybe there is correlation with staring at screens and the need for vision services. Vision insurance usually provides a copay for an examination and materials. Group vision usually offers richer benefits than what can be purchased in the individual market.

Group Life

Life insurance can be one of the least expensive benefits a company can offer. A company can offer $100K in life insurance for about $20 per employee per month. For a startup company to offer this level of benefit can have a huge value towards employees.

Long Term & Short Term Disability

Offering disability insurance really is determined by the industry and employee compensation. If the startup company is recruiting higher income employees, long term disability may be essential to an employee benefit offering. With a startup, getting disability coverage may be difficult until the company has been established for 2 years. There are carriers that will offer a disability plan to a 1st year company. This benefit is usually 100% employer paid. As for short term disability, this benefit can be added with the Long Term.

Supplemental/Work Site Coverage

With small group, voluntary products can be added through supplemental policies. These policies can reduce the health insurance deductible and out of pocket. With any voluntary product, it’s completely up to the employees if they want the coverage, they are responsible for the cost. The one benefit is some of the policy premiums can be paid pretax. The supplemental policies should be tailored to the Group Health Insurance plan. Minimum participation is usually just 2 employees electing the coverage.

Benefit Platform

Being a startup, you may not have the staff to allocate to the benefit administration. A benefit platform can significantly reduce the time spent on the employee benefits. The platform will aide with employee enrollment & changes. Reduce paper application and include all the benefits in one place for the employee to access the information. Then to add reporting features for HR, which can be used with premium reconciliation or educating the employee on total compensation. With the advancement of technology, the new benefit platforms can also be used for employee onboarding. Many of the system come at a price to the employer, with Nefouse & Associates we provide this platform as one of our services at no cost to our clients.

Indiana Group Health Insurance Benefits Tips

When a small company is ready to put benefits in place, all of these options can be overwhelming. Determining what benefit package is going to work best for your company starts with choosing the right broker. A good broker can advise what health insurance design is going to work best for your organization. There is a fine balance between cost and benefit design. What works in one industry may not work in another. Nefouse & Associates has worked with startup companies for over 30 years. The benefits that you put in place the 1st year, will change over the year. When a company first launches, they may be a micro company with less than 10 employees. As a company grows, the health insurance and benefit philosophy may need to change. That change can be forced by cost or industry trends. We have witnessed this business life cycle over & over. Having the experience to successful consultant our clients from startup to going public is quality few Insurance brokers have. We pride ourselves on being one of the last insurance agencies that can help companies of all sizes. Contact us today!

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pexels-photo-48603Anthem announced that they would exit in the Indiana individual market in 2018. They are pulling all on exchange plans and will offer one off exchange plan in five counties. (Benton, Newton, White, Jasper & Warren)

It is estimated that Anthem insures 46,000 Hoosiers on the exchange and about 20,000 off exchange. This decision to not offer plans in 2018 is going to have a huge impact on these members. These Hoosiers may have fewer options for coverage and some may have no options now.

Why Would Anthem Withdraw?

For on exchange, it has been a challenge dealing with the government. This includes both administrations. There has been a continuous cycle of change with operations, rules and guidance. The lack of payment, for the cost sharing reductions is a major issue. Another issue may be the overall risk that the current individual block represents. In the last 2 years, Anthem has been the highest priced plan. If they cost the most, it’s difficult to attract low risk members. They could have been experiencing adverse selection.

Anthem will offer one off exchange plan in Benton, White, Jasper, Newton and Warren Counties.

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551px-Ohio_Counties_Labeled_White.svgAs of June 6th, Anthem announced they are exiting the Ohio individual exchange market. They are going to offer just one off exchange plan and that will be in Pike County. Pike County, Ohio, has a population of less than 30,000, so this is really a complete exit from Ohio.

Anthem was one of the only Ohio carriers to offer Individual plans throughout Ohio. Which is interesting because Ohio has 2 insurance companies that have corporate headquarters there.

Caresource is in Dayton Ohio.

Medical Mutual of Ohio is in Cleveland.

If these 2 companies are not offering Individual plans throughout the state, the question is why?

Simple answer, the individual market in Ohio, under the ACA, is high risk which results in high claimants which ends with carrier losses. When Individual carriers are seeking to make a 4% profit margin and they can’t reach that goal, they must reduce their exposure.

Then we add in the uncertainty of the cost sharing reductions being paid by the Government, why would a carrier take on any additional risk.

At this point, I can’t blame the carriers for making decisions to exit the individual market. I don’t like it but I understand it.

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CMS announced on May 15th that they would end the Small Business Health Options (SHOP) program, effectively on November 15th 2017.

The SHOP program allowed small business to purchase group health insurance through the Federal Facilitated Exchange. The goal, was to allow small business to offer multiple plan design and received a tax credit for a portion of the employer contribution.

The program never met its goals in Indiana or the rest of the country.  The architects of the SHOP did not understand the small group market.

1st.  Small groups providers did not have the technology for integrating multiple carriers, nor were there multiple carriers to offer.

2nd.  The enrollment process through the marketplace, was extremely frustrating to both employer and employee.

3rd. The exchange plans being offered, had less network access than group plans off the exchange.

4th. Employer tax credits, were based on the average income of the company. This devalued the tax company tax credit.

5th. For companies that have low wage employees, they were better off not offering a group health plan. Then those employees could get on Medicaid or were highly subsidized on the marketplace.

For Indiana, we had less than 100 companies elect coverage through SHOP. Nationwide there was less than 30K.

We were one of the first agencies to be certified to offer the SHOP plans in Indiana. Having quoted multiple small companies on the SHOP, there was little to no value with that option. It was a good idea.

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downloadOur Indiana Health Insurance Company Talks about the American Health Care Act Bill

A lot of commentators, journalists & health care experts are voicing their views on the American Health Care Act. The reality is, the changes the senate are going to make will determine the true impact to health coverage.

The supporters of the Obamacare, are giving little support to any ideas of new healthcare reform. The biggest impact of Obamacare has been the expansion of Medicaid. Here in Indiana, we now have close to 500,000 people on the HIP 2.0.  We have less than 170,000 on exchange plans.

The AHCA will change how Medicaid is funded and slowly remove the expansion as we know it. This will force medical providers to change their fee structure. This may be an underlying goal to move the country away from a fee for service health care model.

There are a lot of views on who wins and who loses under the AHCA.

If you purchase individual health insurance (without subsidies) you can’t lose. Current market conditions under the ACA are imploding. Premiums are at an all-time high, along with out of pockets. Then we add the lack of network access. There will not be an individual market in 2018 without reform.

If no individual plans exist or just one, anything will be better than Obamacare.

The predicted losers would have to be the poor. If Medicaid expansion is eventually phased out, what will happen to this segment of the population. State officials and leaders will have access to federal grants. These federal dollars can be used to reach health care goals of helping the working poor. Every state leader is going to have to work towards compromise to put a solution in place. The health care providers will have to be open to compromise.

Employers will win, they will no longer be required to provide all the reporting requirements under the ACA. Companies have allocated huge amount of resources to be compliant under the ACA. New industries have been created to provide the administration needed.

Group health plans will go down in cost. Right off the bat, we will see the taxes from the ACA removed. That is almost 5% of the cost.

No more employer mandate will be in effect. The employer mandate devastated certain industries. Those industries, had never built their business model on providing health benefits.

To sum up the current bill, the poor will need state leadership to redevelop programs of health care. Federal dollars will be available to them.

The middle class and above, will have more options in plan choices, less government requirements, great plan designs, carrier competition, which will lower premiums.

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medicine, age, health care and people concept - senior woman, man and doctor with tablet pc computer at hospital ward

The new health care reform bill, (American Health Care Act (AHCA)) was just introduced. Eventually we should see analysis of the bill and potential impacts on the health care & health insurance markets. Here are our views on the how the bill may impact Hoosiers.

Indiana Health Insurance Company Tips for Hoosiers

The repeal of the ACA actuarial values for health plans: This will allow for health insurance companies to have more flexibility with plan design, thus it could reduce premiums. It would also create a variety of health insurance plan options in the market.

Increase Tax Credits for 2018 & 2019: Young & old would receive larger tax credits to offset premiums. These tax credits would apply towards off exchange health plans. This is an attempt to stabilize the current individual markets and would have a positive impact on Hoosiers.

Retain Guaranteed Issue: No one can be denied for pre-existing conditions.

Retain coverage under parents plan to age 26: Modify age bands for premium determination: This would allow cost for oldest to youngest to be moved from 3x to 5x. For Hoosiers in their 20’s, this would lower the cost and may increase enrollment. This could help stabilize the market by adding healthy members to the pool.

Keep current open enrollments and special enrollment guide lines: Everyone would obtain health insurance in December, for the following year. This does put a strain on all parties involved. You have 7% of insured populations applying for coverage at the same time. For Special Enrollment Periods (SEP), you will have to provide documentation before being enrolled in a plan. Hoosiers and the rest of country have been able to game the ACA, by getting medical services prior to proving the SEP. This has led to higher premiums.

Impose late Enrollee penalty: If you have not had continuous coverage, not paying into the system, you will be charged a penalty. This will force Hoosiers to maintain continuous coverage. Trust me when I say, there will be a huge learning curve on this issue. The bill states there would be a 30% increase cost penalty if you go without coverage for more than 63 days. That penalty would be applied for a 12 month period. If you look at current premiums, that would be a huge, unaffordable penalty for most Hoosiers. Here is some grey area, the bill states Medicaid companies are not required to provide a certificate of prior coverage, insurance companies are. This could lead to a penalty being imposed for a Hoosier coming off of Medicaid.

Create a State Grant Program: States would be eligible for block grants and that money could be used for health care goals. Examples may be creating cost sharing reductions for at risk Hoosiers. Innovative disease management programs. Every state would be challenged to create health care reform programs to better serve their residents.

Promote Health Saving Accounts: Give more tax incentives for Hoosiers to purchase these plans. This will help Indiana middle class and upper middle class. Under that ACA, this segment of the market has been negatively impacted by cost.

Change Medicaid expansion & funding: Essentially end the Medicaid expansion by 2020, which would have a huge impact on Hoosiers making 138% of federal poverty level. Right HIP 2.0 is insuring around 400,000 Hoosiers. In my experience, these people cannot afford health insurance premiums over $50 a month, nor out of pocket maxes.   Indiana would have a challenge to obtain federal grant money to provide health insurance to these folks.  The bill would change Medicaid funding to per capital basis. Indiana would have to change it’s current program to be more cost efficient. To do that, there may have to be the development of more narrow networks and lower reimbursement to Medicaid providers.

The repeal of the ACA taxes: This should help to lower insurance premiums and reduce the tax burden on durable medical manufactures. Companies that manufacture medical equipment should free up resources to invest back in their business. We doubt the tax relief would have an impact on what is charged, but if a company could open a new plant more employees create more competition, which could be a good thing.

Cut federal funding to Planned Parenthood: Not sure how many Hoosiers are receiving services from Planned Parenthood, obviously that origination ability to operate would be severely impacted.

Tax Credit Determination: The new system would be based on income and age. The tax credit would be a set amount.

  • $2,000 per individual up to age 29 for income up to $75k on single, then phased out to $95k.
  • $2,500 per individual age 30-39
  • $3,000 per individual age 40-49
  • $3,500 per individual age 50-59
  • $4,000 per individual age 60 and older For income up to $115k and phased out at $150K

Families can claim credits for up to 5 oldest members, up to limit of $14,000 per year. Income would determine the eligibility and amount.

The tax credits could be applied to short term policies, on and off exchange and Cobra premiums. There is mention to apply the credit towards small companies with non-group health products. The tax credit would be reduced, but still eligible. This could have a large impact on small Indiana companies offering group health.

Excess tax credits: If you don’t use the entire tax credit, you could place the remainder in health saving account. Assuming individual premium are reduced, this could be a huge benefit.

There will be changes to the current bill, just announced was 43 pages of changes to the tax credit and Medicaid funding. This bill if passed, will look very different from it’s original draft.

Tony Nefouse
Indiana Health Insurance Company

 

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The Centers for Medicare & Medicaid Services announced the extension of grand mothered plans through 2018. If you purchase a group health plan prior to the affordable care act, you know have another year you can extent that coverage.

Indiana Health Insurance Company Updates

For Indiana, there are a lot of small companies that have been able to benefit by keeping those plans in place. They cost anywhere from 10%-25% less than ACA plans. These plans were ordinary underwritten, which leads to lower risks and better rates. They also do not have to follow the guidelines on age bands, no more than 3 x difference in cost from the oldest to the youngest. If you have younger employees, not having the age band restriction could be 40% lower than ACA plans.

Most of these plans will renew in December, remember these plans are being rated based on the groups actual claims. Rate increase can vary from single digit up to the 30% market for small group. These plans do allow for brokers to negotiate the rate increase.

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A draft of a bill that could replace the Obamacare was “leaked” on February 16th.

ObamaCare Concept

The plan would use the tax code to create subsidies/tax credits for people to purchase health insurance plans in their state. The tax credits are not going to be based on household income, but on age.  The draft gives insight on the amount of subsidies, which goes from $2,000 -$4,000 a year.

  • Under age 30 would be eligible for $2,000 a year.
  • Age 30-39 would be eligible for $2,500 a year.
  • Age 40-49 would be eligible for $3,000 a year.
  • Age 50-59 would be eligible for $3,500 a year.
  • Age 60+ would be eligible for $4,000 a year

With health insurance premiums based on age, this looks to be a fairer subsidies system. For people with incomes in the 200%-300% of FPL, premiums would need to come down to insure it’s affordable. Changing the age bands, which plans are rated on, could help with affordability.

The draft also increases the benefit of health savings accounts. Essentially, it would allow the insured to save the health plans out of pocket max on a tax-free basis.

There is interesting information on grants for high risk pools. It looks like states would have flexibility with federal grant money, state could develop high risk pools or any health insurance purpose they wish. States would have a great deal of control on what health reform solutions they develop.

The draft, goes into Medicaid reform. The Federal government will fund 60% of the cost. This is a big difference from the 90%, the fed paid for the Medicaid expansion. The states that did not expand Medicaid are not losing federal dollars.

With the repeal of the ACA, there must be funding for this reform. The bill intends on tax employee benefits that exceed the 90th percentile in value. This may be difficult to get approved. The employee benefit industry, is fully aware of what will happen if group benefits become taxable. It will cause the erosion of employer sponsored health plans.

Anthony Nefouse

Indiana Health Insurance Company

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Updates From Your Indiana Health Insurance Company

On February 16th House Republicans release a 16-page power point on replacing the Obamacare.

The first couple pages are examples of how the ACA has failed to deliver it’s intended goals. The examples give a snap shot of a loss of network access, increasing premiums and increasing out of pocket expensive. These examples are accurate and true.

The power point quoted the CEO of Aetna on the death spiral that is occurring in the individual market. Also mentioned is Humana’s exit from the individual market. Both of these statements are true.

Page 6 shows the premium increase in 2017 for all the states. One thing to note for Indiana, the Department of Insurance states that the -3% was not accurate. They publicly state that Indiana’s increase was closer to 30%. Which beg the question on what methodology did the government use to determine the individual rate increase.

The next slide touches on the lack of health insurance choices. The slide states that in 2016, there were 225 counties with only one individual health insurance choice. In 2017, that increased to 1,022 counties with only one choice. For Indiana, this has also been an issue. Anthem is the only carrier offering coverage in all of Indiana’s counties. Some rural Indiana counties have been deeply impacted, but the lack of competition and lack of network access.

On page 8 we start to see the outline of what House Republicans want to deliver. These are bullet points or talking points with little information on implementation.

The next slide outlines removing Obamacare taxes and the elimination of the Individual & employer mandate. It also states the removal of Medicaid expansion, which might be the biggest insurer of the ACA. Just in Indiana, HIP 2.0 now insures over 400K members under the ACA.   Also mentioned is open-ended subsidies, which is a very interesting concept.

The GOP stresses protecting patients with pre-existing conditions and allowing for adults to stay on their parents policy until age 26. The GOP is also addressing the traditional Medicaid and the need to modernize it. There is some info on allowing Medicaid expansion enrollees to keep that coverage for a period of time.

There is a push to transfer healthcare reform back to the state level. Each state, would be responsible or required to repair the damage that Obamacare has created. There seem to be an emphasis on going back to high risk pools. Indiana had one of the more successful high risk pools compared to other states. That risk pool was subsidized by the health insurance industry. At the time, those premiums were considered unaffordable for most. Now those premiums are below current individual markets.

There is a big emphasis on the Health Savings Accounts for individual and family plans. They want to open up the H.S.A contribution levels to the out of pocket maximum and give a wider range of medical services that the money can be used for on a tax deferred basis.

Tax credits for All!

This is very interesting and we hope there is more information released. Instead of tax credits being based on income, they would be based on age. Older members would receive a higher tax credit to offset the increased cost. There is even mention, that if you don’t use the tax credit, you can place it into to your H.S.A custodial account. This would have a huge impact.

As we come to the end of the power point, we see the buying insurance across state lines. This option would create major obstacles and could really destabilize the individual market. Each state has their own set up which mandates what individual health plans must cover. For example, Indiana has an autism mandate, while Illinois has a fertility mandate. If you are an Indiana resident that needs fertility coverage or vice versa, you would purchase a plan with that that coverage. This would cause the insurance companies to set up shop in the state with the lowest amount of mandates. The other issue is contracted reimbursement rates. A policy in Indiana, may only pay up to a certain amount for a procedure. That procedure in another state could be much higher and thus the member would be billed the difference.

All in all, this power point is the first step towards what the GOP wants to deliver for the replacement of the ACA. I think it’s obvious, there is a lack of insight from experts active in the individual markets. That is not to say that on a state level, we could develop healthcare reform that gives all parties what they need.

Anthony Nefouse
Indiana Health Insurance Company

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