Month: June 2010

This Week’s News – Week of June 14th

NY TimesNew Rules on Changes to Benefits

– The White House/HHS issuing new rules on trigger events that would eliminate the employer health plan exemption on healthcare reform provisions

– Goal is to allow people to “retain their insurance if they like it” promise made as part of healthcare reform

  • The law provides exemption or “grandfather clause”, plans that make changes in deductibles, co-payments, or benefit levels lose their exemption
  • According to White House estimates  –  50% of group plans would be impacted by 2013
  • The rules allow insurers and employers to increase benefits but reductions in coverage or higher costs to consumers will trigger the loss
  1. ALL plans, regardless of exemptions must eliminate lifetime coverage restrictions and are prohibited from dropping people when they get sick
  2. Grandfathered plans do not have to provide essential benefits packages or free preventative care

– Exemption is eliminated under the following circumstances:

  • Elimination all benefits for a certain condition
  • Increases deductibles or copays  by a rate of medical inflation plus 15%
  • Employer reduces its share of contributions by more than 5%.
  • Any increase on a fixed percentage of the cost of the operation
  • Any reduction in annuals caps (not lifetime caps as they are eliminated for everyone)

 

PWC StudyEmployers to See 2011 Medical Costs Jump

– Employers offering employee health insurance expecting another big increase this year

– Nationally, 50% of companies are reporting the health insurance deductibles are expected to rise to $400  in 2011 from 25% in 2009

– Medical costs are expected to rise by about 9% next year

– Employers with over 5,000 employees are also eliminating subsidies for retiree health from 37% in 2009 to 22% in 2011

 

KFF – Expecting Big Changes to Medicare Advantage Plans

– Last Monday, Advantage plans submitted their bid for the 2011 year

  • Bids are estimates of the costs of benefits to their membership
  • Process determines level of benefits and cost sharing amount for the year

– 2011 reimbursement tied to 2010 year

  • Benefits expected to either be reduced or have cost increases to members

– HHS Secretary Sebelius sent a letter to insurance companies warning them to not lower benefits levels or increase costs

– Current reimbursement is approximately 15% above costs –

  • Under health reform, those payments get reduced

– Will cost the government less but beneficiaries will feel the brunt of the changes

 

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This Week’s News

Washington Post – Insurance regulators miss early deadline on premium spending rules

– The national assembly of insurance commissioners ( NAIC) announced they were unable to meet the deadline for creating the rules to ensure 8-% to 85% of premium dollars are spent on:

  • Medical claims
  • Other expenses that improve healthcare

– Law aims to limit spending on marketing, admin, overhead, salaries, and dividends

– Dispute over which expenses should qualify including nurse hotlines, utilization review programs, etc.

– Law calls for the rules to be finished by Dec 31 but HHS Secretary Sebelius wanted them by Tuesday

– Proving how hard it will be to implement the rules of reform.

Wall Street Journal – Revolving door at the hospital

– Yale University study of Medicare heart failure patients shows as hospitals work to get patients out faster, more are returning for additional care within the first 30 days

– Reducing length of stay is a key component of cost reform (and healthcare insurance reform)

– Study did not look at cost but readmissions cost more in the long run

 

New York Times – Graduates may see coverage gap after all

– Dozens of national health insurers agreed to allow dependent children under age 26 stay on their parents health plan

– Law does not go into effect until September 23 (or new plan year begins)

– Many employers who offer insurance (self insured) are not accelerating the timeframe

– Employers do not have tom comply until the plan year becomes effective (usually January 1)

– For insurance companies, it is more revenue, for employers it’s more expense as they cover the direct cost of medical claims

– Mercer study of 800 employers which said only 25% of those that already offer dependent coverage will offer the benefit early

– 33% said they are considering plan changes to cover costs

– Charging more for family coverage

– Charging for each kid rather than “family”

 

KHN Healthcare – Tax credit comes with benefits, strings attached for small businesses

– Small businesses with <10 FTEs and wages <25,000 eligible for 35% credit on providing employee coverage

– Decreases as employers reach 25 FTEs and wages of 50,000 or more

– Between 1.8 and 4M businesses are estimated to be eligible.

– Credits need to be calculated individually

– Critics say it’s too complicated and does not address the underlying problem of providing health insurance:  rising costs

– If it’s too expensive, many will not offer insurance

– Family owned businesses that employ family members are not allowed to count employees that are family members

 

New Poll on Healthcare Reform – NBC/Wallstreet Journal Poll and AP

– Public against reform 44-38%

– 36% believe the quality of their healthcare will get worse – 17% said better

– But respondents said by a 55 to 44% margin said they would pick a congressional candidate willing to the law a chance (rather than repeal)

– Associated Press/GFK Poll found in May found 47-39% of Americans favored Democrats in handling healthcare over Republicans

– Polls also shows 46-39% against healthcare reform

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