Health Insurance and You!

Image Credit: Kaiser Family Foundation

     Employer-sponsored health insurance covers about 157 million Americans, making it the largest source of health coverage in the country. Recent findings in a study conducted by the Kaiser Family Foundation, state that employees’ share of premium costs have increased by 47% in the last five years alone. Overall, the average annual family premium for covered workers in small firms increased 103%, in the last decade. Furthermore, 30% of employers sampled reported that they “reduced the scope of benefits or increased cost sharing because of the recession.” In this blog on CNN Money, economist Deborah Chollet describes the situation these companies are in: “employers are struggling to keep their head above water. They’re cutting costs just to maintain employment. One way to do that is to make workers pay more.” Clearly, employees aren’t catching a break anytime soon—so what impact will health care reform have on this? Chollet hopes that, “with reform, there’s an increase in the number of insured people and this will help drive down the big [cost] increase. The KFF study points out that reform will likely have little tangible effect on the premiums that employers and employees pay, in the short-term. However, we can expect imminent improvements in coverage (i.e. limiting annual/lifetime caps on coverage and extending young adults’ coverage under a parent’s policy till age 26) thanks to the Patient Protection and Affordable Care Act. Reform holds the promise of long-term savings for both employees and employers, though these changes will be protracted following implementation in 2014.

Following the passing of health care reform earlier this year, we are already seeing some of its benefits being put into action—although the bulk of the Patient Protection and Affordable Care Act won’t be implemented until 2014. Until then, the new rules of health care reform could pose a significant risk to street brokers.

This is a byproduct of the law’s effort to cut down on administrative costs, as explained by Kate Pickert of TIME: “under the affordable care act, beginning in January, plans sold to individuals and small groups must spend 80% of premiums on actual medical care (as opposed to administrative costs) […] the NAIC counted agent and broker commissions, which can make up 5% to 20% of premiums, in the administrative category. Most experts, therefore, predict these commissions will be on the chopping block as insurers scale back administrative expenses to comply with the new rules.”

As disruptive as this governmental reform could be for brokers, so is the impending modernization of health insurance, which (like so many other consumer products before it) may simply be going online with assistance from licensed and professional experts on the phone. However, net brokers will survive because they provide real value to the consumer, with or without reform. If there truly is a complete online-overhaul of health insurance in the near future, online “exchanges” are only one incarnation of an e-broker function. Brokers should be thinking long and hard about how to scale and utilize technology to justify the cost of their service while providing value to their customers.

We welcome the competition from exchanges, as well as the opportunity to use our technology to power them. Guiding you (the customer) through a consumer finance purchase as complex as health insurance, in our opinion, requires a measure of assistance that we excel at. This is possible because we provide a unique combination of technology, transparency, and guided education from a licensed health insurance expert.

Having lost control over both the presidency and Congress, the GOP has overwhelmingly voted against economic initiatives aimed at alleviating the devastating effects of the recession. Be it the stimulus bill, energy bill, or health care reform, “Republican [leaders] find a way to argue that whatever Democrats are doing, it’s hurting the economy,” say Terence Burlij and David Chalian of the PBS Newshour blog.

Now you might be wondering, “Okay, but how does this affect me?” Well, in coming months we expect to see Republicans’ continued opposition of health care reform in several ways.  Grace-Marie Turner of the Wall Street Journal elucidates the ways in which the GOP will likely try to block health care reform: “their strongest cases would be built around jobs, the cost of health care, and the rising deficit. If evidence shows that looming mandates on employers are crippling job creation, they should be repealed. If health costs are rising, as they inevitably will be, Congress needs to hold hearings to investigate the causes and explain why the offending taxes and regulations must be repealed.”

It’s clear by now, that health care reform is far from being a done deal. The unfortunate byproduct of these efforts by the GOP is uncertainty for you—the consumer. There are justifiable concerns about the government’s ability to overcome the GOP’s blocking tactics, and achieve long-term success in financing reform.  Having said that, many aspects of reform (such as the inability to reject sick applicants) will help up to 30% of our customers immediately. You can expect us to track health care reform carefully, and make the necessary investments to ensure our customers can reap its benefits.

U.S. Department of Health and Human Services Secretary Kathleen Sebelius announced Monday more than $32 million will be allocated to 7 programs that improve rural health priorities, administered by the office of Rural Health Policy in HHS’ Health Resources and Services Administration (HRSA).

Because rural areas often face a shortage of local providers, these funds aim to provide incentives to provider networks that serve these rural populations. “Funds will be used to recruit and retain rural healthcare professionals and modernize the healthcare infrastructure in rural areas,” said HRS Administrator Mary Wakefield.

The bulk of funds, about $22 million, will go toward the Medicare Rural Hospital Flexibility Program, which supports improvements in healthcare quality in areas served by Critical Access Hospitals; efforts to improve hospitals’ financial and operating performance; and the development of collaborative regional and local delivery systems. With help from this program, at least 1,300 hospitals have converted to critical access status since 1998.

The following programs will receive funds, as well:

• More than $3 million for the Rural Health Workforce Development Program, a one-time pilot program, aimed at recruitment and retention of emerging health professionals in rural communities.
• More than $2 million for the Telehealth Network Grant Program, which allows patients in rural areas to receive health care without traveling far. Telehealth is also used for healthcare administration and distance education.
• More than $1 million for the Telehealth Resources Center Grant Program, which provides technical assistance to help implement cost-effective telehealth programs in remote areas and underserved populations.
• Nearly $1 million for the new Flex Rural Veterans Health Access Program, which provides rural veterans with access to mental health services, among others.
• $770,000 for Frontier Community Health Integration Demonstration Program, to develop and test new models of healthcare delivery services
• $500,000 to Rural Training Track Technical Assistance Demonstration Program, which will analyze RTT program sites and provide technical assistance to increase the number of family medicine physicians that take part in these rural residencies.

Health and Human Services Secretary Kathleen Sebelius has a warning for us: watch out for “government salespeople” going door-to-door in the name of new healthcare reform.

In a letter to state insurance commissioners Sebelius called attention to the issue. According to the letter, consumers should look out for policies that are required by health reform legislation, offer few or limited benefits, or exist for a limited time. These are telltale signs of a scam and should be reported.

The National Association of Insurance Commissioners also released a statement cautioning consumers against inadvertently buying highly basic plans – and provided some tips for those who are considering basic plans. Many of the scammers’ plans have very limited benefits such as Cancer Only and offer little coverage.

But at the end of the day, it is imperative to make sure you’re buying a legitimate plan.
Purchase your policy from a reputable source such as GetInsured.com and do the research to ensure you’re not being scammed.

The popularity of Health Savings Accounts (HSAs) and High Deductible Health Plans (HDHPs) has been steadily rising, especially in the eyes of employers. Health insurance provided by large employers is still the gold standard for individual and family health plans. This is why the trend of employer favorability toward HSAs and HDHPs has naturally, been followed by corresponding consumer enthusiasm. Consider the facts: the 2010 census by America’s Health Insurance Plans (AHIP) of U.S. health insurance carriers indicates that the number of people covered by HSA/HDHPs totaled 10 million as of January of this year. This represents a jump of 9 million people, within the last five years.

You might be thinking, “Ok, the numbers speak for themselves, but why should I be interested?” The answer is simple: our belief in consumer driven health care is the very foundation of an HSA. These accounts give you (the consumer) an economic incentive to manage your own health care expenses by combining:
1)    A tax-free savings account for medical expenses, with
2)    A high deductible health plan that meets requirements for deductibles and maximum out-of-pocket limits.
Another benefit is the variety of preventative care options (i.e. doctor visits, physical exams, immunizations, well-baby visits) provided by HDHPs, which can be taken advantage of without having to meet the first deductible. The report also indicates that preferred provider option (PPO) plans were the most popular products among HDHPs.

One can expect these changes are here to stay, at least for the foreseeable future. The Wall Street Journal reports, “64% [of large employers] will offer a high-deductible plan with an HSA for 2011.” If you opt for a HDHP, opening up an HSA is a smart way to save money for medical expenses incurred during retirement. Unlike funds stored in a 401(k), this money can be withdrawn tax-free, for medical purposes, before or after age 65. One change in HSAs, noted by The Washington Post, comes via health care reform and is effective January: “if you use your HSA for nonmedical expenses, you’ll be hit with a 20% penalty instead of the current 10%.” However, this penalty no longer applies after you turn 65. If you can afford it, you should open up this account in addition to your 401(k), and build up both for future medical/retirement expenses. To learn more, check out this brochure about HSAs from the U.S. Department of Treasury. Also, check out this comprehensive “Common Sense Guide to Health Savings Accounts.”

Today, the U.S. Department of Health and Human Services announced that grant awards of $1 million each will be given to 45 states (and the District of Columbia) to help improve the oversight of proposed health insurance premium increases, and challenge insurers seeking outrageous rate increases.

Certainly, this is bad news for the insurance companies, who have essentially been able to increase premiums as they please.  Infact, premiums have doubled in the last decade – a disproportionate increase unparalleled by wages and inflation. It doesn’t take exceptional math skills to figure out what this means: obtaining health insurance is harder than ever for millions of Americans today. However, these awarded funds will help states crack down on the review processes for premium increase requests, and ensure that consumers get the most of every dollar spent.

That said, you might be wondering: how does this announcement affect me – the consumer? In his White House blog, Governor Chris Gregoire explains, “[these funds] increase the transparency of the health insurance premium review process, and provide easy to understand, consumer-friendly information to the public about changes in their premiums.” For example, part of the funds granted to the state of Washington will be used to create a consumer website called “Consumer Care” to provide information about the cost and quality of health care.

Locate your state on the HHS website to see how funds will be implemented locally.
In the meantime, you can also view free side-by-side comparisons of health insurance policies on getinsured.com, to ensure you get the best plan, at the best price for you.

Look’s like our belief in consumer driven health care is catching on.

On Aug. 5, both Aetna and Wellpoint declared their support for Health Information Technology (Health IT). Essentially a broad electronic medical record, Health IT claims to allow for “comprehensive management of medical information and its secure exchange between health care consumers and providers” according to healthit.hhs.gov.

Health IT would allow for increased efficiency and more comprehensive and accurate diagnoses of patients by presenting a database of medical information. It would include patients’ medical histories among other things to expedite administrative tasks.

Wellpoint’s Pay for Performance incentives will be synced with federal programs to create a new financing program. This program will support Health IT in underserved areas.

Aetna plans to support Health IT by offering financial incentives. It would reward physicians who reach certain quality of care objectives and invest in technology for application of electronic records.

ActiveHealth Management, a subsidiary of Aetna, also announced a steady turn towards Health IT. With IBM at its side, Activehealth has begun work on Collaborative Care Solution. This product will change the way healthcare is administered and delivered, relying upon Health IT and clinical decision support to allow for a higher quality of care at a lower cost.

Health IT is expected to make the process and execution of healthcare more effective, efficient, and precise and with major providers such as Aetna and Wellpoint behind it, Health IT seems to be on the rise.

Two-thirds of California is experiencing a shortage of doctors, according to the Huffington Post. Almost 30 percent of California’s physicians are above the age of 60, and the problem may well be getting worse. More doctors are close to retirement in California than in any other state in the country.

There is also a cultural component to the issue. Californian Latinos, for example, comprise over 35 percent of the state’s population – but only 5 percent of our physicians. Furthermore, patients and providers often have better exchanges when the patient can relate more readily to the physician. This relation can further increase the quality of primary care.

However, there are a limited few areas in California which meet the US Department of Health and Human Services’ recommendation of 85-100 specialists for every 100,000 people. These include the Greater Bay Area, the Sacramento Area, and Orange County. But even these areas’ futures in terms of primary care physicians are not necessarily secure: by 2014, the LA Times reports, the Los Angeles County may have a serious shortage of doctors across the board – even at the coroner’s department. This severe deficiency of physicians is likely to have an effect on Californians in the foreseeable future despite any progress with the health care overhaul.

Major providers have been promoting more cost-effective health plans with lower premiums that offer customers a more limited array of doctors and hospitals, as reported by the New York Times. These plans are most likely to draw in small businesses, which typically tend to be more cost-conscious, that make insurance available. They tend to have higher deductibles and low premiums. Insurers say that companies that invest in these limited plans may reduce their premiums by as much as 15 percent.

The limited group plan’s network of doctors tends to run smaller than most traditional plans, which would narrow down options and potentially restrict customers for receiving full and proper coverage. At the same time, these plans are the more pragmatic option for cash-strapped businesses. They are also generally convenient for employees who tend to be normally healthy and require little in the form of medical attention.

However, the quality of these limited-but-affordable health care plans has been called into question by the public. While insurers have assured customers that the plans do not sacrifice quality coverage for affordability, it comes down upon the consumers in the end to do the legwork and ensure that they are receiving adequate coverage. These plans may prompt customers to think about buying an individual health plan to retain a wider range of providers

How do you feel about these limited-network group plans?