CVS-Aetna Merger Take Giant Step Forward, Brings End to An Era of PBMs

The Justice Department announced today that the CVS-Aetna merger can go ahead as long as Aetna sells off its private Medicare drug plans. The $69 billion merger will bring to an end an era of big pharmacy managers that brokered prices between drug manufacturers and insurers and employers. CVS was the last of the massive independent pharmacy managers to enter into deals with major insurers, consolidating control over the money that Americans spend on medical care and prescription drugs. CVS-Aetna is just the latest in a series of combinations among health care companies in the past few years. Last month, the Justice Department approved Cigna’s takeover of Express Scripts, a major CVS rival.

MEDICARE

Fed Health Exchange to Shutdown on Sundays

Department of Health and Human Services officials disclosed Friday that they plan to shut down the federal health insurance exchange for 12 hours during all but one Sunday in the upcoming open enrollment season.

The shutdown will occur from 12 a.m. to 12 p.m. ET on every Sunday except Dec. 10.

The HHS will also shut down the federal exchange — healthcare.gov — overnight on the first day of open enrollment, Nov. 1. More than three dozen states use that exchange for their marketplaces.

Do you feel like there’s something political going on here? You’re not alone, of course. The Trump administration has been repeatedly criticized for intentionally undermining the Affordable Care Act through regulatory actions. It shortened the enrollment period, slashed money for marketing and cut the budget for navigator groups, which help people shop for plans. We don’t want to say anything untoward, so we’ll just let you read what Kaiser Health News has to say.

We’re MA Good Here in California

Good news. California did not make ThinkAdvisor’s list of worst states for Medicare Advantage plans. So we have that going for us.

SUPER BIG PICTURE STUFF

Top Insurers Chastised Over $51 Billion in Investments In Fossil Fuels

As a UN panel finds the world is losing the war with global warming and urgent action is needed, the top 10 U.S. insurance companies have reported holding more than $50.9 billion in fossil fuel investments that exacerbate climate change, according to reporting to national insurance regulators.

Consumer Watchdog’s review of public filings reveal nine of the 10 largest American insurance companies have considered the impact of climate change on their investments, but only two, AIG and Farmers, say that they have altered their investment strategy in response.

The analysis comes in wake of findings by the U.N. Intergovernmental Panel on Climate Change (IPCC) that “unprecedented” actions will be needed to cut carbon emissions over the next decade to avoid climate warming past the point of no return.

America’s biggest company, State Farm, did not even consider the risk of climate in its investments and holds $22.4 billion in fossil fuel investments.

View a chart of the results here.

Insurance companies disclosed the investments and policies in the climate-risk disclosure survey to the National Association of Insurance Commissioners (NAIC). Consumer Watchdog noted that the self-reported fossil fuel investment figures have likely been understated when comparing the number to other surveys.

The eight top 10 U.S. insurance companies who do not consider climate change in their investment are: State Farm, Allstate, Liberty Mutual, Berkshire Hathaway/Gieco, Travelers, AIG, Nationwide, Progressive, USAA, and Farmers. Only one U.S. insurance company, Lemonade, has taken the pledge to not support fossil fuels.

By contrast, top European insurance companies are ditching the fossil-fuel industry. Seventeen insurers with assets of at least $10 billion each have divested from coal. Six of the world’s biggest insurers — AllianzAXAMunich ReSCORSwiss Re and Zurich — have limited or ceased their insuring of coal projects. AXA and Swiss Re have also limited their underwriting of tar sands projects.

A new coalition of public-interest groups, Insure Our Future, has called on America’s insurance companies to follow their European cousins and divest from coal and tar sands companies, and to make plans to stop underwriting extreme fossil fuel projects. Read more at www.insureourfuture.us.

PRODUCTS

MassMutual Offers Enhanced Aviator 401(k), Making It Easier for Small Biz

MassMutual aims to make it easier and more affordable for small businesses to offer 401(k) plans. MassMutual has enhanced its Aviator 401(k) retirement savings plan for small businesses, with up to $15 million in retirement assets, offering simplified investment lineups, more affordable pricing and fiduciary support services. There are now two Aviator programs for small businesses to choose from, depending on the level of administrative and fiduciary support they prefer. The U.S. Bureau of Labor Statistics reports that 91 percent of workers employed by large companies (500 workers or more) have access to retirement benefits, nearly twice as many as employees who work for small companies (fewer than 100 workers).  Meanwhile, 57.9 million working Americans or 47.8 percent of the private workforce are employed by small businesses with fewer than 500 employees, according to the Small Business Administration. While MassMutual defines small-business retirement plans as having fewer than $15 million in assets, the SBA defines small businesses as firms with fewer than 500 employees. MassMutual’s enhanced retirement plans for small businesses are designed to help those workers save for a secure retirement. A new version of Aviator, Aviator Pro, is now available for businesses that seek more comprehensive administrative support. The program offers simplified fee and investment lineups, and fiduciary 3(16) and 3(38) services to guide and help protect plan sponsors with administrative and investment duties respectively. Meanwhile, MassMutual has introduced a series of enhancements to its original Aviator 401(k) program to enable small businesses to help employees prepare for retirement:

      • Reduced pricing, including new break points for fees as assets accumulate within the plan;
      • The introduction of new target date fund families in the MassMutual Select T. Rowe Price Retirement Funds, Legg Mason Total Advantage Funds and IndexSelect;
      • Additional zero-revenue investments, including more than 500 options from more than 60 investment managers;
      • Streamlined installation and administration with several automated services available, including enhanced automatic enrollment and automatic escalation services; and
      • Introduction of automated employee engagement campaigns that use sophisticated targeting and behavior science techniques.

    DENTAL

    UNUM Survey: Dental Costs a Big Stress

    Employee benefits provider Unum finds that 41 percent of adults cite the cost of dental care, including out of pocket costs for procedures, as the top stressor about their personal oral health. This figure was higher among women (46 percent) than men (37 percent), and among workers ages 50-64 (45 percent). These results and other key findings were part of an online poll among 1,229 working U.S. adults conducted by Unum in September.

    In the same survey, 31 percent of respondents indicated cost as the primary reason why they avoid going to the dentist, followed by anxiety (8 percent) and the anticipated pain of treatment (8 percent). When asked what they consider to be the top benefits of having dental insurance, 52 percent cited regular, covered cleanings and check-ups, followed by coverage of routine dental care such as fillings and root canals (37 percent), peace of mind (29 percent), and the importance of good oral health as part of their overall health (25 percent). 

    ACCOLADES

    Health Net Earns Prestigious Commendable Accreditation Status

    Health Net, a subsidiary of Centene Corporation, has achieved national Health Plan Accreditation with a Commendable status from the National Committee for Quality Assurance (NCQA). The NCQA evaluates how well a health plan manages all parts of its delivery system – physicians, hospitals, other providers and administrative services in order to continuously improve the quality of care and services provided to its members. NCQA raised its rating from “Accredited” to “Commendable” for two plans under the Health Net of California, Inc. umbrella:

    • Health Net of California, Inc.’s commercial HMO/POS health plan.
    • Health Net Life Insurance Company of California’s commercial PPO health plan.

    Good work, Health Net!

    EVENTS

     

    Senator Stone to Speak DCAHU Meeting
    Oct 18
    Senator Jeff Stone will speak at the Desert Cities Association of Healthcare Underwriters October meeting. More info at DCAHU.org.

     

     

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    LAAHU October Breakfast Meeting

    October 18, 2018, 8-10 AM

    Monterey at Encino Glen, 16821 Burbank Blvd., Encino (new location!)

    Theme is “12 Hacks to Help You Sell More and Stress Less.” Register Here

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    IICF Week of Giving 2018: October 13-20
    The Insurance Industry Charitable Foundation 2018 Week of Giving is right around the corner: October 13-20. 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.
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    LIDMA 15th Annual Fall Meeting & Business Showcase

    October 14-16, InterContinental Hotel in New Orleans

    Life Insurance Direct Marketing Association is the life insurance industry’s most focused gathering of high performance direct response marketers, producers, underwriters and service providers who are driving positive changes in the distribution of life insurance in order to benefit middle market consumers. Attendance at the LIDMA Fall Meeting & Showcase is available only to LIDMA members. This year LIDMA is also offering a discounted annual membership fee for first-time producers for $495, which is half off. Information on the various membership categories and pricing is available at www.lidma.org.
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    NAC3 Cryptocurrency Conference

    December 8, Las Vegas
    Come hang with Crypto Bobby, Ready Set Crypto, the Crypto Street Podcast crew and many more. This event’s focus will be on investment and how to take your gains to the next level in the current market. Register now for the early bird rate of $97. More info here.