April 11 – by Leila Morris
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IN CALIFORNIA
• Aetna Goes Ahead with Rate Increases
• Consumer Reports Organization to Review Rate Filings
• New Help For Consumers Who Are Struggling with Insurers
• Employee Attitudes Vary By Region
• Spanish-Language Healthcare Resource
HOME HEALTHCARE
• Home Healthcare Reduces Medicare Spending
• In Home Care Remains a Bargain
NEW PRODUCTS
• Long-Term Disability Rider
• Disability Plan Evaluation Tool
• Voluntary Universal Life
• Dental Plan
• Return-to-Work Services
MEETINGS & EVENTS
• Healthcare Exchanges to Be Discussed at SAHU Meeting
• Meeting in Anaheim
HEALTHCARE
• Health Care Costs to Increase Less Than 10%
• Support for Health Law Reaches a New Low
Aetna Goes Ahead with Rate Increases
The California Dept. of Insurance is complaining that, with this most recent increase, Aetna is hitting small employers with an average increase of 30.3% over the past 24 months. The Departments says that Aetna is increasing rates in excess of the U.S. Bureau of Labor’s medical cost inflation index.
Commissioner Dave Jones had asked Aetna to withdraw its April 1 health insurance rate increases for small employers, but the Commissioner does not have the authority to reject rate increases. Despite the request from the commissioner, Aetna has decided to implement the 1.8% average rate increases, which total an average 8% increase annually (with some receiving up to a 21.4% annual increase). Aetna files rate increases quarterly on its small employer policies.
The Department’s actuaries say that Aetna’s projections about medical cost increases are not supported by actual claims experience. The Department also says that the Aetna subsidiary that is selling health insurance in California made a 27.7% profit in 2011 and paid $1.7 billion in dividends to its parent company.
Jones said, “I am disappointed that Aetna has decided to reject my request to refrain from its latest health insurance rate increases on small employers, which are unreasonable and not justified by the company’s claims experience. Small employers are struggling in this economy and should not be hit with a 30% increase in just 24 months for health insurance for their employees. Like the recent unsustainable rate increases imposed by other health insurers on Californians, Aetna’s rate increase proves again that we need to close the loophole in California law which denies the Insurance Commissioner the authority to reject excessive health insurance rate hikes.”
Jones has authored three bills to give the Insurance Commissioner the authority to reject excessive health insurance rate hikes when he served in the State Assembly. As Insurance Commissioner, he has continued to fight to get this authority by sponsoring legislation, Assembly Bill 52, which is in the State Senate.
Consumer Reports Organization to Review Rate Filings
The California Department of Managed Health Care has awarded a $225,000 grant to Consumers Union to bolster the agency’s premium rate review program. The organization is the policy and advocacy arm of Consumer Reports. Consumers Union will provide consumer-focused feedback on health plan rate filings and develop ways to increase public engagement in health plan rate review.
DMHC Director Brent Barnhart said the partnership will help bolster accountability and transparency in health plan rate setting. Consumers Union will not only provide in-depth input on health plan premium rate filings, but will also help get more Californians engaged in how plans set those rates.”
New Help For Consumers Who Are Struggling with Insurers
The California Department of Managed Health Care (DMHC) teamed up with the Health Consumer Alliance to help those who are struggling to get health coverage and resolve problems with their health plans. Free assistance will be available online, over-the-phone, and in-person at independent, community-based offices throughout the state. The consumer assistance partnership is supported by a $1.6 million federal Affordable Care Act grant. In addition to direct assistance, the Health Consumer Alliance will provide information and education about how the health care system is changing under federal health care reform. For more information, call 888-466-2219 or visit www.HealthHelp.ca.gov.
Employee Attitudes Vary By Region
When it comes to wellness, employee benefits, and financial preparedness, some interesting regional differences are apparent in a recent Aflac study. Aflac sponsored the study of more than 6,100 U.S. workers, conducted in January and February 2012 by Research Now. For example, 70% workers in Sacramento would be at least somewhat likely to accept a new job if it offered slightly lower pay, but better benefits compared to only 53% San Diego.
Fifty-three percent of workers in San Diego say their benefit package is very or extremely influential in job satisfaction compared to only 46% of workers in Los Angeles. The following are the percentage of workers in each region who agreed with the following statements:
It is not very or not at all likely I or a family member will be diagnosed with a serious illness, like cancer.
• 69% Los Angeles
• 69% the Bay Area (San Francisco, Oakland, San Jose)
• 62% Sacramento
• 61% San Diego
I am not very or not at all likely to be diagnosed with a chronic illness, such as heart disease or diabetes.
• 65% the Bay Area (San Francisco, Oakland, San Jose)
• 60% San Diego
• 59% Los Angeles
• 51% Sacramento
I do not have a financial plan to handle the unexpected.
• 63% the Bay Area
• 62% Sacramento
• 59% Los Angeles
• 56% San Diego
I have less than $500 in savings for emergency expenses.
• 26% Los Angeles
• 24% San Diego
• 20% Sacramento
• 11% the Bay Area
I have less than $1,000 in savings for emergency expenses.
• 50% Los Angeles
• 47% the Bay Area
• 46% San Diego
• 42% Sacramento
What can my employer do to keep me in my job? Improve the benefit package.
• 59% Los Angeles
• 52% Sacramento
• 43% the Bay Area
I would be at least somewhat likely to purchase voluntary insurance benefits if my employer offered them.
• 59% Los Angeles
• 54% the Bay Area
• 54% Sacramento
• 52% San Diego
I would be at least somewhat likely to accept a new job if it offered slightly lower pay, but better benefits.
• 70% Sacramento
• 61% Los Angeles
• 60% the Bay Area
• 53% San Diego
My benefit package is very or extremely influential in job satisfaction.
• 53% San Diego
• 51% the Bay
• 46% Los Angeles
I am at least somewhat likely to participate in company fun runs.
• 58% Los Angeles
• 55% of workers the Bay Area
• 53% San Diego
• 48% Sacramento
I am at least somewhat likely to participate in health fair.
• 75% the Bay Area
• 71% Los Angeles
• 65% Sacramento
• 62% San Diego
I am least somewhat likely to participate in a biometric screening.
• 77% San Diego
• 71 % Los Angeles
• 75% in the Bay Area
• 60% Sacramento
I am at least somewhat likely to participate in health-related seminars.
• 74% the Bay Area
• 67% in Los Angeles
• 64% San Diego
• 62% Sacramento
For more information, visit AflacWorkForcesReport.com or send an e-mail at CABayArea@aflac.com.
Spanish-Language Healthcare Resource
Californians for Patient Care launched a Spanish-language website, which provides access to low-cost and free healthcare resources in California. People can access the Spanish-language website by visiting www.calpatientcare.org. Along with information on local dental care and healthcare service providers, CPC provides information on chronic disease management, how to shop for health insurance, updated information on the Affordable Care Act (ACA), and links to helpful organizations and websites.
Home Healthcare Reduces Medicare Spending
When home healthcare is used as the first setting for post acute-care, Medicare saves an average of $5,411 per patient compared to the average Medicare post-acute care episode payment, according to the Alliance for Home Health Quality and Innovation. The data suggest that home healthcare can generate significant savings across multiple clinical conditions. For more information, visit http://ahhqi.org.
In Home Care Remains a Bargain
In-home care costs rose only slightly, if at all, compared to other types of long-term care, according to a Genworth study. Nationally, the median hourly cost is $18 for homemaker services and $19 for a home health aid.
In California, the median cost is $21 per hour for homemaker services and $23 per hour for home health aide services. The median hourly cost for homemaker services in California has increased 1.7% annually over the past five years, while the hourly cost of home health aide services has increased 2.4% over the same period.
The median annual cost for care in an assisted living facility is $39,600 nationally and $42,000 in California. The national yearly cost for assisted living has increased 5.7% a year over the past five years while long term care costs in California have increased 4.6% a year. Nationally, the median annual cost for a private nursing home room rose 4.3% annually over the past five years to $81,030 while costs in California increased 3.9% to $93,988.
Consumers have more long-term care options than ever as seen by the increasing number of home care agencies. There were about 9,200 Medicare-certified home care agencies in at the start of 2008, according to the Centers for Medicaid and Medicare. Today, there are slightly over 11,000 — an increase of 20%. Conversely, during this same period, the number of Medicare-certified nursing homes has increased less than one half of 1% from just over 15,000 to 15,100. The number of nursing homes is increasing at a slower rate and no longer represents the only option.
This competition for home care services has kept costs relatively stable, especially compared to the cost of care in a nursing home or assisted living facility. For more information, click here.
NEW PRODUCTS
Long-Term Disability Rider
AIG Benefit Solutions introduced the Income PLUS rider to its group long-term disability insurance. It provides a one-time, lump-sum payment in the event of a disabling condition. It is not offset or negated by any other sources of income and is paid in addition to the monthly benefits offered under the long-term disability product. The Income PLUS benefit can be used by employees as they see fit to help pay debt or medical bills or to provide a financial cushion during a period of disability. For more information, visit www.americangeneral.com/disability.
Disability Plan Evaluation Tool
Assurant’s new online tools compare how the indexing methods and offsets of various plans affect disability benefits. The tool will help brokers and employers evaluate options and understand how they affect the payout that a disabled employee will get from their disability plan, which can affect their level of income protection for the long term. For more information, visit www.assurantemployeebenefits.com/offsetsandindexing
Voluntary Universal Life
Lincoln Financial introduced Lincoln Employee Value Universal Life (UL). It enables employers to enrich their benefit packages with an employee-paid life insurance Employees can select up to $300,000 in benefit amounts. The policies are issued individually. As long as sufficient premium is paid, the coverage is guaranteed for life even if the employee retires or changes jobs. The premium amount that guarantees the policy for life can never be raised. For more information, visit www.LincolnFinancial.com.
Dental Plan
Guardian acquired MasterCare DENTS, which expands its dental PPO network in the Southwest and strengthens Guardian’s dental network of more than 79,000 dentists at over 181,000 locations. MasterCare DENTS includes 187 dental offices in Northern Nevada and the Lake Tahoe region of California. For more information, visit www.GuardianLife.com.
Return-to-Work Services
Prudential enhanced its return-to-work services to help employers manage absence costs and workforce productivity as well as provide support for employees who are returning from leaves of absence. Employers get absence and short-term disability reports as well as customized worksite solutions. New tracking, validation, and reporting capabilities give employers information about an employee’s leave status in real time. Reports about daily absences, the reason employees are out of work, and their expected return date help employers plan and manage staff. For more information, visit http://www.news.prudential.com.
Healthcare Exchanges to Be Discussed at SAHU Meeting
Ron Goldstein, president and chief executive officer of CHOICE Administrators will discuss the national movement toward health insurance exchanges at the Sacramento Association of Health Underwriters’ (SAHU) monthly luncheon on April 18. The event will be held at the Citrus Heights Community Center in Citrus Heights. For more information, visit www.sahu-ca.com.
Meeting in Anaheim
The NetVU conference will be held April 26 to 29th in Anaheim. NetVU brings together over 1,000 insurance industry professionals each year to discuss the effect that new technology can have on their business. The event will feature cloud-enabled business processes, digital marketing, and best practices for efficient information management. For more information, visit www.nyhus.com.
Health Care Costs to Increase Less Than 10%
Costs for all types of medical plans are expected to increase by 9.9% for 2012, according to a survey by Buck Consultants. This is the first time since 2001 that Buck’s survey has projected cost increases less than 10% for any type of plan.
Health insurers may have added margins to account for health care reform benefit changes mandated for 2011, but they have now removed those margins for 2012 projections, said Daniel Levin, FSA, a Buck principal and consulting actuary who directed the survey. The reduction also reflects lower expected costs as a result of the economic slowdown. Employees are trying to reduce their out-of-pocket expenses and are postponing elective medical services. Also, the trends are not varying by plan type as they have in previous surveys, added Levin. This may indicate that insurers do not see network type as a significant reason for modifying trend factors. Health insurers reported an average prescription drug trend of 9.6%. This is down 1.1% from the prior survey. It is also more than twice the 4.6% reported by pharmacy benefit managers.
For plans that supplement Medicare, health insurers reported a projected increase of 5.8% excluding prescription drug coverage, up from 5.3% in the prior survey. This lower trend of Medicare Supplement plans reflects federal controls on Medicare fees and the lower increases expected in Medicare deductibles and copays. Levin said, “Despite the lower trend factors found in our survey, healthcare costs continue to outpace general inflation and wage increases — creating real business challenges for organizations. We’ve seen increased interest from plan sponsors for strategies to optimize alternative delivery systems, such as exchange models and accountable-care organizations.” For more information, visit http://www.buckconsultants.com.
Support for Health Law Reaches a New Low
Last month’s hearings on the constitutionality of healthcare reform didn’t help its popularity. Public support for Barack Obama’s signature domestic legislation has hit a new low in the latest ABC News/Washington Post poll, with criticism of the individual mandate as high as ever. Half the public thinks the U.S. Supreme Court will rule on the legislation on the basis of the justices’ partisan political views rather than the law.
Fewer than 40% think impartial legal analysis will carry the day with the rest unsure. Fifty-three percent of Americans now oppose the law while just 39% support it — the latter the lowest in more than a dozen ABC/Post polls since August 2009. “Strong” critics, at 40%, outnumber strong supporters by nearly a two-to-one margin in this poll, produced for ABC by Langer Research Associates.
Two-thirds continue to say the high court should throw out the entire law (38%) or at least the part that requires most individuals to obtain coverage (29%) or face a penalty; just a quarter want the court to uphold the law as is. Those numbers, like views on the law overall, are essentially unchanged from a month ago.
Republicans, who are most likely to oppose the law, are less apt to think the justices will rule on the basis of politics; 41% say so, still a not-insubstantial number when it comes to a basic assessment of independent jurisprudence. Fifty-five percent of Democrats and 52% of independents suspect the justices will go political.
Obama’s approval rating for handling healthcare has been more negative than positive steadily since he signed the Affordable Care Act (ACA) into law in March 2010. And the intensity of sentiment has been especially negative, with strong critics exceeding strong supporters by an average of 13%. However, Obama leads Romney by (48% to 38%) in trust to handle healthcare policy. Romney may have trouble challenging Obama on the individual mandate, given its similarity to provisions in the Massachusetts healthcare law that he signed as governor in 2006. Indeed, among people who oppose the ACA, a relatively tepid 58% trust Romney over Obama to handle healthcare policy. For more information, click here.
