• Major Health Insurers Agree to Lower Rate Increases for Small Employers
• CDI Disapproves Blue Shield’s Proposal to Close Health Individual Health Products
• Accenture Selected to Implement California Health Insurance Exchange
LIFE INSURANCE & ANNUITIES
• U.S. Life Sales Increased in June
• Annuity Webinar
• New Long Term Care Insurance Products Available in California
• Employers Consider Alternatives to Traditional Group Coverage
• Americans Differ on the Need for Employer Sponsored Coverage
• NAHU Elects President
• Marketing Webinar
PRODUCTS AND SERVICES
• Virtual Broker Training Center
• Resources for Individual and Medicare Sales
• Estate Tax Calculator
• BeneTrac and Sun Life Team Up
• Virtual Benefit Counselor
Major Health Insurers Agree to Lower Rate Increases for Small Employers
Three of California’s major health insurers have agreed to lower their July rate increases. After review by the Department of Insurance, Anthem Blue Cross, Blue Shield, and Aetna agreed to modify their most recent small group rate increases for this quarter. Small group policies are available to small employers with two to 50 employees.
Anthem Blue Cross is withdrawing its 2.5% July 1st premium increase for small-group PPO products. The withdrawal will save about $25 million for 45,000 of Anthem Blue Cross’ small group policyholders, covering approximately 280,000 individuals. Anthem has raised rates 4.7% on its small group policyholders in the previous 12 months.
Blue Shield Life and Health Company will provide a credit to 58,000 small employers (covering approximately 265,000 individuals) equivalent to reducing its July 1st third quarter rate increase by 1.5%. As a result of the credit, the effective Blue Shield rate increase will be 1.6%, which is Blue Shield’s only small group rate increase for its small employer policyholders in the past 12 months. This modified rate increase will save policyholders approximately $15 million.
Aetna will lower its proposed small group rate from 2.6% down to 1.3% for its 9,200 policyholders (covering approximately 69,000 individuals), which saves about $8 million for small employers. Small employers have already been billed for July and August for the July 1st rate increases, but will see credits on their August or September bills.
Jones said, “While this is a positive outcome, it again underscores the need for authority to reject excessive health insurance rate increases. Although I have the authority to reject excessive rates for auto, home, property and casualty insurance, I lack that authority when it comes to health insurance. Year after year, Californians and businesses are faced with rate hikes because the health insurers get to decide how high to raise our rates. I urge the State Senate to pass Assembly Bill 52 in its current form.”
CDI Disapproves Blue Shield’s Proposal to Close Health Individual Health Products
The California Dept. of Insurance (CDI) has disapproved Blue Shield’s notice of intention to close most of its individual market block of business, which is regulated by the Department of Insurance. Jones notes that insurers are allowed to close products. But, they have to pool a closed a block of individual policies with enough open policies to keep the average claim level down and maintain reasonably low rates for all policies in the pool.
The CDI says that Blue Shield’s remaining open block is not adequate for pooling. The CDI says that Blue Shield has not made adequate provision for more than 20,000 consumers in the Vital Shield 2900 Plan who have no transfer right without underwriting.
Insurance Commissioner Dave Jones said, “When consumers purchase health insurance, they should not have to worry that their health insurer will…open new products and close others in ways that put the policyholder at risk of being pooled with unhealthy lives whose claims costs are likely to cause premiums to increase.”
Accenture to Implement California’s Exchange
The State of California has selected Accenture to implement a statewide health insurance exchange, called the “California Healthcare Enrollment, Eligibility and Retention System” (CalHEERS). The contract is valued at $359 million, including $183 million for initial development and implementation (to be completed by October 2013) and $176 million for continued development and operating costs over approximately three and a half years following the implementation.
Accenture will lead in developing a system that will enable Californians to determine their eligibility for subsidized health benefits, compare insurance plan options, and enroll in coverage. The target date for completion is October 2013 to allow individuals to begin pre-enrollment in health plans in advance of the January 2014 Federal deadline for all states to implement a health insurance exchange.
CalHEERS implementation will include the Accenture Public Service Platform and the Accenture Health Benefits Exchange software products. It will include health insurance exchange software from Getinsured. Other Accenture subcontractors on the project include CGI and Oracle.
U.S. Life Sales Increased in June
U.S. application activity for individually underwritten life insurance increased 2.1% in June. This includes all ages combined, year-over-year, according to the MIB Life Index. The Index posted positive numbers in eight of the past nine months. However, quarterly numbers show easing growth with an increase of 1.3% in the second quarter. In the first half of the year, the MIB Life Index is up 2.8% year-to-date compared to the same period six months last year. June’s numbers were up 2.2% from May, which is a strong posting based on historical numbers for the period. U.S. application activity grew across all age groups. For more information, visit www.mibsolutions.com/regLI.
The National Association for Fixed Annuities (NAFA) is sponsoring a Webcast on annuities on Thursday, July 26 at 8:30 A.M. Pacific time. https://www1.gotomeeting.com/register/530407161
New Long Term Care Insurance Products Available in California
LifeSecure Insurance Company is now offering its individual long-term care insurance (LTCI) and its multi-life worksite LTCI program in California. Policyholders can get care in multiple settings including their home, a residential care facility, or a nursing facility. The program also offers the following:
• Flexible coverage that provides for informal caregivers, caregiver training, home modifications, and other options.
• Personalized care coordination and support.
• Shared care, which allows a spouse or domestic partner to use their partner’s benefits if their policy is exhausted and if care is still needed.
• A quote calculator that allows policyholders to match their insurance needs to their budget.
• A simple application with an expedited approval process.
For more information, visit www.YourLifeSecure.com.
Employers Consider Alternatives to Traditional Group Coverage
Employers are considering alternate ways of offering healthcare options to their employees, such as providing defined contribution plans, vouchers, or exchange purchasing, according to a study by J.D. Power and Associates. Another option is to cut coverage altogether. However, Rick Millard, senior director of the healthcare practice at J.D. Power and Associates said,” While some reports have predicted that a large number of employers might stop offering coverage…a large majority won’t walk away from offering coverage to their employees.” Only 13% of fully insured employers and 14% of self-funded employers say they will definitely not or probably not continue sponsoring employee coverage, according to the survey.
Forty-seven percent of employers say they will definitely or probably switch to a defined contribution model within a private exchange, allowing employees to select the coverage while saving the employer money. In a J.D. Power study, published earlier this year, 42% of respondents with employer-sponsored coverage expressed interest in the defined contribution model.
Cost is still a primary concern for employers as well as employees. In fact, it has a greater effect on choosing a health plan than on the actual service experience. Employers most often blame higher health care costs on doctor and hospital fees while employees most often blame higher costs on health insurance companies’ marketing or administrative costs.
The survey also measured employer satisfaction with fully insured plans. Kaiser ranks highest in employer satisfaction with a score of 716 out of 1,0000. Kaiser performs particularly well in account servicing, problem resolution, program offerings, cost, and employee plan service experience. Aetna ranks highest in employer satisfaction among self-funded plans. The Employer Health Plan Study is based on responses from 6,579 employers, with an adequate distribution of small, medium and large companies. The study was fielded between April and May 2012. For more information, visit http://businesscenter.jdpower.com.
Americans Differ on the Need for Employer Sponsored Coverage
Fifty-four percent of adults who have purchased health insurance individually say employers should not be required to provide employee health insurance. Only 28% of Americans with employer-sponsored insurance agree, according to a Harris Interactive poll. Fifty-five percent of those with individual health insurance say the government should play a role in ensuring access to health insurance, compared to 64% of Americans with employer-sponsored coverage.
Sixty-six percent say that having health insurance should be a personal choice, so there may be some general disapproval of the ACA’s individual mandate. However, Americans do agree with some of the ACA’s other provisions. For example, 83% say that neither children nor adults should be denied health insurance if they have a pre-existing condition and 74% say that tax credits should be offered to individuals if they purchase their own health insurance.
Interestingly, 46% of those with individual coverage say that not all people need to be covered by health insurance, compared to 30% among those with employer-sponsored coverage and 36% among the uninsured.
When asked to rate the importance of 11 different aspects of health insurance, 91% note the importance of having access to the doctors, hospitals and services they need. Ninety percent note the importance of being able to get prescription coverage and insurance when they have a pre-existing condition.
Twenty-seven percent say that financial protection from major health crises is most important; 26% cite lower out-of-pocket costs; and 24% cite low premiums. For more information, visit harrisinteractive.net.
Mental Health Spending Is Growing for Children
Children and teens are using more mental health care, with double-digit increases in the use of hospital-based mental health and substance abuse services and the number of central nervous system drugs, such as anti-depressants, anti-anxiety drugs, and prescriptions. In 2010, the number of prescriptions for central nervous system drugs exceeded one per insured teen.
Parents’ out-of-pocket costs for their children’s health care has grow to an average of $371 per child. The spending increase is troubling because what is spent on children’s health care now can predict what will be spent as children age, according to the study authors. For more information, visit www.healthcostinstitute.org.
Do Medicaid Patients Really Use the ER for Routine Care?
In 2008, only about 10% of emergency room visits among non-elderly Medicaid patients were for non-urgent symptoms, according to a recent study by the Center for Studying Health System Change (HSC). Seven percent of emergency room visits among privately insured non-elderly were for non-urgent symptoms.
Slightly more than half of Medicaid and private insurance visits were from patients who needed attention immediately or within the hour. Most of the difference in frequency of ER visits between non-elderly Medicaid patients and privately insured patients were for symptoms that needed prompt medical attention.
Having access to appropriate alternative care settings or private insurance has the greatest potential to reduce emergency room use for non-elderly Medicaid patients with two types of conditions: common infections in children, such as acute respiratory infections, and injuries among all non-elderly people. However, many primary care offices are not able to see patients soon enough to manage urgent problems or they don’t have the right equipment. For more information, visit www.hschange.com.
NAHU Elects President
Bruce Benton has been elected as the president of the president of the National Association of Health Underwriters (NAHU). Benton is a partner at Genesis Financial & Insurance Services in Sherman Oaks, Calif. He says that the theme of his leadership will be to take an active role in health care legislation. Don Goldmann, who is vice president of Word &Brown General Agency, was named Treasurer of NAHU.
The Vocus Virtual Conference is being held July 19th at 7:00 AM Pacific time. Six marketing experts will discuss how to create word-of-mouth, do inspirational content marketing, and keep customers coming back. For more information, visit http://www.elabs6.com/ct.html?ufl=b&rtr=on&s=7cmsb,10k3s,k9a,1dkg,li5h,g9j6,l4w5
Virtual Broker Training Center
LISI introduced the ON24 Virtual Briefing Center for the LISI Academy. Using the virtual environment, agents and brokers can view live and on-demand Webcasts covering the latest insurance products, regulatory updates, and related topics. It also provides around-the-clock access to training materials. Brokers and their employees will be able to take courses to fulfill ongoing government requirements for licensing.
Resources for Individual and Medicare Sales
The Word & Brown Companies is combining the resources and expertise from several of its companies to create an easier and faster way for insurance brokers to sell individual and family plans and Medicare products. The companies involved are Quotit Corp., HealthCompare, Joppel, and the Word & Brown General Agency. Word & Brown has established divisions of its general agency to focus on the individuals and Medicare markets in all 50 states. The company has introduced two new Websites — one for individual sales and one for Medicare sales. Word & Brown also created a client-referral program for brokers who discover opportunities in individual family plans or Medicare, but who don’t focus on these areas.
For brokers who want to engage Medicare, Word & Brown will help train them on how to sell these products and will help them establish relationships with carriers. Brokers can also add Joppel – a CMS approved quoting engine to their own website. Gregg Ratkovic of Joppel said, “Every day 10,000 people are aging into Medicare and that trend is expected to continue for the next two decades. There are close to 50 million individuals enrolled in Medicare or Medicare Advantage plans with an increasing number of employers transitioning their retired workers into Medicare Advantage plans rather than keeping them in company-managed pension programs. Similarly, the individual and family plan market is a growth opportunity as employer groups reduce benefits, unemployment remains high, and group and government markets shrink. The implementation of health insurance exchanges and a growing desire among consumers for portable healthcare as frequent job changes become more common all point to opportunity as Americans look for quality coverage with flexibility and choice. With the recent Supreme Court decision to uphold the individual mandate proposed in the Patient Protection and Affordable Care Act signed into law in 2010, many employers may consider offering their employees lump sums so they can purchase Individual plans rather than maintain group coverage as early as January 2014.” For more information, visit www.wordandbrown.com.
Estate Tax Calculator
John Hancock developed software to help producers meet the needs of high net worth customers and small business owners. With the Business Analyzer, producers can help business owners determine the most appropriate non-qualified plan options to address retirement and estate planning objectives for themselves and key employees. With the Estate Tax Calculator, producers working with high net worth clients can quickly and easily project estate values and potential estate taxes due. For more information, visit www.johnhancock.com.
BeneTrac and Sun Life Team Up
Sun Life Financial will use BeneTrac as a partner for brokers and HR clients to enroll in its health, disability, and dental products online. For more information, call 619-788-5800 or e-mail salessupport@BeneTrac.com
Virtual Benefit Counselor
Jellyvision is offering ALEX, a cloud-based, virtual benefit counselor. It explains employee benefits in an interactive and entertaining way. It covers medical, dental, tax savings, life insurance, disability, vision, 401 (k), critical illness, and accident insurance. After ALEX recommends the most relevant plan, employees get a personalized Webpage that’s customized to their preferences. Employees use the webpage as a guideline to their benefits plan.