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Group Health

A Possible Alternative To The Individual Mandate

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[…] Guaranteed-issue health insurance is expensive. When it’s enacted without a mandate requiring people to buy it, the premiums can become out of reach very quickly. In Colorado, group health insurance (all eligible employees are guaranteed enrollment, regardless of medical history) is significantly more expensive than individual health insurance (medical underwriting applies until 2014 when the guaranteed issue provisions of the ACA kick in). But since employers usually pay at least a chunk of the premiums, people aren’t generally aware of the full cost of group health insurance. In the individual market, that cost will be more transparent (subsidies – also created by the ACA – will be a significant help for a lot of families).

Any way you look at it, the claims expenses will be high once all health insurance is guaranteed issue. I would assume that individual health insurance premiums will start to look more like group premiums as the years go by. The goal of increasing premiums for late enrollees should be three-fold: To make the practice of waiting to purchase health insurance until one is sick seem less attractive; to make sure that there are enough total premium dollars collected to pay for the total claims submitted; and to make things as fair as possible for people who opt to have health insurance all the time, even when they’re perfectly healthy. Those people should not be paying the lion’s share of the total premiums.

I agree with Jason that if this model were used, it should be up to the carriers – with regulatory oversight – to set the premium adjustments rather than having the government set the prices. But I think that if we use this model to try to accomplish all three of those goals I outlined, the premium adjustments for late enrollees would have to be pretty significant.

Would Premiums Without A Mandate Really Only Be 2.4% Higher Than With A Mandate?

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[…] Keep in mind that all of those prices are based on the fact that the individual policies are medically underwritten (which means that the rates can be increased during underwriting or the application can be denied based on medical history), while the group plans are guaranteed issue and the rates cannot vary based on the group’s health status. There’s a huge range of options available, both in the individual and small group markets. But the premiums in the small group market for our family of four (parents in their 30s with two young children) would be roughly double what they are in the individual market.

Although I realize that the RAND study is important and useful, I wonder why the real-life scenario of individual versus small group premiums is so different. And although the ACA does put a cap on how much greater premiums can be for older people versus younger people, it doesn’t stipulate what the base premiums have to be for the younger people. Premiums have to follow the MLR rules (with insurers spending at least 80 – 85% of premiums on medical expenses), but they will reflect claims expenses pretty closely. […]

A Visual Of Our Healthcare Spending

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[…] This RAND Corporation infographic paints a pretty clear picture of how healthcare costs have increased over the past decade (specifically, the data refers to 1999 – 2009). Healthcare spending nearly doubled in that time frame, from $1.3 trillion to $2.5 trillion, but the second graphic shows how our complicated method of paying for healthcare makes it harder for the average family to see how their own healthcare costs have been impacted. The last graphic in the series shows what the average family could have done with the extra $2880 they would have had in 2009 if healthcare costs had grown during the 2000’s at the same rate they did in the 1990’s (GDP + 1%). Given how cash-strapped a lot of families have been for the past few years, I’m sure an extra three grand could have made a big difference. […]

HHS Allowing States To Define Essential Benefits In The Exchanges

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[…] Colorado already has a comprehensive small group benefits mandate. Until this year, one of the most glaring differences between small group and individual plans was that individual policies in Colorado were not required to cover maternity. But that changed in January when all new and renewing individual policies had to begin covering maternity. I would say that the primary difference now between most of the individual plans and small group plans in Colorado is that the small group policies are guaranteed issue, whereas the individual plans are medically underwritten. But in 2014, when the exchanges get underway, the individual policies will be guaranteed issue too. Individual policies are still quite a bit less expensive than group policies in Colorado, but I wonder if that will change too once the exchanges get underway? It would seem so, since the benefits and underwriting will be virtually identical.

The small group market in Colorado is already quite structured by state mandates. The individual market also has quite a few mandates, including the new maternity benefit mandate. But it appears that the individual policies that are sold in the exchanges beginning in 2014 will have benefits at least as comprehensive as the benefits offered by the largest small group plans in Colorado. That means that “bottom of the heap” individual plans (ie, the ones with tons of fine print and huge holes in their coverage) probably won’t be making an appearance in the exchange, or at least not without a serious overhaul. […]

Access To A Mini-Med Group Plan Does Not Prevent CoverColorado Enrollment

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[…] The person I spoke with at CoverColorado checked with a supervisor and then told me that mini-meds are an exception to CoverColorado’s rule banning eligibility for people who have access to group health insurance. In order to qualify, the applicant has to provide the usual proof of eligibility along with proof that their employer’s group health plan is a mini-med. This can be the declarations page from the policy or marketing materials for the plan (which now have to include language indicating that the plan has been granted a waiver by HHS and does not meet the minimum benefit requirements defined by the PPACA).

Hopefully this will clarify things for others in a similar situation. Normally, access to a group health insurance policy (even if it’s one you don’t like or your doctor isn’t on the network, etc.) makes a person ineligible for CoverColorado. But if that group plan happens to be a mini-med and you also meet the other eligibility criteria for CoverColorado, you can submit an application to CoverColorado.

Will Large Groups Encourage Sick Employees To Seek Coverage In The Exchanges?

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[…] Amy Monahan suggested that there could be a law making employees ineligible for coverage in the exchanges if they are eligible for employer group coverage. Or there’s the possibility of a law similar to the one that Colorado designed to protect the state’s high risk pool from a similar scenario – employers here can’t reimburse employees for individual health insurance premiums if they have had a group plan in place within the past twelve months (in the case of the exchanges, they could make employees ineligible for coverage in the exchanges for at least a year after leaving a group plan, assuming they are still eligible for coverage under the group plan and have just opted out). Either option would help to protect the exchanges, but they don’t do much to prevent employers from structuring their health insurance policies to make healthcare significantly more expensive for the sickest employees. […]
A lot of this remains to be seen. The health care reform law still has to be reviewed by the Supreme Court, and we have a major election cycle next year and another full legislative year after that. But if everything about the PPACA remains as it is now, lawmakers will eventually have to address the possibility of self-insured employers designing health insurance plans that encourage their sickest employees to opt for coverage in the exchanges instead.

Access To Healthcare In Colorado Worsening

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The Colorado Health Access Survey results were released earlier this month, and the results aren’t particularly surprising given the state of the economy for the past few years. The total number of uninsured Colorado residents is now 829,000 – up from 678,000 in 2009. The survey also counts the number of “underinsured” residents (those who aren’t able to afford their out-of-pocket expenses that total more than 10% of their income, or 5% for those below the poverty line). The two categories – uninsured and underinsured – amount to 1.5 million people, which is about a third of the Colorado population.

The 22% increase in the number of uninsured residents came despite strong efforts in Colorado to expand access to Medicaid and CHP+ over the past few years. Without the expansion of those programs, the numbers would undoubtedly be even more bleak. […]

Employer Funding Of Individual Health Insurance Varies By State

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Over the past several months, I’ve written a few articles about the legality of employer reimbursement of individual health insurance premiums in Colorado. Our friend and fellow blogger Hank Stern (writing at InsureBlog) found the changes interesting, and noted that the laws surrounding employer reimbursement of premiums vary quite a bit from one state to another (he’s in OH).

Hank and I wrote a joint post about the topic, which he published last week on InsureBlog. Here’s Hank’s description of how the law works in OH (regular readers will note that it’s similar to how things used to be here in Colorado, before HRAs became a major issue, and of course before SB19 passed earlier this year). […]

Employer Reimbursement Of Premiums Causing Applicants To Be Declined

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[…] I know that the law was written with good intentions, but we’re noticing that it’s the employees – the applicants who are trying to get individual health insurance policies – who get the short end of the stick. It’s the employees who end up getting their health insurance application declined. It’s the employees who end up having to pay for their own premiums in order to obtain coverage, even if they thought that they were going to be able to rely on some level of reimbursement from their employer.

Real-Time Tracking Of Healthcare Costs

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[…] Obviously we have to avoid cutting corners just for the sake of lowering costs at the expense of patient outcomes (again, including patient outcomes when we compare the cost data would help to prevent this problem). But I have no doubt that there are other healthcare expenses that could be eliminated without compromising patient outcomes. In many cases, the providers might just be unaware of the actual costs that are being incurred – Dr. Fogelson’s idea for a real-time digital tracker would help to keep cost in the front of everyone’s mind.

Conflicting Data Regarding Medical Costs

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[…] These numbers are much more in line with the rise in health insurance premiums that we’ve seen over the past few years. I have no explanation for why the data from the two sources is so dramatically different in terms of medical trend in 2010, but if the trend was really closer to 7.5% rather than 1.7%, the health insurance premium increases would be a lot easier to understand. […] In addition to the MLR rules, some states (including Colorado) have implemented strict review processes for rate hikes. The ACA now calls for insurers who propose a rate hike of 10% or more […]

Stuck In A Mini-Med

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[…] So he applied for an individual policy with Anthem Blue Cross for his family, and was approved. But then when he tried to cancel his mini-med plan, his employer told him that he couldn’t cancel it until the open enrollment period next April. It would seem that trapping enrollees into a year-long contract with a mini-med plan is not in line with the spirit of the HHS guidelines that call for full disclosure regarding the waivers and directives to steer enrollees towards healthcare dot gov if they are interested in getting a policy that does comply with the ACA rules regarding annual policy limits. […]

The Challenge Of Creating Unbiased Health Insurance Exchanges

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[…] In order to attract high-quality health insurance carriers to the exchanges, we have to make sure that the exchanges represent a business environment that is appealing to carriers. We also have to make their appealing and fair to consumers, in order to attract enough people into the exchanges. To work well, the exchanges will need to have a delicate balance between the interests of consumers, providers, and health insurer carriers, with no one group more heavily favored than another.

HHS Guidelines For Women’s Healthcare

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HHS today announced new PPACA guidelines pertaining to women’s health, listing several services that must be covered by health insurance plans with no cost sharing by the insured. In scrolling through healthcare news this morning, I saw numerous headlines stating that birth control and breast pumps must be covered by health insurance with no copays. This is true, but the requirements don’t take effect for another year (August 1, 2012) and will apply to new policies that begin on or after that date. […]

Employer Funding of Individual Health Insurance – The Rules Are Changing

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[…] Because of the new law, employers can now use wage adjustments to reimburse employees for individual policies (as long as they haven’t had a group policy in the past twelve months), which wasn’t allowed at all in the past. But the use of HRAs to fund individual policies can now only be done if the employer hasn’t had a group policy in the past twelve months, and that restriction wasn’t found in the DOI final agency order regarding HRAs. […]

Health Insurance Does Not Always Prevent Medical Debt

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[…] Chances are, if you have a claim on your home or auto policy, it will be because of a one-time incident like a fire or a car accident. That can be the case with a health claim too, of course, but many times a large claim on a health insurance policy can be the result of a chronic condition or one that will need extensive long-term treatment. A person might have health insurance at the start of the ordeal, but may lose coverage as time goes on […]

Biased Language In Employer Health Insurance Survey

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[…] Overall, the survey is very thorough, the questions are mostly objective, and the data obtained from 1300 employers is no doubt a useful barometer of current employer attitudes towards health care reform. But I imagine that if the sentence about assuming that exchanges will make individual health insurance easy and affordable had not been included, the number of employers who said that they plan to drop their group plans might not have been so high. Time will tell.

Handling Income And Job Fluctuations Under The PPACA

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[…] There’s no simple answer to all of this. We’re trying to create a somewhat universal health insurance system based on a conglomeration of government-run health insurance, private coverage from hundreds of carriers, eligibility for coverage that is tied to employment and state of residence, and also based on income levels… of course it’s going to get complicated. Hopefully the suggestions raised by this report will help to guide regulations that will ensure health insurance coverage that is as gap-free as possible for most Americans.

DOI Report On Small Group Coverage In Colorado

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The Colorado Division of Insurance recently released the 2010 small group market report. The number of employers in Colorado offering small group health insurance dropped by 10% compared with 2009, and the number of Colorado residents with small group health insurance coverage dropped by 7%. The report contains comprehensive data on the availability of coverage, carriers in the small group market, pricing, and how the rating flexibility laws have impacted the market. […]

CHP+ Premiums Will Result In More Uninsured Kids

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[…] However, the real world is not always ideal. The Post editorial makes some very good points, and I don’t doubt that if CPH+ moves to a monthly premium system this summer, there will be some kids who lose their coverage, and fewer children will enroll in the future compared with how many would have enrolled if monthly premiums were not part of the deal. […]

HHS To Stop Accepting Early Retiree Reinsurance Applications After May 5, 2011

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[…] Although the program has proven quite popular – as of last month, HHS had approved approximately 5850 applications – one of the concerns from the beginning was that the $5 billion allocated to the ERRP might not be sufficient to last until 2014. HHS said from the start that they would only accept applications as long as they had enough available funding. They have now announced that they will not accept any new applications after May 5, 2011. […]

Spending Caps Will Help Individual Families But Won’t Reduce Overall Costs

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[…] But although the spending caps will be beneficial to families that have large medical expenses, they do nothing to actually address the rising cost of health care, and the over-utilization that is also driving costs. This has been a recurring theme with a lot of the provisions created by health care reform: we’re finding ways to spread the costs in a more equitable fashion, but we’re not really addressing the fact that the total cost burden of health care in this country isn’t sustainable on its current trajectory, no matter how much we spread it out across the population.

High Deductible Plans And Reduced Spending

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[…] Most of us agree that we need to find a way to reduce overall healthcare spending, but we also need to make sure that we don’t compromise future healthcare outcomes in the process. While some of the issues mentioned in the study – such as the drop in routine blood tests for people with diabetes – are definitely concerning, we shouldn’t simply assume that a reduction in overall preventive care will automatically lead to poorer health in the future.

Senate Bill 200 Begins The Process Of Creating Colorado Exchange

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[…] Senate Bill 200 (the Colorado Health Benefit Exchange Act), co-sponsored by Senator Betty Boyd (D – Lakewood) gets the ball rolling on the health insurance exchange that the state will have to have in place by 2014. Specifically, the bill would create a “nonprofit unincorporated public entity known as the Health Benefit Exchange”. It includes guidelines for the appointment of a 12-member board of directors (9 of whom will be voting members) who will oversee the exchange, and lays out their responsibilities. […]

New CoverColorado Provider Fee Schedule

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As of April 1, 2011, CoverColorado will be switching to a new fee schedule for reimbursing providers. In the past, CoverColorado has used the Rocky Mountain Health Plans provider network, and doctors were paid according to the RMHP network-negotiated rates when they treated CoverColorado members. The new CoverColorado-specific fee schedule applies to any provider who treats a CoverColorado member, regardless of whether that provider is part of the RMHP network or not. […]