Covered California - Rates Higher or Lower?

Peter Lee's announcement that the Covered California health plans will cost the same or less in some areas has drawn a lot of press this week.  Is he right or wrong?  Is he comparing apples to apples or apples to oranges?  Well, here it is in a nutshell. The premiums he is comparing over the two year period are 2013 small group premiums and what will be 2014 individual premiums.  Those of us in the insurance business have known that small group benefits are richer than most individual plans, thus they have historically cost more.  That being said, many individuals were able to get a break on prices for picking plans that do not offer all those rich benefits that were mandated into small group plans.  Some of these touted benefits are prescription drugs, free physicals, free oral contraception, physical therapy, and prior to last July maternity.  Thus prior to the health care law a single male that was healthy and not on any prescriptions could benefit from a lower priced plan and not worry about the plans benefits not being as rich as group plans.  For many this was seen as a positive.  For some however, these watered down benefits were a disaster.  If someone purchased a bare bones, high deductible plan because it was cheep then had developed health problems they were stuck in that plan.  In a sense they were paying for something that was not giving them any benefits.  I believe this became such a big problem, because more and more individuals purchased their insurance on-line or without a broker.  They did not have anyone explain the risk they were taking on by purchasing these low cost plans.  As a broker I know I would steer my clients away from such plans.  Only in a few instances were these plans appropriate.  But for the people that these plans were appropriate for the law adversely affects them.  They are now forced to buy richer plans. 

The unfortunate thing about this law is that what happened before will still happen.  People that can not afford a rich plan, gold or platinum, will buy a bronze plan.  Bronze plans actuarially work out to be a 60% - 40% plan, meaning that the insurance carrier pays 60% of the expenses and the insured pays 40%.  A very simplistic example of this would be a person that goes to a doctor and the bill is $100.00.  The carrier would pay $60.00 and the insured would pay $40.00.  That sounds fare right?  Well what if they need to have a procedure that cost $10,000.00?  The carrier would pay $6,000 and the individual would pay $4,000.00.  Most people that chose to be on a basic plan still can not pay $4,000.00 for a service.  I see just as many people having trouble paying for their care now with this law as I did before.  Even when you factor is the subsides that many people will be able to receive and that most people will be on silver plans (70%/30%) people will be forced into delaying care or forgoing it all together. 

To avoid these pitfalls it will be imperative that people talk to professionals and know what their financial situation can handle.  We don't have crystal balls to see into our future and planning for the unplanned is what insurance is all about.  Don't go it alone. 

If you have questions about health insurance please feel free to call Angela and Lisa at 714-680-5900 or email us at info@ansainsruanceservices.com .  For information on Covered California check out their web site at www.coveredca.com . 

CEO of Western Health Advantage Sees Rates Rising 40% to 70%

Garry Maisel, CEO of Western Health Advantage thinks individual health insurance premiums could rise anywhere between 40% to 70% next year in the health care exchanges.  He is quoted in the Sacramento Bee's May 10, 2013 article as saying "We have to reset the benchmark." He spells out the reasons for the rate increases and the benefits that will come with those rate increases.  To read the full article click on the link below:
http://www.bizjournals.com/sacramento/news/2013/05/10/insurance-exec-sees-rate-spike-under.html

Much of the reasons he gives we have already spelled out in previous blogs, but it is still a great article for it's condensed yet thorough interpretation of what is happening in the health insurance world.

If you would like more information on other health insurance carriers in your area please contact us at info@ansainsuranceservices.com or call us at 714-680-5900.

California Lawmakers Grant Unusual Secrecy for Contracts Related to Health Exchange

Apparently lawmakers in California think it is okay to grant blanket privacy rules on contracts that relate to activities within the California Health Exchange (Covered California).  According to the AP in an article from the Washington Post, May 9, 2013 California lawmakers are alone in the nation with the amount of privacy granted to outside firms awarded contracts within California.  No other state has built in to it's laws such widespread secrecy rules.  The law is completely supported by the Assembly Speaker, John Perez and opposed by State Senator Sam Aanestad.  To read the full article click the link below, it is eye opening!
http://articles.washingtonpost.com/2013-05-09/national/39124820_1_covered-california-california-exchange-state-constitution

Is it wise to impose such secrecy at a time when many feel that the health care law is already overreaching?  If you have an opinion on this please contact your state representatives.  If you would like to get more information on health insurance in general or how the law will affect you personally please contact us at info@ansainsuranceservices.com or call us at 714-680-5900.

Part-Time Workers Fear Cut in Hours

Hourly and part-time employees are fearful that their hours will be cut by employers trying to keep their health care costs down.  Full time, under the PPACA or "Obama Care" as it is known, is 30 hours of work a week or more.  Employers that employ 50 or more "full time equivalent"  employees must offer minimal coverage to their full time employees.  So many employers are being forced to decide what to do with their part-time or variable hour workers.  To keep costs down, many employers are making sure their employees do not work more than 27 hours a week, thus staying under the 30 hour rule.  It is an unintended consequence of the law, but now part-time employees may see their take home pay cut as a result.  If you would like to read more about the problem, The Los Angeles Times had a great article by Chad Terhune on this subject.  To read the full article click on the link.
 http://articles.latimes.com/2013/may/02/business/la-fi-part-time-healthcare-20130502

If you have any questions about health insurance or life insurance please feel free to call us at 714-680-5900 or email us at info@ansainsuranceservices.com .  To check out rates and what we do go to our website at www.ansainsuranceservices.com .

Updates on Health Care Reform

Self-funded groups be on the look out for information on PCORI (Patient-Centered Outcomes Research Institute) - it is one of the taxes you will need to  pay for PPACA.  (If you are not a self-funded group your carrier is taking care of filling this tax.)  It is due by July 31, 2013 for groups with plan years that end between October 1, 2012 and October 31, 2013.

Our state legislature has been very busy trying to pass laws to implement PPACA.  Some have been useful and necessary and some are overreaching.  Please take a few minutes out of your day to contact your state representatives and let them know how you feel.  Two such bills are SB639 and SB189.  State Senate Bill 639 (Hernandez) is one of the over reaching bills.  It sets forth to limit choices in individual, small group and large group health insurance policies.  The limits proposed in the bill are not actuarially sound and will do more harm than good in the long run.  State Senate Bill 189 (Monning) proposes bans on wellness plans.  We all know that wellness plans are for the good of individuals as well as our state on a whole.  Limiting or banning all together these plans does not help to make a healthier state.

If you would like more information on the taxes being imposed by PPACA or state legislation please feel free to contact us at angela@ansainsuranceservices.com or call us at 714-680-5900.

Plan to Reduce Medicare Spending by $300 Billion

This week the Bipartisan Center (led by Senator Daschle, D-SD) offered a plan to reduce health spending by cutting $300 Billion from Medicare  over the next 10 years.  In addition to those cuts, it proposed an additional $260 Billion in cuts from other sources in its efforts to cut the deficit by a total of $560 Billion over that same 10 year period.  The cuts to Medicare would be spread out by adding deductibles to beneficiaries, making accountable care organizations (ACO's) as well as a host of other plans that would aim to give better service for less money.  You can read the full article in Kaiser Health News by clicking on the link below:

http://capsules.kaiserhealthnews.org/index.php/2013/04/bipartisan-center-offers-plan-to-reduce-health-spending/?referrer=search

Kaiser Health News contains a wealth of information on all kinds of health related articles.  It is well worth putting in your "favorites" and checking from time to time.  If you have other questions regarding health insurance or life insurance please feel free to contact us at (714)680-5900.

Doctors May Have Trouble Being Reimbursed from Patients on the Exchange

Under the current rules, individuals in the health exchange (Covered California) will have a 3 month grace period if they are late with their insurance premium payments.  Add to that, that the insurance companies will not be liable for payments owed to doctors if the policy lapses in that time and you can understand why many doctors are quite concerned about taking patients from the health exchanges.  Under current rules, doctors would still be paid if the individual's policy lapses.  Thus, doctors are worried that they will be left on the hook for monies owed to them if a patient let their policies lapse while under care.  In an article from Med Page Today (David Pittman, April 13, 2013) it is explained why doctors are so worried about taking patients that obtained their insurance on the exchange.  The average out of pocket maximum for an individual is expected to be around $6,400 and for a family it is $12,800.  That is a lot of money for a family to pay, especially if they are low wage earners that qualify for the exchange in the first place.  To read more click on the link below.
http://www.medpagetoday.com/MeetingCoverage/ACP/38437?xid=NL_DHE_2013-04-15&eun=g592173d0r&userid=592173&email=christinedaigle66@gmail.com&mu_id=5717036

The exchange has much to offer, but it will have some pitfalls.  To find out more about the exchange you may contact us at (714)680-5900 or email us at info@ansainsuranceservices.com .