2017 Renewal of Individual and Family Medical Plans

Insurance companies are mailing renewal information for individual and family policies, both benefit and premium changes. Some of the benefit changes are positive, some are not but most of these changes are dictated by The Affordable Care Act (ACA) commonly referred to as Obamacare. In most cases the premium increases are very substantial. I do not have complete rates for all the insurance companies as of yet.

Changes for 2017 cannot be made until November 1st for an effective date of January 1, 2017.

The individual health insurance market is shrinking. I will be setting phone appointments to begin on November to review plans. I strongly encourage that you to contact me. If you want to set a phone appointment with me, please respond to this e mail now and I will send you dates and times as options beginning in November.

Before your phone appointment, I will need to know the exact spelling of the names of doctors you want to continue to see, including their zip code. I will also need the exact spelling of any medications you need and the dosage.

If you believe you may be eligible for a subsidy through Covered California, I need to know your Estimated Modified Adjusted Gross Income for 2017. If you do not report a 2017 amount, I cannot complete a Covered California application as it will not be accepted into their system. I would encourage you to have a discussion with your tax professional. I need this information at the time of a phone appointment.

Some Grandfathered plans will be discontinued in 2017, we need to discuss replacement of those plans.

Blue Shield of California Individual and Family Plan 2017 Renewal

Blue Shield of California will be mailing your renewal information, both benefit and premium changes. Some of the benefit changes are positive, some are not but most of these changes are dictated by The Affordable Care Act (ACA) commonly referred to as Obamacare. In most cases the premium increases are very substantial. I do not have complete rates for all the insurance companies as of yet but I am told the rate increases will be much the same.

Here is what needs to be done:

Changes for 2017 cannot be made until November 1st for an effective date of January 1, 2017. You have to wait until November 1st.

The individual health insurance market is shrinking. I will be setting phone appointments to begin on November 1st to review your plan. I strongly encourage you to contact me. If you want to set a  phone appointment with me, please respond to this e mail and I will send you dates and times as options.

Before your phone appointment, I will need to know the exact spelling of the names of doctors you want to continue to see, including their zip code. I will also need the exact spelling of any medications you need and the dosage.

If you believe you may be eligible for a subsidy through Covered California, I need to know your Estimated Modified Adjusted Gross Income for 2017. The 2016 guide is attached for reference. The 2017 figures should be very close. If you do not report a 2017 amount, I cannot complete a Covered California application as it will not be accepted into their system. I would encourage you to have a discussion with your tax professional. I need this information at the time of a phone appointment.

Some Grandfathered plans will be discontinued in 2017, we need to discuss replacement of those plans.

 

Anthem Blue Cross Individual and Family Plan 2017 Renewal

Anthem Blue Cross is mailing your renewal information, both benefit and premium changes. Some of the benefit changes are positive, some are not but most of these changes are dictated by The Affordable Care Act (ACA) commonly referred to as Obamacare. In most cases the premium increases are very substantial. I do not have complete rates for all the insurance companies as of yet but I am told the rate increases will be much the same.

Here is what needs to be done:

Changes for 2017 cannot be made until November 1st for an effective date of January 1, 2017. You have to wait until November 1st.

The individual health insurance market is shrinking. I will be setting phone appointments to begin on November 1st to review your plan. I strongly encourage you to contact me. If you want to set a  phone appointment with me, please respond to this e mail and I will send you several dates and times as options.

Before your phone appointment, I will need to know the exact spelling of the names of doctors you want to continue to see, including their zip code. I will also need the exact spelling of any medications you need and the dosage.

If you believe you may be eligible for a subsidy through Covered California, I need to know your Estimated Modified Adjusted Gross Income for 2017. The 2016 guide is attached for reference. The 2017 figures should be very close. If you do not report a 2017amount, I cannot complete a Covered California application as it will not be accepted into their system. I would encourage you to have a discussion with your tax professional. I need this information at the time of a phone appointment.

Grandfathered plans probably will not receive a benefit change or a rate increase. If your plan is grandfathered, feel free to set an appointment with me.

If you have questions, please send an e mail.

2017 Individual and Family Medical Plans Require a Primary Care Physician

Beginning January 1, 2017 all individual and family health plans in California will require that members select a Primary Care Physician (PCP) or have one recommended by their health plan.

The terminology used in this case is confusing. A PCP has historically been a physician who is associated with an HMO which limits your choice. This is not the case in this instance.

You must choose a general physician who is in the network of your insurance company. If you do not choose a physician the insurance company will assign one to you. I know that at least one company will review your claims history in order to assign a physician that you have seen in the past.

YOU DO NOT EVER NEED TO SEE THE PHYSICIAN CHOSEN

YOU CAN CHANGE THE PHYSICIAN AT ANY TIME

The thought behind this is that if one is attached to a name of a physician, it is less likely that one will go to Urgent Care or the Emergency Room. An office visit or a phone call supposedly will lower health care spending.

In Summary, choose a physician or have one chosen for you.

2017 Open Enrollment for Covered California Individual and Family Plans

Although no official date has been sent as of yet, this is what is expected from Covered California:

You will receive information from Covered California asking you to update information that will include but not limited to:

 

change in modified adjusted gross income- this requires a discussion with your tax professional

change of address

change in marital status

change in the number of dependents in your house hold

please respond to all Covered California requests

Changes might require a new application.

If there are no changes and your income listed on your Covered California application will remain the same for 2017, your policy will passively renew unless you decide to make a change, for example, enroll with a different insurance company.

 

This year there will be premium increases, changes in benefits which are influenced by Affordable Care Act rules and changes that have been made as a result of insurance company decisions.

Keep in mind that your 2016 subsidy has been based on the Modified Adjusted Gross Income that was listed on your Covered California application. Covered California will issue you an IRS form 1095 A to be filed with your 2016 tax return which will then be reconciled with your income. You may receive a tax credit or debit depending on your actual income.

Covered California has not determined when Open Enrollment will begin. In all likelihood it will be November 1st. As soon as I know the exact date I will send you an e mail. I will be setting up phone appointments to begin during Open Enrollment. If you would like to review your policy please let me know.

Remember, your 2016 subsidy is related to your 2016 Modified Adjusted Gross Income. Covered California will send you a 1095 A IRS form to be filed with your taxes. Your subsidy will be adjusted with your taxes depending on whether your income is more or less than what was reported on the enrollment application with Covered California.

Open Enrollment for 2017 Individual and Family Medical Plans

Open Enrollment begins on November 1, 2016 for an effective date of January 1, 2017.

Your insurance company may have sent you the renewal rate for your plan, however, rates in their entirety have not been published and are not available.

You cannot take any action until November 1st.

During the middle of October, send me an e mail to set up a phone appointment between November 1st and December 15th.

Rate Increases for 2017 Medical Insurance Plans

There will be a significant rate increase for 2017 plans. The reasons given are the end of funding that was available in the first three years to offset rates, the rise in specialty medication and claims from those who enroll during Special Enrollment Periods.

In regard to the specialty medication, sometimes pharmaceutical companies are raising prices of medications when the need for a medication increases. Newer specialty medications can approach $100,000 per course of treatment and/or per year.

Below is the press release from Covered California on July 19, 2016

SACRAMENTO, Calif. — Covered California unveiled its rates for 2017 on Tuesday and announced that some health insurance plans will be expanding into new areas throughout the state to compete for consumers in California.

The statewide weighted average change will be 13.2 percent, up from approximately four percent in each of the last two years. However, most consumers will see a much smaller increase — or pay less next year — if they switch to another plan.

“Shopping is going to be more important this year than ever before,” Covered California Executive Director Peter V. Lee said. “Almost 80 percent of our consumers will either be able to pay less than they are paying now, or see their rates go up by no more than 5 percent, if they shop and buy the lowest-cost plan at their same benefit level. That’s the power of shopping.”

Lee said the opportunities to shop and save show that California has succeeded in building a competitive marketplace for health insurance, with rate increases that are still below trends in the individual market before the Affordable Care Act was passed.

“This is a new era of health care, where the consumer is in the driver’s seat with the power to look easily for a better deal, and where subsidies help absorb the impact of rate changes,” Lee said. “These options did not exist before the Affordable Care Act.”

Some consumers who choose to keep their plan will see a significant increase in their premium for 2017, while others will see a more modest increase, depending on where they live and what insurance plan they have. Consumers will begin receiving notices in October, when they will have an opportunity to review their new rates and change plans for their 2017 health coverage.

For many of those insured, the bulk of the premium increase will be absorbed by the subsidy paid by the government to help enrollees buy health insurance. Approximately 90 percent of Covered California enrollees get help to pay for their premiums. The average subsidy covers roughly 77 percent of the consumer’s monthly premium, and while premiums will rise, the subsidies will rise as well.

“Even though the average rate increase is larger this year than the last two years, the three-year average increase is 7 percent — substantially better than rate trends before the Affordable Care Act was enacted,” Lee said.

Lee said the average rate increase reflects the cost of medical care for consumers, not excessive profit.

“Under the new rules of the Affordable Care Act, insurers face strict limits on the amount of profit they can make selling health insurance,” Lee said. “So, while all plans are experiencing different cost pressures, we can be confident their rate increases are directly linked to health care costs, not administration or profit, which averaged 1.5 percent across our contracted plans.”

For consumers who get a tax credit to lower their costs — which is about 90 percent of those who sign up through Covered California — the amount they pay is impacted not only by the premium choice, but by changes in their tax credit. While the average rate increase is higher than past years, Covered California’s risk mix — the ratio of consumers who are healthy vs. sick — remains one of the best in the nation according to the Centers for Medicare and Medicaid Services (https://www.cms.gov/CCIIO/Programs-and-Initiatives/Premium-Stabilization-Programs/index.html).

Other reasons for rate increases include:
A one-year adjustment due to the end of a funding mechanism in the Affordable Care Act known as reinsurance, which was designed to moderate rate increases during the first three years when exchanges were being established. The American Academy of Actuaries estimates this will add between 4 percent and 7 percent to premiums for 2017.
Special enrollment by some consumers who may be enrolling in health insurance only after they become sick or need care, which seems to have had a significant impact on rates for two insurance plans.
The rising cost of health care, especially specialty drugs.
Pent-up demand for health care now being accessed by those who were locked out of the health care system before the Affordable Care Act was enacted.
Lee said Covered California is working to address some of these issues on multiple fronts. The exchange is aggressively marketing to attract healthy consumers year-round, and it is working to ensure special enrollment is available only to those who meet qualifying circumstances. It is also sampling the special enrollment population to better understand how to make any further improvements needed.

“We work hard to build a robust exchange that drives competition by attracting as many consumers as possible,” Lee said. “Now, consistent with the vision of the Affordable Care Act, we will redouble our efforts to make sure our consumers and potential consumers understand the importance of signing up during open enrollment and remaining covered throughout the year.”

Lee said Covered California’s 11 health insurers are competing across the state for its 1.4 million members.

“The sheer number of enrollees and their overall health means consumers in the individual market are benefiting from competition,” Lee said.

Below is the complete list of the companies selected for the 2017 exchange:
Anthem Blue Cross of California
Blue Shield of California
Chinese Community Health Plan
Health Net
Kaiser Permanente
L.A. Care Health Plan
Molina Healthcare
Oscar Health Plan of California
Sharp Health Plan
Valley Health Plan
Western Health Advantage
Rate details by pricing regions can be found in “Covered California’s Health Insurance Companies and Plan Rates for 2017,” posted online at:http://coveredca.com/news/pdfs/CoveredCA-2017-rate-booklet.pdf

The preliminary rates are subject to a 60-day public comment period and regulatory review by the California Department of Managed Health Care. In addition, the California Department of Insurance will review Health Net’s EPO.

Some insurance carriers will be increasing their coverage areas in 2017:
Oscar will be entering the market in San Francisco, Santa Clara and San Mateo counties.
Molina will expand into Orange County.
Kaiser will be available in Santa Cruz County.
With the expansion of its current carriers, almost all consumers (92.6 percent) will be able to choose from three or more carriers, and all will have at least two to select from.

In addition, more than 93 percent of hospitals in California will be available through at least one Covered California health insurance company in 2017, and 74 percent will be available in three or more plans.

Covered California also is improving its patient-centered benefit designs by increasing a consumer’s access to care by reducing the number of services that are subject to a consumer’s deductible.

Starting in 2017, consumers in Silver 70 plans will save as much as $55 on an urgent care visit and $10 on a primary care visit. In addition, consumers in Silver, Gold and Platinum plans will pay a flat copay for emergency room visits without having to satisfy a deductible, which could save them thousands of dollars.

These improvements build on features already in place that ensure most outpatient services in Silver, Gold and Platinum plans are not subject to a deductible, including primary care visits, specialist visits, lab tests, X-rays and imaging. In addition, some Enhanced Silver plans have little or no deductible and very low copays, such as $3 for an office visit. Even consumers in Covered California’s most affordable Bronze plans are allowed to see their doctor or a specialist three times before the visits are subject to the deductible.

In addition, the contract with health insurers for 2017 ensures consumers select or are provisionally assigned a primary care physician within 60 days of effectuation so they have an established source of care.

“Health care reform isn’t just about making insurance affordable, it’s about doing things to make it easier for consumers to get the right care at the right time,” Lee said.

In May, the Centers for Disease Control and Prevention announced that California’s uninsured rate had fallen to 8.1 percent at the end of 2015, down from 17 percent at the end of 2013, right before the Affordable Care Act began offering coverage.

“We can all be very proud of the extraordinary gains we have made in reducing California’s uninsured rate to a historic low,” Lee said.

About Covered California
Covered California is the state’s marketplace for the federal Patient Protection and Affordable Care Act. Covered California, in partnership with the California Department of Health Care Services, helps individuals determine whether they are eligible for premium assistance that is available on a sliding-scale basis to reduce insurance costs or whether they are eligible for low-cost or no-cost Medi-Cal. Consumers can then compare health insurance plans and choose the plan that works best for their health needs and budget. Small businesses can purchase competitively priced health insurance plans and offer their employees the ability to choose from an array of plans and may qualify for federal tax credits.

Covered California is an independent part of the state government whose job is to make the new market work for California’s consumers. It is overseen by a five-member board appointed by the Governor and the Legislature. For more information about Covered California, please visit www.CoveredCA.com.

This article is from the Los Angeles Times date July 20, 2016

California Obamacare rates to jump

Premiums are set to go up an average of 13.2% next year. Rising medical costs are one reason, officials say.

BY MELODY PETERSEN AND NOAM N. LEVEY

Premiums for Californians’ Obamacare health coverage will rise an average of 13.2% next year — more than three times the increase of the last two years and a jump that is bound to stir debate in an election year.

The big increases come after two years in which California officials had boasted that the program helped insure hundreds of thousands people in the state while keeping costs moderately in check.

Premiums in the insurance program called Covered California rose just 4% in 2016 after rising 4.2% in 2015 — the first year that exchange officials negotiated with insurers. The program insures 1.4 million Californians.

On Tuesday, officials blamed next year’s premium hikes in the program on rising costs of medical care, including expensive specialty drugs and the end of a mechanism that held down rates for the first three years of Obamacare.

Two of the state’s biggest insurers — Blue Shield of California and Anthem Inc. — asked for the biggest hikes. Blue Shield’s premiums will jump an average of more than 19%, according to officials, and Anthem’s rates will rise more than 16%.

For consumers, the effect will depend on whether they get taxpayer-supported subsidies for their premiums and whether they are willing to switch to less-expensive plans that may come with higher co-pays and deductibles. Changing plans could also mean a new network of physicians, which could be disruptive to care for those with chronic conditions.

The rates vary significantly by region and insurer. Los Angeles and the rest of southwest Los Angeles County will see an average increase of almost 14%.

Blue Shield’s preferred provider organization rate in Los Angeles, chosen by 21% of those using the exchange, is increasing by an average of 19.5%. For a 40-year-old single person making $17,820 to $23,760, choosing a silver level plan, the monthly rate currently is $122, while the government pays Blue Shield $196. Next year that same person would pay $170, while the government would chip in $211 a month.

“We’re paying more for less,” said Jamie Court, president of Consumer Watchdog in Santa Monica. “Insurers are limiting access to doctors and hospitals while also demanding a higher price.”

Horacio Chavez, 34, of Boyle Heights said he made less than $25,000 last year as an education coordinator at a youth center. He currently pays a $100 premium for a Covered California plan that he uses for an annual checkup and a safety net in case of emergencies.

“I do want healthcare — I want the peace of mind that if anything happens to me that there’s some kind of coverage,” Chavez said. But “a 13% hike … that’s going to affect people.”

He said he’s already barely making ends meet trying to pay his rent, student loans from the University of Chicago, car payments and his health insurance premium.

“I’m already living check to check,” Chavez said.

Covered California officials defended the system Tuesday, saying that the competition among insurers offering coverage on the exchange was working to keep rates lower than they otherwise would be.

“California has a very competitive marketplace,” said Peter Lee, executive director of Covered California.

Obamacare has significantly reduced the number of uninsured Californians. Since the state’s health insurance exchange began offering coverage in 2014, the share of Californians without health insurance has fallen from 17% at the end of 2013 to 8.1% at the end of last year, according to officials.

Rates are expected to jump in other states too, although complete details won’t be available until later this year.

An analysis of 14 metro areas that have already announced their 2017 premiums found an average jump of 11%. The changes ranged from a decrease of 14% in Providence, R.I., to an increase of 26% in Portland, Ore., according to the analysis by the nonpartisan Kaiser Family Foundation.

The federal healthcare-  .gov   exchange provides insurance under the Affordable Care Act in 38 states. California and a few other states operate their own exchanges.

Around the country, several insurers, including giant UnitedHealth, have stopped selling health plans on the exchanges, and a number of new nonprofit health insurance co-ops have gone out of business.

Those decisions have fueled charges from the law’s critics that Obamacare isn’t working.

Former Secretary of State Hillary Clinton, the presumptive Democratic presidential nominee, is pushing a number of specific steps to ease price pressure on consumers, including allowing Americans ages 55 to 64 to buy into Medicare.

Republican presidential nominee Donald Trump has argued the health law should be repealed.

The health law’s next enrollment period begins a week before election day.

The state and federal health insurance exchanges provide coverage to about 12 million people nationally, representing just a fraction of the nation’s total insurance market. The vast majority of Americans — more than 250 million people — are in health plans purchased through an employer or provided by a government plan such as Medicare or Medicaid.

But the exchanges are a pillar of the Affordable Care Act’s program for guaranteeing Americans’ insurance coverage. And monthly premiums have become a closely watched barometer of how the law is performing.

Covered California’s Lee told the House Ways and Means Committee on July 12 that 2017 would be “a transitional year” for Obamacare, with rates seeing “significant adjustments” across the nation.

He said one reason for the increase was the end of a program designed to keep rates down during the insurance exchange’s first three years. The program had assessed a fee on all health insurers and then redistributed those funds among carriers whose members had the highest medical expenses, Lee said.

Lee added that some insurers had also not charged enough in the first two years because they didn’t have full data on the medical costs or health status of those signing up. Now they’re adjusting to account for those higher costs.

Mia Campitelli, a Blue Shield spokeswoman, said Tuesday that the insurer’s average 19.9% premium increase was “driven by our members using more healthcare services than we expected,” as well as the phaseout of the federal mechanism that had kept rates down in the law’s early years.

Anthem spokesman Darrel Ng said: “Factors such as increased use of medical services and added costs of drugs and medical therapies put upward pressure on rates and underscore the additional work that needs to be done to moderate the growth in healthcare costs.”

The financial pain for most Californians getting insurance through the exchange will be muted because 90% get taxpayer assistance to cover the premiums.

Americans making less than four times the federal poverty level — about $47,000 for a single adult or $97,000 for a family of four — qualify for the assistance.

Nonetheless, Americans who make too much to qualify for subsidies are likely to feel the brunt of the higher premiums. That will probably increase pressure on the new president — Democrat or Republican — to review the exchanges in 2017 for ways to make health plans more affordable.

A year ago, Lee wrote an op-ed in The Times saying that Covered California’s power in negotiating with insurers was allowing Obamacare to work in the state.

“We now have the full picture in California, where we are proving that health insurance exchanges can keep prices in check,” he wrote.

Though the Affordable Care Act has improved care for millions of Americans — for example, insurance companies can no longer set lifetime limits on care or exclude anyone because of a preexisting condition — the 6-year-old law contains few controls on overall costs.

Spending on the country’s medical system averages more than $10,000 for every American, according to statistics released by the Obama administration this month, far higher than any other nation. melody.petersen

@ latimes.com   noam.levey@latimes.com   Times staff writer Soumya Karlamangla contributed to this report.

RICH PEDRONCELLI Associated Press

“CALIFORNIA has a very competitive marketplace,” said Peter Lee, executive director of Covered California. Above, Lee discusses the program last year.

Blue Shield Will Cancel All Grandfathered Plans On January 1, 2017

Your Blue Shield of California Grandfathered Individual and Family Medical Insurance Plan will no longer be available after December 31, 2016. You will be automatically enrolled in what Blue Shield considers to be an Affordable Care Act (aka Obamacare) plan that is similar to your current plan.

Starting January 1, 2017 you will qualify for a Special Enrollment Period which will allow you to switch to another company with an effective date of no later than March 1, 2017. Using the Special Enrollment Period may not necessarily be in your best interest, for example, if you use part of a Blue Shield deductible between January 1, 2017 and March 1, 2017, this amount may not carry over to another company. A similar situation may exist with the Maximum Out of Pocket limit.

We should discuss your plan change within Blue Shield or to another company during Open Enrollment which begins on November 1, 2016 for an effective date of January 1, 2017. I will be sending an e mail in the middle of October to set up phone appointments to discuss all your options.

Blue Shield will be notifying you beginning this month.

 

 

Strengthening the Marketplace – Actions to Improve the Risk Pool

Below are recommendations from the Centers for Medicare and Medicaid Services. The goal is to improve the risk pool and therefore rates and benefits for Affordable Care Act Plans.

It is noteworthy to read the information on Short Term Medical Plans below which might cause discontinuation of these plans.

Date

2016-06-08

Title

Strengthening the Marketplace – Actions to Improve the Risk Pool

Contact

press@cms.hhs.gov

Strengthening the Marketplace – Actions to Improve the Risk Pool

With millions of Americans insured through the Health Insurance Marketplaces, it’s clear that Marketplace coverage is a product consumers want and need and an important business for insurers, with several major issuers expanding their Marketplace presence.  At the Department of Health and Human Services (HHS), we are constantly monitoring the health of the Marketplace and are always looking to make improvements that benefit both consumers and issuers. Over the past several months, HHS has taken a series of actions to strengthen the Marketplace risk pool, limit upward pressure on rates, and ensure a strong Marketplace for the long term. We believe those actions are bringing positive results. As part of our continued commitment to the long-term strength of the Marketplace, we are announcing new measures to ensure that the Marketplace continues to provide affordable coverage for millions of Americans.

During the month of June, HHS will make three announcements regarding our ongoing efforts to: strengthen the risk pool by spreading the costs of care over a diverse mix of enrollees, work with issuers and state Departments of Insurance to improve coverage options, and step up Marketplace outreach, especially to young adults and uninsured families in advance of Open Enrollment 4.

Today, HHS is announcing a series of actions to strengthen the Marketplace risk pool. These actions include:

·         Curbing abuses of short-term plans that exploit gaps in current rules to use medical underwriting to keep some of the healthiest consumers out of the Affordable Care Act’s single risk pool.

·         Improving the risk adjustment program to more accurately reflect the cost of partial-year enrollees and to incorporate prescription drug utilization data that provide a more complete picture of enrollees’ health status. These improvements will ensure that the program continues to work as intended to compensate issuers with higher-risk enrollees and thereby help issuers sustainably serve all types of consumers.

·         Helping consumers who turn 65 make the transition to Medicare, so that older consumers are served by the program designed for them and their health needs.

·         Beginning full implementation of the Special Enrollment Confirmation Process, which ensures that eligible individuals continue to have access to coverage through Special Enrollment Periods (SEPs), but prevents people from misusing the system to enroll in coverage only if they get sick.

·         Continuing our efforts to reduce data-matching issues (DMIs). CMS outreach, education, and operational improvements have contributed to a sharp reduction in total data matching issues generated and an almost 40 percent year-over-year increase in documents submitted to help resolve income and citizenship and immigration data matching issues. Improving the resolution of DMIs benefits the risk pool because it keeps eligible consumers, often younger and healthier consumers less motivated to overcome obstacles such as extra paperwork, from losing coverage mid-year.

Risk Pool Actions

Curbing Abuse of Short-Term Limited Duration Plans
Short-term limited duration coverage is health care coverage issued for a short period of time.  Because short-term limited duration plans are designed to fill only very short coverage gaps, this coverage is not subject to any of the key rules governing the ACA’s single risk pool: they can be priced based on health status (medically underwritten), can discriminate against consumers with pre-existing conditions, and do not have to cover essential health benefits.  Some issuers are now offering short-term limited duration plans to consumers as their primary form of health coverage for periods that last nearly 12 months, allowing them to target only the healthiest consumers while avoiding consumer protections. As highlighted in recent press accounts, by keeping these consumers out of the ACA single risk pool, such abuses of limited duration coverage increase costs for everyone else, and they could have a greater impact over time if allowed to become more widespread.

Today, the Department of Labor, Department of Treasury, and Department of Health and Human Services (HHS) issued a proposed rule to revise the definition of short-term, limited duration coverage.  Under the new rules, short-term policies may be offered only for less than three months, and coverage cannot be renewed at the end of the three month period. The proposed rule also improves transparency for consumers by requiring issuers to provide notice to consumers that the coverage is not minimum essential coverage, does not satisfy the health coverage requirement of the ACA, and will not prevent the consumer from owing a tax penalty. The proposed changes will help strengthen the risk pool by ensuring that short term limited duration plans are used only as intended, to fill truly temporary gaps in coverage.

Maturing the Risk Adjustment Program
By reducing incentives for issuers to try to design products that attract a disproportionately healthy risk pool, risk adjustment lets them design products that meet the needs of all consumers, protecting consumers’ access to a range of robust options.  Updating risk adjustment to more accurately assess every enrollee’s risk makes it more effective in achieving this goal. Earlier this year, CMS made a number of changes to improve the stability, predictability, and accuracy of the risk adjustment program for issuers. These changes include better modeling of costs for preventive services, changes to the data update schedule, and earlier reporting of preliminary risk adjustment data where available.  We also published a Risk Adjustment White Paper and hosted a conference on March 31, 2016 to solicit feedback from issuers, consumers, and other stakeholders on additional areas for improvement.

Building off the Risk Adjustment White Paper and stakeholder feedback, today we are announcing two additional important changes to risk adjustment that we intend to propose in future rulemaking. First, we intend to propose that, beginning for the 2017 benefit year, the risk adjustment model include an adjustment factor for partial-year enrollees.  By more accurately accounting for the costs of short term enrollees in ACA-compliant risk pool, this change will support the Marketplace’s important role as a source of coverage for people who are between jobs, experiencing life transitions, or otherwise need coverage for part of the year.  Second, we intend to propose that, beginning for the 2018 benefit year, prescription drug utilization data be incorporated in risk adjustment, as a source of information about individuals’ health status and the severity of their conditions.  We are also considering proposing additional changes to the model for 2018 and beyond.

Transitioning Consumers to Medicare
The Marketplace serves as an essential backstop for consumers as they transition between different types of coverage over their lifetime.  For example, many early retirees access Marketplace coverage until they become eligible for Medicare when they turn 65.  But once individuals turn 65, most people should end their Marketplace coverage and switch to Medicare.  In fact, if consumers do not enroll in Medicare Part B when they turn 65, they could face financial consequences for years into the future, because they could owe higher Medicare premiums.  Meanwhile, the Marketplace is intended to serve consumers who are not Medicare eligible, and continued enrollment by individuals who are eligible for Medicare can raise costs for other consumers.

To make sure consumers understand the steps they need to take to move to Medicare, this summer the Marketplace will start contacting enrollees as they near their 65th birthday. This outreach will provide consumers with the information they need to enroll in Medicare if they are eligible and end their Marketplace coverage if they choose to.   This builds off the changes we made to the HealthCare.gov application this year which included new pop ups with reminders for consumers who are about to turn 65 that they may be eligible for Medicare.

Implementing the Special Enrollment Confirmation Process
Over the last several months, the Marketplace has taken a number of steps to ensure that Special Enrollment Periods (SEPs) are there for consumers when they need them while avoiding misuse or abuse.  We’ve strengthened our rulesand clarified our processes for SEPs, so that the people who need to can still easily get coverage, while making it hard for anyone thinking about taking advantage. We also eliminated 7 SEPs, including the SEP for individuals who paid the tax penalty for not having health insurance, contributing to an almost 30 percent year-over-year drop in the number of SEP enrollments during the three months after Open Enrollment.

Continuing that work, today we are announcing that, consistent with the process we announced in February, starting June 17 individuals enrolling in coverage through Special Enrollment Periods will be asked to provide certain documents. We are also providing models of the eligibility notices that consumers will receive with the list of documents that people enrolling through a Special Enrollment Period will need to prove their eligibility for their SEP. Consumers should provide the appropriate documents by the deadline listed in their notice to confirm eligibility for a Special Enrollment Period to avoid any disruptions to their coverage.

Reducing the Impact of Data Matching Issues
CMS takes very seriously its obligation to ensure that access to coverage and financial assistance are limited to those individuals who are indeed eligible.  The Marketplace verifies eligibility for most consumers through electronic trusted data sources, but if consumers’ data cannot be matched electronically we generate a data matching issue to request additional information from enrollees.  Consumers who do not provide the necessary information will have their coverage or financial assistance ended or modified.

Unfortunately, eligible individuals sometimes lose coverage or financial assistance through the Marketplace during the year because they have trouble finding documents or navigating the data matching process. In addition to the direct impact on consumers, avoidable terminations due to data-matching issues also negatively impact the risk pool, since younger, healthier individuals appear to be less likely to persevere through the data matching process. In fact, in 2015, younger open enrollment consumers who experienced a data matching issue were about a quarter less likely to resolve their problem than older consumers.

This year, CMS made a range of improvements to the data matching process to help consumers avoid generating data matching issues in the first place and to help them resolve these issues once generated.  More recently, we have also intensified our outreach, and partnered with issuers so that they are reaching out to consumers about data-matching issues as well. These efforts are beginning to pay off, with a sharp reduction in total data-matching issues generated and an almost 40 percent year-over-year increase in the number of documents consumers have submitted to resolve these issues. Continued progress in this area should benefit both directly affected consumers and other consumers who will benefit from a stronger risk pool.

 

Eliminating Confusing Health Plans

It has been my experience as an insurance broker that some insurance companies have far too many plan designs which are very confusing for the consumer. Hopefully changes will be adopted to make the process of choosing a plan more consumer friendly.
Below is a partial excerpt from Covered California’s Daily News, dated March 9, 2016 which discusses the issue.
________________________________________
New Analysis Urges Shift to Patient-Centered Benefit Designs to Cut Costs and Help Consumers Get Care
Posted: 09 Mar 2016 02:52 PM PST
Lessons Learned in California Can Help Avert a Collision Between Conflicting Reform Initiatives

SACRAMENTO, Calif. — A new analysis urges state-based marketplaces, the employer-sponsored insurance market and health insurance plans to take action and move toward plan benefit designs that put consumers first, and remove existing barriers to getting needed health care.
In an article written in the New England Journal of Medicine by Dr. Elliott Fisher, Director of The Dartmouth Institute for Health Policy and Clinical Practice, and Covered California Executive Director Peter V. Lee, both stress the importance of patient-centered benefit designs to reach the next level of health care reform.

“Health plans, states and employers should take to heart the lesson that offering a lot of different designs does not serve consumers well,” Fisher said. “Too many health plans, in exchanges and the employer sector, offer confusing benefit designs with out-of-pocket costs that prevent people from seeing their doctor.”

Lee said Covered California has a model that has worked for its consumers since the agency opened its doors in 2014.

“Covered California has led the way in the fight for consumers by shaping benefit designs that help consumers make apples-to-apples comparisons and to get the health care they need,” Lee said. “A good patient-centered benefit design is critical to making sure consumers get the right care at the right time.”

Fisher and Lee noted that the current health care system seeks to improve care and cut costs through provider-focused and consumer-focused reform initiatives that directly conflict with one another.
For example, provider-focused initiatives encourage physicians, hospitals and other providers to coordinate and improve care to lower costs. However, the consumer-focused approach discourages people from seeing their provider because of increased cost-sharing.

Studies show the proportion of Americans with employer-sponsored coverage involving deductibles of more than $1,000 has increased from 10 percent to 46 percent since 2006, with many plans requiring people to fully meet their deductible before receiving any coverage for primary care. A 2015 National Bureau of Economic Research study showed the adoption of a high-deductible health plan in a relatively high-income population led to a 10 percent reduction in the use of preventative services and an 18 percent drop in physician visits, with the greatest reductions occurring in the sickest patients.

“We want consumers to be able to see their doctor when necessary, so their health care needs can be met in the most effective and efficient way possible,” Fisher said.

The authors cite California’s approach as an example of how it might be possible to avoid this collision between provider- and consumer-focused efforts. Covered California, the state’s insurance exchange, requires plans to adopt patient-centered benefit designs that allow consumers at every metal tier (cost-sharing split between insurer and enrollee) to visit their primary care physician without the cost being subject to a deductible. “When a consumer is able to get the right care at the right time, it cuts down health care costs for everyone,” Lee said.

The Centers for Medicare and Medicaid Services recently announced it would allow health insurance companies to offer patient-centered benefit designs on the federal exchange.
“This is a good step for consumers,” Lee said. “However, more needs to be done if we are going to reach the next level in health care reform.”

The article, “Toward Lower Costs and Better Care – Averting a Collision between Consumer- and Provider-Focused Reforms,” is available atwww.nejm.org/doi/full/10.1056/NEJMp1514921.

About The Dartmouth Institute
Since 1988, The Dartmouth Institute for Health Policy and Clinical Practice has been working to find solutions to some of the most challenging problems in health care delivery. Our goal is to help create an affordable, high-performing health system for everyone.

About Covered California
Covered California is the state’s marketplace for the federal Patient Protection and Affordable Care Act. Covered California, in partnership with the California Department of Health Care Services, was charged with creating a new health insurance marketplace in which individuals and small businesses can get access to affordable health insurance plans. Covered California helps individuals determine whether they are eligible for premium assistance that is available on a sliding-scale basis to reduce insurance costs or whether they are eligible for low-cost or no-cost Medi-Cal. Consumers can then compare health insurance plans and choose the plan that works best for their health needs and budget. Small businesses can purchase competitively priced health insurance plans and offer their employees the ability to choose from an array of plans and may qualify for federal tax credits.

Covered California is an independent part of the state government whose job is to make the new market work for California’s consumers. It is overseen by a five-member board appointed by the governor and the Legislature.

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