Covered Cal Rates Will See Modest Increase – For Now

Covered California announced the rate increase for 2019 would have been closer to 5 percent if the federal penalty for the individual mandate had not been repealed in last year’s Republican tax bill. However, it looks like premiums in the state’s health insurance exchange will rise by an average of 8.7 percent next year. This means the average increase in California is smaller than the double-digit hikes expected in other parts of the country. Experts say this is due largely to a healthier mix of enrollees and more competition in our marketplace. Don’t get too comfortable, however. State officials estimate that more than 260,000 Californians will likely drop their coverage in coming years because the ACA individual mandate fines were eliminated. Peter Lee, executive director of Covered California, warns that if this happens it will drive up insurance costs beyond 2019 — not just for individual policyholders but for California employers and their workers. For now, Covered Cal encourages everyone to shop carefully when possible. In many cases, consumers may see lower increases or even premium decreases if they are willing to switch plans.

Pricing Region Total enrollment* Avg. rate change “Shop and save” avg. rate change
Region 1

Alpine, Amador, Butte, Calaveras, Colusa, Del Norte, Glenn, Humboldt, Lake, Lassen, Mendocino, Modoc, Nevada, Plumas, Shasta, Sierra, Siskiyou, Sutter, Tehama, Trinity, Tuolumne and Yuba counties

53,772 9.0% 5.3%
Region 2

Marin, Napa, Solano and Sonoma counties

51,193 9.1% 3.1%
Region 3

Sacramento, Placer, El Dorado and Yolo counties

79,158 8.8% 3.5%
Region 4

San Francisco County

36,099 9.4% 1.5%
Region 5

Contra Costa County

44,114 8.4% 1.7%
Region 6

Alameda County

63,554 9.4% 4.4%
Region 7

Santa Clara County

58,435 6.3% -12.2%
Region 8

San Mateo County

24,283 9.3% 2.7%
Region 9

Monterey, San Benito and Santa Cruz counties

27,283 16.0% 11.4%
Region 10

San Joaquin, Stanislaus, Merced, Mariposa and Tulare counties

68,817 6.8% 0.5%
Region 11

Fresno, Kings and Madera counties

32,674 3.2% 0.4%
Region 12

San Luis Obispo, Santa Barbara and Ventura counties

65,829 8.7% 1.4%
Region 13

Mono, Inyo and Imperial counties

13,329 -0.5% -3.5%
Region 14

Kern County

17,715 8.3% 6.9%
Region 15

Los Angeles County (northeast)

173,381 10.0% -1.1%
Region 16

Los Angeles County (southwest)

213,126 8.6% -5.2%
Region 17

San Bernardino and Riverside counties

123,025 9.0% 0.7%
Region 18

Orange County

133,166 9.0% -2.2%
Region 19

San Diego County

116,149 9.0% -3.8%
TOTAL 1,395,102 8.7% -0.7%

Medicare Changing Focus
Medicare is changing its focus to caring for chronic illnesses. Don’t miss Ron Stock’s exploration of the topic in our upcoming August issue. This white paper from Duke supplies more details on why the new focus should make sense.

PRESCRIPTION DRUGS

AHIP: Drug Rebates Not It
America’s Health Insurance Plans released a report last week that the organization says refutes the claims that drug rebates have been the primary driver of the rising cost of prescriptions. The report, prepared by the consulting firm Milliman, relied on publicly available data on Medicare Part D drug spending

The analysts tracked the growth of list prices and rebates among drugs covered by Medicare Part D, as well as the number of competitors for those drugs.

The study found that while rebates did indeed increase over the same period of time as the increase in list prices, the presence (or lack) of rebates had more to do with the level of competition surrounding the eligible drugs.

FINANCIAL PLANNING

New Research: Millennials Receptive to Advice
This might surprise you: When it comes to keeping in touch with their financial advisors, millennials (45 percent) are more interested in having face-to-face meetings (!) with an advisor than other generations (37 percent), and texting and social media contact trail far behind. That’s some of the new research conducted by The Guardian Life Insurance Company, which indicates a more complex view of millennials and their financial planning habits and preferences than previously thought. The study, Millennials and Money: Understanding What Drives Financial Confidence, reveals that millennials are open to learning about financial strategies more so than predicted, as nearly 75 percent say they would attend an in-person financial seminar, compared to 69 percent of generation X and 62 percent of baby boomers. What’s more, 87 percent of millennials say knowing more about financial services and products would contribute to improving their confidence in reaching their financial goals, and nearly 100 percent of millennials who report they have a financial plan and are on track to meet their financial goals say knowing more about financial products and services would help their confidence. This generation is not only open to learning about financial services, but they also emphasize the importance of working with financial advisors. Millennials are more likely than any other generation to say that having a financial advisor they trust is important to their financial confidence (83 percent).  Read more insights from the study here.

MassMutual: Retirees Worry More About Health Than Money
While we’re working, many of us think about retirement in terms of a kind of permanent vacation that requires lots of disposable income. The real experiences of retirees give us a different perspective, however. New info from the MassMutual Retirement Income Study says people who are currently retired are considerably less concerned than pre-retirees about their money lasting throughout retirement but worry more about the financial and lifestyle implications of declining health.  Retirees are confident that their retirement income will last as long as they live and that they will have enough money to meet their retirement lifestyle goals, with nine in 10 retirees saying they feel confident compared to roughly half of pre-retirees. Retirees’ confidence may stem from finding they need less income than many pre-retirees anticipate.  Overall, 60 percent of pre-retirees expect to need at least two-thirds or more of their pre-retirement income to live comfortably in retirement while 44 percent of retirees find that to be the case, according to the study.  More than a third of pre-retirees believe they will need 75 percent or more of their pre-retirement income in retirement while one-third of retirees report needing less than 50 percent.

INSURERS INVESTING

San Francisco Joins Paris to Push Insurers to Ditch Fossil Fuels
It’s been pretty hot here lately and climate change is certainly on the mind. It has also been on the mind of the San Francisco Board of Supervisors. In fact, last week that city became the first municipal body in the United States to call upon insurance companies to stop insuring and investing in fossil fuels, citing the need to address climate change and the toll climate pollution inflicts on public health and the economy. Earlier this year, the Paris city council passed a similar declaration. The S.F. resolution, approved unanimously by the city’s Board of Supervisors, urges the City of San Francisco to screen potential insurers for investments in coal and tar sands and to cut ties with any insurance company that continues to insure those energy projects.

The 40 largest U.S. insurers hold a combined investment of over $450 billion in coal, oil, gas and electric utilities. U.S. insurance companies also play a critical role in insuring coal-fired power plants, tar sands pipelines and other fossil fuel infrastructure.

Best: Insurers Continue to Pull Back From Hedge Fund Investments
The U.S. insurance industry continued to reduce its risk appetite for hedge fund investments, as holdings declined year over year by 8.5 percent to $16.4 billion from $17.9 billion in 2016, according to a new A.M. Best report. The Best’s Special Report, titled, “Insurers and Hedge Funds—The Pullback Continues,” notes that it was the second straight year that insurers pulled back from its hedge fund investments. In particular, the life/annuity sector halved its hedge fund holdings in the two-year period, to $7.0 billion in 2017 from $14.2 billion in 2015.

In first-quarter 2018, overall hedge fund performance was volatile, ending in a 0.35 percent return. However, insurers’ top two strategies, multi-strategy and long/short equity, posted negative, albeit marginally, returns for the quarter.  Access the full copy of this special report, here.

EMPLOYEE BENEFITS

Hodges-Mace Recognized as Top Cloud Solution Provider
Congrats are in order for Hodges-Mace, LLC, an award-winning benefits delivery innovator. The company has been recognized as one of the Top 10 Cloud Solution Providers in 2018 by HR Tech Outlook magazine. Since 2007, Hodges-Mace has been working to leverage the power of tech to innovate and improve the employee experience. The company’s AI-enabled SmartBen solution can be layered on top of an underlying healthcare management system (HMS) and has proven to boost employee engagement, trust and retention. The company is profiled here in the July issue of HR Tech Outlook.

EVENTS

2018 DMEC Annual Conference
August 6-9, Hilton Austin, Austin, TX
More than 700 disability and absence management, HR and legal professionals will discuss paid leave, mental health, disability and more at the 2018 DMEC Annual Conference. Workshops and panel discussions include:

  • The Business Impact of Paid Leave:  An Interactive Workshop
  • Mental Health in the Workplace:  The Invisible Disability, Now Visible
  • FMLA/ADA Lessons Learned: Recent Court Cases, Jury Verdicts and Settlements
  • It Seems Simple, But: The Complexities of Reasonable Accommodation
  • ADA Leave Cases Post-Severson
  • Minimizing the Impact of Musculoskeletal Disorders in the Workplace
  • State by State:  Paid Family and Medical Leave Legislation
  • Disability and Fitness for Duty in Transgender Employees
  • Get Explicit About Implicit Bias

See a full program and more info here.

CAHU Health Care Summit
August 7-9, San Diego Hilton, Bayfront
This year’s theme is “New Hope for the Modern Agent.” This year CAHU will be offering multiple continuing education tracks on Medicare, IFP and group benefits, business Development and more. There will be two NAHU certification courses offered on August 7. Register for the Summit and a certification course and receive a $50 discount upon completing both registrations. Keynote speaker is Suzanne Delbanco, PhD, Executive Director of Catalyst for Payment Reform. Details here.

Golden Gate Association of Health Underwriters
4th Annual NORCAL Medicare Summit
August 16-17, DoubleTree Hotel, Pleasanton, More info at ggahu.org.

CAHU Foundation Gala
September 14, Fairmont Grand Del Mar, San Diego
Please join CAHU for a Masquerade Gala to revitalize the CAHU Foundation. Festivities begin at 5:30pm at the famous Fairmont Grand Del Mar. Formal attire is requested.  Gala tickets and hotel reservations can be purchased here. Or call (800) 322-5934.

LAAHU and VCAHU Medicare Summit
September 20-21, Pickwick Gardens Conference Center, Burbank
September 20- certifications and product training (including SCAN)
September 21- C.E. Courses and breakout sessions! Theme is “Get Ready to Rock and Roll with Medicare.” Click here to register.

IICF Week of Giving 2018: October 13-20
The Insurance Industry Charitable Foundation announced the 2018 Week of Giving will be October 13-20. Registration for nonprofits and volunteers is now open. Check out IICF Week of Giving for more info. 

NAILBA 37
November 1-3, Gaylord Palms Resort and Convention Center, Orlando, Florida
Detailed information about NAILBA 37 will be available soon. Exhibit hall and sponsorship opportunities available here.  Or contact etoups@nailba.org for more info.