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Wednesday April 16th 2014



Commissioner Calls United’s Rate Increase “Unreasonable”


• Dept. of Insurance Calls United’s Rate Increase Unreasonable
• Anthem Must Pay Providers More
• Video Offers Covered California FAQs
• Health Benefit Exchange Town Hall
• SeeChange Warns Against Anti-Wellness Bill
• People with More Than One Retirement Plan
• Making Sense of Hospital Quality Measures
• Medicaid Expansion Has Mixed Results on Health
• Americans Remain Confused About Health Reform
• Genworth to Cease New Sales of AARP LTC Products
• Sales Take off for Life Policies With LTC Benefits
• Disability Marketing App
• Variable Annuity
• Financial Planning Website
• Health Reform Tax Credit Calculator
• Health Reform Website for Employers


Dept. of Insurance Calls United’s Rate Increase Unreasonable


California Insurance Commissioner Dave Jones

The California Department of Insurance calls it excessive and unreasonable for United Healthcare to issue a 4.9% quarterly average rate increase on small business policyholders. The increase, which became effective May 1, affects about 12,000 employees and their dependents this quarter and will affect more than 45,000 when their policies renew later in the year. Key findings include the following:
• Department actuaries determined that the actual 12-month average increase on these small businesses is 7.7% when you include benefit reductions.
• Department actuaries say United did not provide substantive evidence to support its rate increase. They say United Healthcare overestimated its trends for costs and numbers of claims.
• United’s percentage of premium attributable to covering administrative expenses is significantly higher than the market average in California.
• United’s Healthcare’s company-wide return on equity for 2011 was 55%, and 53.7% for 2012.
• The margin on revenue for the company’s California business exceeds other carriers as well.

For more information, visit

Anthem Must Pay Providers More

The California Department of Managed Health Care (DMHC) is requiring Anthem Blue Cross to pay health care providers money owed to them for the underpayment of interest on late paid claims for services dating back to 2007. Anthem must pay claims submitted to the company for services provided July 1, 2007 to April 30, 2011. Anthem must also make changes to its claims payment and provider dispute processes, including improved training and auditing policies and procedures to ensure the appropriate payment of claims. The full settlement agreement can be found here:

Video Offers Covered California FAQs

CalChamberNews released a video with FAQs about Covered California. Peter Lee, executive director of Covered California clarifies what small businesses (two to 50 employees) need to know about the state’s new insurance marketplace. This is the third of a four part video series produced in partnership with Health Law Guide for Business. To view the video, visit

Health Benefit Exchange Town Hall

Michael Lujan, director of Sales & Marketing for Covered California and the California Health Benefit Exchange, will be doing a special Town Hall as part of CAHU’s “Day” at the Capitol, which will be held Tuesday, May 14 to 16 in Sacramento. There will be professional development sessions with the opportunity to earn CEUs. Topics include how agents can get ready for California’s new health insurance marketplace. For more information, e-mail or Mike Belote

SeeChange Warns Against Anti-Wellness Bill

Dr. Sean Penwell, chief medical officer of SeeChange Health warns that California Senate Bill 189 would hamstring wellness and prevention efforts in the state. The bill, introduced by State Senator Bill Monning (D-Carmel), passed the Senate Health Committee. Under the legislation, health insurance plans could not offer consumers lower premiums or lower out-of-pocket expenses for participating in wellness programs.

Proponents of the bill claim that financial rewards offered by some wellness and preventive programs discriminate against the poor and shift costs from healthy to less healthy insureds. In his testimony before the Senate Health Committee, Dr. Penwell disputed this conclusion citing a RAND Corporation study, sponsored by the Obama Administration, which found no evidence of such discrimination. “What that study did find is that for every dollar spent on a wellness program, $30 in savings was generated for direct medical costs and productivity. Even more important, these wellness programs improve the quality of life enjoyed by participants and save lives,” Dr. Penwell said.

Penwell sited the experience of one San Diego man, “a body builder and the picture of perfect health” who participated in a wellness program included in his SeeChange Health Insurance policy. The screening discovered a previously undiagnosed cancer. The early detection allowed for less intrusive treatment, and he is doing well. “If Senate Bill 189 had been law last year, this individual would likely be dead,” he said.

Describing the legislation as not only misguided, but also unnecessary, Dr. Penwell reminded Health Committee members that the Obama Administration was putting forward regulations addressing the same concerns underlying SB 189, “but they’re doing so in a responsible, effective way by implementing well thought-out safeguards.” He urged the lawmakers to study the federal regulations before going beyond them and forcing the withdrawal of meaningful preventive care programs. Dr. Penwell stated that wellness programs that provide financial rewards are beneficial and popular. For more information, visit


People with More Than One Retirement Plan

People who own more than one type of retirement plan tend to invest more in stocks, according to a study by the Employee Benefit Research Institute (EBRI). Having a higher income and net worth is also correlated with more stock investment.Those who own an IRA and a 401(k) are more likely to be invested entirely in stocks. Those who participate in a defined benefit pension plan and a 401(k) are less likely to allocate the 401(k) entirely to interest-earning assets, such as bonds. This means that they will invest more in stocks.

However, the likelihood of being invested entirely in stocks goes down for older heads of families who own IRAs. Also, those with more education are less likely to be invested entirely in interest-earning assets. In 2010, 22% of family heads working for small employers participated in a retirement plan, compared to 67% of family heads working for large employers.  In 2010, 19% of family heads with an employment-based retirement plan had a defined benefit plan; 65% had a defined contribution plan; and 16% had a defined benefit plan along with a defined contribution plan. This is a significant change from 1992 when 42% only had a defined benefit plan and 41% only had a defined contribution plan. For more information, visit


Making Sense of Hospital Quality Measures

Purchasers often find it difficult to determine which hospital quality measures are important, how to use quality information in a meaningful way, and how to present useful information to consumers. Researchers at the Center for Studying Health System Change (HSC) are providing an overview of how hospital quality indicators may help shape contracting and benefit design decisions. The report is available at

Medicaid Expansion Has Mixed Results on Health

A study published in the New England Journal of Medicine found that expanding Medicaid coverage in Oregon generated no significant improvements in measured physical health outcomes in the first two years, but did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain on patients. For more information, visit

Americans Remain Confused about Health Reform

Much of the public is confused about the Affordable Care Act (ACA), according to the Kaiser Family Foundation’s April 2013 Health Tracking Poll. Forty-two percent of Americans are not aware that the ACA is still the law of the land; 12% say Congress has repealed the law; 7% say the Supreme Court has overturned it; and 23% say they don’t know the status of the law.

Forty-nine percent don’t know how the law will affect their family. Fifty-eight percent of the uninsured and 56% of low-income households say they don’t have enough information to determine how it will affect their family.

The following is where Americans say they get their information about health reform:
• 40% friends and family.
• 36% newspapers, radio news. or other online news sources.
• 30% cable news.
• 10% health insurer, a doctor, an employer, or a non-profit organization.
• 9% federal agencies such as the Department of Health and Human Service.
• 8% state agencies, such the state Medicaid office or health department.

The poll provides a rough baseline before more intensive public information and consumer help begins.

What about people who don’t approve of the Affordable Care Act? Where are they getting their information? They are somewhat more likely to report getting information from friends and family (50% compared to 40%) and from cable news (37% compared to 29%). They are also nearly three times as likely to report getting information from an employer. Seventeen percent of ACA opponents have gotten ACA information from an employer, compared to 6% of supporters. For more information, visit


Genworth to Cease New Sales of AARP LTC Products

Genworth will discontinue sales of AARP-branded products on June 1st. “Since 2007, Genworth has offered certain AARP branded long-term care insurance products to AARP members. In commenting on the move, Pat Foley, president of Distribution and Marketing for Genworth simply said, “Genworth remains committed to providing exceptional service to AARP members who purchased these long term care insurance products from Genworth. Existing insureds’ coverage will not be affected by this change.”

Sales Take Off for Life Policies With LTC Benefits

The State Life Insurance Company, a OneAmerica company, says 2012 was its best ever year for sales of “Asset-Care,” a life insurance product with long-term care benefits. State Life achieved growth of 28% over its previous record set in 2011. State Life sold more policies in 2012 than it did in any other year.  Chris Coudret, executive vice president of State Life said, “More and more consumers are looking to guarantee their long-term care protection and are turning to asset-based long-term care products. With these ‘hybrid’ or ‘combo’ products, consumers can access their life insurance death benefit income tax-free to pay for qualifying expenses. Coudret says that the popularity of Asset-Care is also being driven by a patented joint care option, in which a single policy provides long-term care funding for a couple.

According to LIMRA, half of the top 20 companies that offered individual health-based long-term care insurance in 2005 have exited the market. Also, a majority of companies have had to request rate increases for stand-alone LTC insurance. For more information, visit


Disability Marketing App

As part of the 7th Annual Disability Insurance Awareness Month this May, LIFE is  offering a kit to help agents and benefit specialists with marketing and communications. The kit (!diam/clzm) includes videos, flyers, and online and social-media content focusing on disability insurance. It includes ideas for posting on Facebook and Twitter, personal blogs and other online channels. LIFE has also developed disability insurance statistics. Also, a new Disability Insurance Quiz App allows consumer to test their knowledge about disability insurance. The App can be accessed at

Variable Annuity

Nationwide Financial added four managed volatility fund options for its variable annuity line-up. Nationwide Variable Insurance Trust Managed Funds are designed to capture growth when the stock market rises and help buffer against major losses when it falls. The new funds invest in a traditional asset allocation portfolio of underlying stock and bond funds, managing investment risk through diversification. An additional layer of risk management comes from an overlay of stock index futures to adjust equity exposure in response to market volatility. For more information, visit

Financial Planning Website

Lincoln Financial Group launched a financial planning website for consumers. Visitors can discover their needs and benefit options based on their life stage. Digital tools cover product- and work/life topics. There are also videos and calculator tools. For more information, visit

Health Reform Tax Credit Calculator

The majority of Americans who are required to purchase health insurance under the Affordable Care Act (ACA) will be eligible for premium tax subsidies. GoHealthInsurance has created an online calculator that estimates 2014 individual tax subsidies and health insurance premiums for people in all 50 states. For more information, visit

Health Reform Website for Employers

ADP launched a Health Care Reform section on its website, It is designed to help employers plan for and comply with the Affordable Care Act (ACA).