ACA Update- How Association Health Plans Can Help

Affordable Care Act Update

Mike Bitters/Steve Church

We want to provide you with the information you need to both be in compliance and make the best possible decisions on health insurance options for the Kentucky market place.   

Individual Mandate:

·         The ACA requires everyone to be enrolled in a health plan by March 31, 2014

·         If you do not have coverage there will be a penalty. 

·         The last enrollment date for individual plans is 3/31 for a 4/15 effective date. 

·         If you are not enrolled by 3/31/2014 you will have to wait until this fall to enroll.   

The Exchange Marketplace

 Kynect gives you a choice of the following insurance companies:

o   Anthem/Pathway

o   Kentucky Health Cooperative

o   Humana (HMO options only in Louisville, Lexington and Northern Kentucky).  

To be eligible for any subsidy, you must enroll through the Kynect website.  Subsides are based on income and family makeup. 

The Off Exchange Marketplace

The carriers that are writing individual plans outside of Kynect are :

o   Humana (PPO & HMO)

o   Anthem/Pathway

o   Assurant. 

 

When considering which market place is best for you, pay attention to the plan designs and the provider networks available. Do not assume that your doctor or hospital is taking the plan you chose simply because it is an Anthem or Humana plan.  They have significantly changed their provider networks for these products   YOU MAY NOT HAVE ANY COVERAGE IF YOU GO OUT OF STATE.

Don’t take a chance on this, get with a professional insurance broker (like Logan Lavelle Hunt) and discuss thoroughly.  Only a licensed broker in Kentucky, under the ACA, can make a recommendation to a client, so call Logan Lavelle Hunt for sound guidance.

Small Group Employers (2-50):

January 1, 2014 began the full implementation of health care reform nationwide.

o   Community Rating is how health insurance rates are set for this size company

o   Carriers can no longer use health history to set your premiums. 

o   Age, geographic location and smoker/non smoker are only factors used do determine rates.  

Because of this rating methodology many (a majority) of employers accepted an “early renewal” for December 1, 2013 to avoid the negative effect this will have on your premiums. For employers who did not accept this “early renewal” or got busy and did not pay attention, there have been renewal increases from 30-80%.

Small Business has not been offered an extension or waiver to put off the effects of the ACA.  This segment of employers is getting hit the hardest due to ACA.

The unique benefit of being a member of a Trade Association that has a group insurance program is that the group medical plan for members avoids these rating provisions.

o   The Association Plan is  treated as a large group health plan under the ACA

o   The Association Plan is able to use medical history to set premiums. 

 

Although not a perfect fit for every employer, this is a strong option that members need to look into.  Logan Lavelle Hunt, our agent, has had recent success with a member who received an 80% increase as a result of community rating and the ACA.  Through the Association  plan that member only experienced a 9% increase for the same benefit selection.

 Large Group Employers (50-99)

Another delay in ACA implementation was handed down on February 10, 2014 for companies of this size.  If you have a company that is in this category, you are probably familiar with the “Play or Pay” provision that is in the law.  Basically, “play or pay” means that you either provide a minimum health insurance plans to all full time employees (play)  OR pay a fine to the government if you choose not to provide employees the coverage.  This has been very problematic for the administration politically and therefore changes were made for this segment of companies.

The changes are as follows:

o   “Play or Pay" deadline has been pushed back to January 1, 2016

o   Community Rating (described above) will take effect on January 1, 2016 

The Association group medical plan can be an attractive option today for larger employers, why wait?  Take all of the guess work out of ACA by joining our program now.  

With all the changes in the individual and group market place using a professional insurance broker is more important than ever.  Remember to contact Logan Lavelle Hunt, our exclusively endorsed agent, if you want more information on your Association Group Plan. 

The Hidden Cost of Obamacare Delays

You know I may not be the sharpest knife in the drawer, but I do know that the more you put off doing something the harder it becomes to actually do it!  This blog is a perfect example of this premise.  I have pushed this back a few weeks now, and have started and stopped several times.  I have 3 drafts written that are about completely different topics because some of the information that I was going to impart on those who read my blog have ACTUALLY CHANGED since the last time I wrote on this topic!!

You may or may not know that President Obama announced another delay in a key component of his landmark health care law last week.  On Monday February 10, 2014 the president unilaterally decided to delay the “play or pay” provision for employers with 50 to 99 workers for an additional year.  If you are unfamiliar with the term “play or pay” it simply means those employers, under the new law, would have to provide health insurance to their workers OR pay a monetary fine if they chose not to have an insurance program for their people.

I am not as bothered by the delays in these provisions as I am about the potential motives that drive them and the real costs that are generated from them.  Let me explain.  Let’s take motivations for starters.  My question is this…If the Affordable Care Act was so important for the well being of the American people, why does the man who orchestrated its origins and implementation feel the need to delay ANY part of this law?  There have now been 28 material delays in implementing this law.  Some have been small and probably necessary.  Other delays seem to be oddly timed, maybe even calculated.  The timetable for the entire rollout was oddly fashioned so as to implement the most punitive provisions conveniently after key election cycles.  So you are sitting there thinking to yourself,” of course they planned it that way, are you that naïve?”  No, I’m not, but the reality is this; if you believe that Obamacare is the right direction for our country then every delay is a wasted opportunity for you to be better off.

I find it odd that small business and individual policy holders are the only segment of the market not to be graced with a significant delay.  Health insurance carriers actually developed a strategy at the end of last year to “avoid” most small companies feeling the effects of Obamacare for an additional 12 months by offering an early renewal prior to the law going into effect on January 1, 2014.  The government doesn’t seem to be interested in those smaller fish, how does that make you feel?  I’m not trying to stir things up here, but I am a small business owner. 

The other costly side effect of all these delays and changes are the opportunity costs that exist due to the uncertainty.  Insurance companies cannot confidently invest in technology or innovation to any large extent because we don’t know from day to day what the next delay will be.  The resulting stagnation permeates the industry because no one wants to have the answers to the test only to find out that the questions have changed.  I have already discussed the “tangible” costs that some of the changes in this law have accumulated over the past 5 years. Billions have been spent on programming, revamping, restructuring and recertifying.  All of this time and brain energy has a real dollar value to it, and it is almost too bleak to think about.

This is either a good thing or a bad thing for the country long term.  Why not just let it stand on its own merit?  Rip the band aid off real fast and see how long it stings.  For those who supported it, have the guts to stand by your principles.  To those who opposed it, have a plan ready to replace it if you happen to be correct. Either way, delays or extensions just prolong the inevitable.  Let’s move on.

What if we started over?

I know that the ACA troubles that have and will continue to occur as the nation adapts to Health Care Reform will not likely be changed by the administration.  But what if we could start over?  What would meaningful Health Care Reform look like?  What would our priorities as a nation be?  I have spent a good bit of time thinking about those questions and from my perspective, one of a career health insurance agent; we are missing the mark by a pretty substantial margin currently. Let’s take them one at a time, shall we?

Could we start over?  Yes! We could and we should in my opinion.  The best laws of this nation are not complex, they are simple.  Due to the sheer volume of this law, it was doomed to calamity from the outset.  Although many bright minds were tasked to construct this endeavor, it was not a law that solicited the voices of the very people who would ultimately be charged with doing the grunt work.  That work is being done by the real and credible insurance companies. Like them or hate them, they are not the problem with this law.  And while having somewhat of a voice, they were largely dismissed as being self serving and narrow minded in the reform discussion.  This is my opinion of course, not supported by first hand observation as I was not invited to the meetings, but from conversations I have had with folks who were closer to the making of this law, I remain confident that the input of Insurance Companies were largely ignored.  The proof of this assertion is the final product.  It will fail, it has no hope of succeeding as currently fashioned because it defies the very principles that insurance relies upon to work.  So if we can start over, I would advise the powers that be to listen to and implement the ideas of those folks who handle risk for a living.

Meaningful Health Care, what does that look like?  I my mind, meaningful health care would provide basic access to the needs of our people.  This would be the starting point for all coverage and would not mandate un-needed benefits to any segment of our population. (No maternity coverage for men, etc) Based on means testing, this coverage could be completely free to a low income family, and provide office visits, hospitalization, and prescription drug coverage for necessary medications.  It would be a Medicare type system, and certain doctors and hospitals would either choose to accept those patients or not, however, if you chose not to accept those patients you would not be eligible for federal funding of any kind. As your financial situation improves, you would have less and less subsidy for the basic plan.  This plan would not be mandatory for anyone; it would be voluntary and available if you chose to participate.  For those who could afford to pay for the plan, a premium for this basic coverage would be charged.  All other insurance policies would be available through private insurance companies, and just like buying a home or a car, your preference would determine the plan features as well as the cost. 

Many people might look at what I just wrote and say, “That is what the ACA did.”  Not true.  The ACA went far beyond providing basic coverage by mandating “essential benefits” which for many people are not essential at all, thus driving the price of the “basic plan” to an unaffordable level.  In my opinion people need the following:

·         Office Visits with affordable co-pay (preventive services included)

·         Emergency Room access with affordable co-pay

·         Hospitalization coverage with a reasonable deductible

·         Lab work included in the appropriate level of care

·         Prescription Drug coverage at the generic level unless no generic is available

·         Physical therapy appropriate for injury or condition (best practices)

·         Mental/ Nervous therapy appropriate for condition(best practices)

·         $5 million lifetime  maximum on services

·         Maternity and prenatal care for females only

What is affordable and reasonable?  According to ACA, the bottom tier coverage is a Bronze level plan, which pays about 60% of the medical costs that a person incurs, and that person would have to come up with the other 40%.  That seems like a good deal if you only incur $10,000 worth of medical expenses.  But if you have $100,000 of medical expenses, it is a different story. (Note: There are out of pocket maximums, but with a deductible and out of pocket expenses the money gets real, and quickly) 

I have talked about this before, but it bears mentioning again.  The statistics just don’t add up to a massive overhaul of the system.  It is estimated that 20% of the American public are uninsured.  I would guess that about 8% of that group is chronically uninsured, and those folks are more than likely poor, very poor.  We as a nation need to address that sooner rather than later, and health care is just the tip of the iceberg on that issue.   There is probably another 2-3% of that population that are in and out of health insurance, due to job change, financial conditions changing or other issues beyond their control.  I get that, it is a hard place to be.  However, the remaining 9% or so in this group are uninsured by choice.  They can likely afford to purchase a policy but choose not to do so.  The breakdown continues that 50% of the people are covered by an employer plan of some sort.  30% are covered by a government entity.  So in my feeble mind, what are we really talking about?  We are changing the entire system of health insurance (like it or hate it) for 11% of the people who are legitimately in a bad spot.

What do our priorities as a Nation need to be?  These are my thoughts.

·         Help the legitimate poor get health care

·         Prohibit prescription drugs advertised on TV from being covered by health plans

·         Pass meaningful tort reform that preserves the rights of legitimate malpractice victims

·         Prosecute fraud and abuse to the fullest extent of the law every time

·         Electronic medical records conversion within the next decade

·         Eliminate costly barriers to practice medicine (HIPPA  and the like)

·         One pay all pay pricing by doctor’s and hospitals (Lowest pricing enjoyed by all carriers)

I am sure that these are not all of the things we need to address but it is a start.  The whole mess is complicated, but we weren’t too far off with the system that we had.  One thing that has gotten away from all of us is that you must have PERSONAL RESPONSIBILITY for making sure your health care needs are addressed.  Somewhere along the way we as a society have taken the attitude that someone else needs to pay for my misfortune.  Well, in some cases I agree, but for the most part, people have got to start making better choices.

Peace!

The 12 Days of Obamacare

The 12 Days of Obamacare

On the first day of Obamacare,
The President sent to me
And a web site that didn’t even work.

On the second day of Obamacare,
The President sent to me,
Two stinking lies,
And a web site that didn’t even work.

On the third day of Obamacare,
The President sent to me,
Three times the cost,
Two stinking lies,
And a web site that didn’t even work..

On the fourth  day of Obamacare,
The President sent to me,
Four new mandates,
Three times the cost,
Two stinking lies,
And a web site that didn’t even work..

On the fifth day of Obamacare,
The President sent to me
Five million cancelled,
Four new mandates,
Three times the cost,
Two stinking lies,
And a web site that didn’t even work..

On the sixth day of Obamacare,
The President sent to me
Six worthless benefits ,
Five million cancelled,
Four new mandates,
Three times the cost,
Two stinking lies,
And a web site that didn’t even work..

On the seventh day of Obamacare,
The President sent to me
Seven times the headaches,
Six worthless benefits ,
Five million cancelled,
Four new mandates,
Three times the cost,
Two stinking lies,
And a web site that didn’t even work..

On the eighth day of Obamacare,
The President sent to me
Eight years of chaos,
Seven times the headaches,
Six worthless benefits ,
Five million cancelled,
Four new mandates,
Three times the cost,
Two stinking lies,
And a web site that didn’t even work.

On the ninth day of Obamacare,
The President sent to me
Nine huge new taxes,
Eight years of chaos,
Seven times the headaches,
Six worthless benefits ,
Five million cancelled,
Four new mandates,
Three times the cost,
Two stinking lies,
And a web site that didn’t even work.

On the tenth day of Obamacare,
The President sent to me
Ten new departments,
Nine huge new taxes,
Eight years of chaos,
Seven times the headaches,
Six worthless benefits ,
Five million cancelled,
Four new mandates,
Three times the cost,
Two stinking lies,
And a web site that didn’t even work..

On the eleventh day of Obamacare,
The President sent to me
Eleven employers dropping,
Ten new departments,
Nine huge new taxes,
Eight years of chaos,
Seven times the headaches,
Six worthless benefits ,
Five million cancelled,
Four new mandates,
Three times the cost,
Two stinking lies,
And a web site that didn’t even work..

On the twelfth day of Obamacare,
The President sent to me
Twelve docs retiring,
Eleven employers dropping,
Ten new departments,
Nine huge new taxes,
Eight years of chaos,
Seven times the headaches,
Six worthless benefits ,
Five million cancelled,
Four new mandates,
Three times the cost,
Two stinking lies,
And a web site that didn’t even work..

Why Does the ACA need young people??

I have stayed away from the political rhetoric that has surrounded the Affordable Care Act since the inception of this blog.  Obviously, I have my opinions, but I feel that my role is to relay information, for the most part, not my own views. While I have not been overly impressed with the execution and implementation of this law, I have remained hopeful that some positive things will occur due to the exercise that we are currently enduring.  With each reactionary change, and distortion of facts that occur the less hopeful I become.

The latest news that really disturbs me is the “rap” music ad aimed at inspiring young people to enroll in the exchanges. I wish them well with that endeavor, but it just ain’t gonna happen, rap music or not.  The young people between the ages of 27 and 34 who have never had to purchase health insurance before will not see the value proposition in a Bronze level plan through an exchange with the premiums I have seen listed and the out of pocket costs associated with those particular plans.

Using the premium calculator on the Kynect website, a 30 year old person living in Jefferson County with an income of $35,000 per year would pay $182.30 per month for a Bronze Level plan. Due to the income level, they would not be eligible for a subsidy.  This means that the policy holder would be responsible for 40% of all medical spending out of their own pocket.  Conversely, under the current environment that same 30 year old, provided that they were in reasonably good health, would likely be paying a premium of around $90 per month on a plan that would cover about 80% of all medical spending for the calendar year.  The economics don’t seem to work.

The Exchanges need the young people, in fact, they must have them participate or the assumptions that were made about the financial viability of this entire plan are in jeopardy. The numbers were based on the young people signing up and paying premiums.  The government is not shy about the fact that younger healthier people will pay a little more under the ACA, in order to offset the older, less healthy individuals who may end up paying less for health insurance.  Subsidy of rates have always been a part of insurance premiums, even today, pre ACA the younger, healthier policy holders pay more premium than they should and the older, sicker people pay less than they need to in order to cover the true costs associated with being covered.  However, the spread between the lowest available rate and the highest available rate has been compressed under the ACA.  The result of that compression is that it pulls the bottom of the charts up and brings the top of the charts, from a rating perspective, down. 

Young people today are just not willing to pay $2184 per year for a health plan that could potentially cost them an additional $11,000 more in deductibles and co-insurance when the penalty is just $95 or 1% of your income, which ever is higher.  So for our 30 year old, the penalty for not having health insurance would be $350 for the year.  That is less than 2 months worth of premium payments.

I want to be clear that I am not advocating that young people refrain from purchasing health insurance.  I think that everyone should be insured, as it is the responsible thing to do.  What I am saying is that the system that has been developed and the pricing that is out in the marketplace will make this a very hard sell. 

For you small to mid size employers out there, the last thing you need to think about is dropping your employee health insurance plan.  This is your opportunity to be the hero and provide your employees with one less thing to worry about.  We can assist you in making critical decisions regarding your employee benefit programs and their effect on your bottom line.  Logan Lavelle Hunt is ready to take your calls and inquiries right now.  Contact us for a no obligation review of your plan today.

In Peace,

Steve

Taking the Easy Way Out this week!

Well, there is too much changing for me to go out on a limb and try to tell you what the ACA is going to do this week, so I decided to take the easy way out and just pass along some information about the Essential health benefits required by the act.  I have to credit my friends at Anthem/Wellpoint for this summary that they provided me.  This is still accurate as far as I know.  Good luck out there, and if you need assistance, make sure to go to our website www.llhins.com We are ready to offer assistance.

Essential health benefits (EHBs)           

Summary

On February 20, 2013, new rules was released by the Centers of Medicare & Medicaid Services (CMS), the Department of Health and Human Services (HHS) and Department of Labor ( DOL)

Effective for new and renewing plans on and after January 1, 2014, all non -grandfathered, fully insured small group and individual health plans must cover essential health benefits (EHBs).

Also effective for new and renewing plans on and after January 1, 2014, all health plans, regardless of group size or funding type, must apply all member cost share for in-network services and out-of-network emergency services to the in-network out-of- pocket (OOP) maximum, which cannot exceed $6,350/$12,700.

All copayments, coinsurance and deductible amounts for EHBs must apply to the out -of-pocket maximum. No annual or lifetime dollar limits are allowed on EHBs, but other types of limits can be put in place including,

·        visit limits (e.g., 20 visits per CY)

·        day limits (e.g., 30 days per lifetime)

·        occurrence limits (e.g., 1 wig per CY)

·        per episode or per service limits (e.g.,$1,500 per hearing aid) 

Definitions

Essential health benefits (or EHB) package: the covered benefits and related limits of a health plan offered by an issuer based on the EHB-benchmark plan; provides at least the  ten statutory categories of benefits, limits cost sharing for such coverage, subject to offering catastrophic                                                                  .

·        Base-benchmark plan: the plan selected by a state from (or through the default process) before adjustments are made to meet the benchmark standards. (Details can be found in the Code of Federal Regulations §156.110.)

·        EHB-benchmark plan: the standardized set of EHBs that must be included in all non-grandfathered, fully-insured small group and individual health plans beginning in 2014.

State selection: serves as a reference plan and reflects the services and related limits offered by a typical employer plan in that state; applies to at least 2014 and 2015 benefit years.

Default base-benchmark plan: states that did not make a benchmark plan selection defaulted to the plan with the most

Final rule: EHB package

EHB-benchmark must provide coverage of at least the following categories of benefits:

1.    Ambulatory patient services

2.    Emergency services

3.    Hospitalization

4.    Maternity and newborn care

5.    Mental health and substance use disorder services, including behavioral health treatment

6.    Prescription drugs

·        Must cover the greater of either one drug in every United States Pharmacopeia (USP) category and class, or the same number of prescription drugs in each category and class as the EHB -benchmark plan

·        Must have procedures in place that allow a member to request clinically appropriate drugs not covered by the health plan

·        Does not require coverage of all drugs in protected classes as defined in Medicare Part D

7.    Rehabilitative and habilitative services and devices

·        The final rule allows states with benchmark plans that do not include coverage for habilitative services to determine which services are included in that category.

·        States that decline to specify habilitative services are required to either provide parity by covering habilitative services benefits that are similar in scope, amount and duration to benefits covered for rehabilitative services, or is determined by the issuer and reported to HHS.

8.    Laboratory services

        9.    Preventive and wellness services and chronic disease management
     10.  Pediatric services, including oral and vision care

·        Pediatric services means services for individuals under the age of 19

·        Benchmark plans that do not provide coverage  for pediatric oral and vision services are required to cover these services from one of the following:

·        The Federal Employees Dental and Vision Insurance  Program (FEDVIP) with the largest enrollment (CHIP) 

Large group and self-funded (ASO) health plans do not need to offer all 10 categories of essential health benefits, or meet actuarial value requirements that non-grandfathered small group and individual policies have to meet. The rule is still important to large group and self-funded (ASO) plans because they are subject to many rules tied to EHBs such as:

·        The out-of-pocket maximum applies to EHBs
·        EHBs covered by a large group or self-funded (ASO) plan cannot have annual or lifetime dollar limits

 

Credit Anthem Blue Cross Blue Shield for content