Governor Brown signed the California Association of Health Underwriters’ top priority bill AB 72 (Bonta/Wood/Bonilla/Dahle/Gonzalez/Maienschein). AB 72 is bi-partisan consumer protection legislation aimed at protecting health care consumers from unexpected balance billing when they are treated by an out-of-network provider at an in-network facility. CAHU President Rick Coburn said, “The reason we support AB 72 is that our licensed, certified health insurance agents are usually the ones the consumer calls first asking for help to investigate, and then deal with, out-of-network charges and balance billing.” AB 72 limits a patient’s cost-sharing for out-of-network services to the amount the health care consumer would have paid to an in-network provider. It counts the cost-sharing payment toward an individual’s out-of-pocket maximum and deductible. CAHU members get tens of thousands of calls on balance billing problems each year.
Governor Signs Opioid Addiction Bill
Gov. Jerry Brown to signed into law Senate Bill 482 (Lara) – a bill to help reduce opioid prescription abuse. SB 482 requires health care providers to consult California’s prescription drug monitoring program (PDMP), the Controlled Substance Utilization Review and Evaluation System (CURES) database. CURES is a database of Schedule II, III and IV controlled substance prescriptions dispensed in California and mandatory checking before prescribing will limit instances of doctor shopping.
Blue Shield of California has been a big supporter of the bill. Marcus Thygeson, chief health officer at Blue Shield of California said, “SB 482 will help to ensure a continued reduction in the number of our members on dangerously high doses of opioids…It’s possible to manage most chronic non-cancer pain without opioids, and SB 482 is critical to that effort.”
In 2015, Blue Shield launched a three-year narcotic safety initiative to reduce inappropriate prescribing and overuse of opioid narcotic medications by at least 50% for its members by the end of 2018. “We are seeing a significant…reduction in prescribing the very highest doses of opioids,” he added.
Employers in the San Francisco Bay Area Must Provide Tax-Free Transit Benefits
California’s Governor has signed into law SB 1128, making permanent a pilot program that provides tax-free transit benefits to employees in the Bay Area. Employers with at least 50 full-time employees must offer tax-free transit and van-pool benefits. Transit benefits stem from a Federal law that allows employees to be provided up to $255/month for transit or van-pool expenses as long the funds are provided or withheld by employer. There are no required plan documents and no defined open enrollment periods. By offering commuter benefits, employers can save up to 7.65% on average in payroll taxes, and employees can save up to 40% on their commuting costs by using pre-tax money. For more information, visit www.commuterbenefits.com, or by contacting us at 1-800-531-2828.
Group Says That Insurers Are Pushing Kidney Patients from Marketplace Plans
The American Kidney Fund (AKF) is urging CMS to prevent insurers from steering privately insured patients inappropriately onto Medicare and Medicaid. AKF responded to an August 18 request-for-information on the issue from the Centers for Medicare & Medicaid Services (CMS). For some end stage renal disease patients, Marketplace plans offer services at a lower cost than what they could get through public programs. The law gives patients the right to make this choice, but many need charitable assistance to make it a reality.
AKF says that some insurers are pushing patients with end stage renal disease off of their Marketplace plans and onto Medicare or Medicaid. Some insurers are sending letters to policyholders requiring them to sign declarations, under penalty of perjury, that they are not receiving charitable assistance to help them pay their premiums. They are telling the members that the carrier cannot accept their payment if they have got such help, according to AKF. Some plans have told end stage renal disease patients that federal law requires them to enroll in Medicare four months after their diagnosis. “For health insurers, charitable assistance is the new pre-existing condition. Before the Affordable Care Act, insurers could avoid covering patients with expensive, chronic diseases—pre-existing conditions. Now…they are seeking new ways to deny sick patients coverage to improve their profits,” said LaVarne A. Burton, president and chief executive officer of the American Kidney Fund. Some plans offer to pay the Medicare coinsurance if members change their primary coverage to Medicare. “Such practices constitute steering and interfere with patients’ ability to freely choose the plan that is in their best interests,” Burton added.
AKF says that there are parallels to insurer efforts in Louisiana, in 2014, to exclude patients with HIV/AIDS who got premium assistance from the Ryan H. White HIV/AIDS Program. HHS published an interim final rule requiring insurers to accept third-party payments from the Ryan H. White Program on behalf of people living with HIV/AIDS, which, like end stage renal disease, is a federally recognized disability. For more information, visit KidneyFund.org.
Compounding Pharmacies May Be the Antidote to High Drug Prices
Imprimis Pharmaceuticals published a 75-page drug pricing study describing proposals to lower drug costs through the use of compounding pharmacies. Imprimis’ Founder and CEO, Mark L. Baum says, “Safe and effective compounding of necessary medications…can be a critical part of…needed reforms…Martin Shkreli is but one example of the many pharmaceutical executives and companies that betrayed the inherent social contract between the American pharmaceutical industry…Each day there is yet another example of older, off-patent drugs that experience significant price increases. Chicago-based Novum Pharma increased an old off-patent drug Aloquin to more than $9,500 a tube, a more than 3,900% since its acquisition only 18 months ago. Companies do this to consumers because policy prevents competition, particularly for drugs like Aloquin. We plan to leverage our record of success by bringing new, affordable compounded drug innovations to market to combat high drug prices. We believe that by continuing our efforts we will provide greater competition in the U.S. prescription drug market, lower consumer prices for certain critical medicines, and provide greater access to safe, affordable drugs for all Americans.”
Imprimis is known for its 99-cent alternative to the $750 per pill Daraprim, which was introduced in October 2015 after Turing Pharmaceuticals increased the price of the drug by over 5,000%. Imprimis made its 99-cent alternative using only FDA-approved components. Imprimis has dispensed more than 20,000 doses, saving patients and healthcare providers more than $10 million. The company began fighting high pharmaceutical prices in April 2014, when it introduced Dropless Therapy for use after cataract surgery. A study from Cataract Surgeons for Improved Eyecare demonstrated that Dropless Therapy could save Medicare and Medicaid and patients up to $13 billion, assuming a cost of $100 per dose of Dropless Therapy.
In May 2016, Imprimis introduced its patent-pending tiopronin delayed release compounded formulations, a lower-cost alternative to Thiola, representing an estimated cost savings of over 80%. Thiola is a chronic care drug that can cost more than $150,000 a year per patient. Imprimis offers a customizable pentosan polysulfate sodium delayed release (PPS-DR) compounded medication as an alternative to Elmiron for the treatment of symptoms associated with interstitial cystitis, at a cost savings of 88%. Imprimis is working on a compounded alternative to the Epi-Pen, which would be available for less than $100. For more information, visit http://www.imprimisrx.com/why-imprimisrx/imprimis-cares.
Marketplace Premiums Are Beating Employer Group Premiums
In more than 75% of states and more than 80% of metro areas, premiums for individual Marketplace plans are lower than premiums for employer plans. With few exceptions, the growth of individual premiums in the Marketplaces should not be interpreted as evidence that these new markets are weak, according to a study by the Urban Institute. In 39 states and D.C., the 2016 the average premium for the second-lowest-cost Silver individual plan was 10% lower than the average premium for employer-sponsored single plans. The exceptions are Alaska, Arkansas, Delaware, Georgia, Louisiana, Missouri, Nebraska, North Carolina, South Dakota, Vermont, West Virginia and Wyoming. Also, San Francisco, Atlanta, New Orleans and Charlotte, N.C., had higher premiums for individual Marketplace plans (second-lowest-cost silver) than premiums for employer-sponsored insurance.
The study took into account actuarial value, utilization, and age-distribution adjustments.Premiums for Marketplace individual insurance tend to be lower in rating areas that have more participating insurers, Medicaid insurers, and/or provider-sponsored insurers. Individual Marketplace premiums may be lower because Marketplace insurers are more aggressive in offering plans with narrower provider networks. Premium transparency and plan comparability may also play a role. Large differences between individual and employer premiums may indicate that individual premiums are under-priced in some areas. The large premium increases in several states may signal that these markets are reaching a stable equilibrium. For more information, visit
Employees Need More Support with HDHPS
Employees need education to understand their high deductible health plans (HDHPs), according to a study by the Guardian. Three in five employers don’t offer an HSA alongside their high deductible plan, especially businesses with fewer than 50 employees – a segment that accounts for nearly 30% of working Americans.Even when employees have access to an HSA, many don’t know how to fund it or use it. Three in five workers say the would be unable to pay a $3,000 out-of-pocket medical expense. Faced with such an expense, they would do the following to pay a medical bill:
- 37% Make a deal with the provider to pay over time.
- 34% Use a credit card.
- 9% Ask for a loan from friends or family.
- 6% Get a bank loan.
In the past year, one in three employees with an HDHP has done the following because of the high out-of-pocket costs:
- Skipped a doctor visit.
- Delayed a recommended procedure/surgery.
- Failed to fill a prescription.
- Avoided a blood test or x-rays.
Offering supplemental health benefits, such as hospital indemnity insurance, accident insurance, or critical illness insurance, can also help to offset out-of-pocket costs. For more information, visit https://www.guardiananytime.com.
Senior Executives Influence HSA Participation
When it comes to driving participation in Health Savings Accounts (HSAs), involvement from company leadership beats financial incentives, according to a Wells Fargo Insurance study. The responses represented well over one million employee lives, dozens of industry classifications, and three group size market segments (fewer than 200, 199 – 999, and over 1,000). Executive involvement takes the form of participating in benefit programs, endorsing benefit plans to the board of directors, being involved in employee benefit communications, and including employee health and well-being in organizational goals and value statements. Employers who take an active role in plan management can influence the total spending on benefit plans—by establishing a culture of health, demonstrating support of wellness, or narrowing their provider network, which can save up to 10% of costs for businesses.
Contrary to popular belief, an employer’s cash contribution does not affect employee participation in plans with HSAs. Financial incentives do not motivate employees to opt out or waive medical plan coverage. Nick Allen of Wells Fargo Insurance said, “As it turns out, many employees don’t view HSA contributions from their employers as an incentive when choosing plans.” Dan Gowen of Wells Fargo Insurance said, “We’ve seen senior leaders encourage employees to leave work early to exercise or get their annual physical. That type of encouragement from management sends a strong message, not only boosting employee morale, but also having a positive financial impact.”
Companies that offer more wellness initiatives, such as walking or biking trails, smoke-free environments and lactation rooms, reported lower medical premiums. However, fewer than one in five employers has a documented plan to address wellness and disease management. While support from senior leadership is important to increase engagement, only 45% of employees surved said they have gotten support from their executives. Company executives have done the following:
- 25% Get involved in employee benefits communications.
- 21% Participate in benefit programs.
- 16% Endorse benefits plans to their board of directors.
- 17% Include employee health and well-being in organizational goals and value statements.
For more information, visit wellsfargo.com.
Many Americans Shop for Care, But Few Understand Insurance
Thirty-two percent of Americans are using websites and mobile apps to comparison shop for health care, up from 14% in 2012. But only 7% have a full understanding of all four basic insurance concepts, according to a study by UnitedHealthcare. The survey reveals the following about consumers:
- During the past year, nearly a third have used the Internet or mobile apps to compare the cost of medical services up from 14% in 2012. When it comes to younger consumers, 47% of people 18 to 34 have used online or mobile resources to comparison shop for health care. Eighty-one percent of comparison shoppers describe the process as very helpful or somewhat helpful.
- Only 7% can define all four basic health insurance concepts. More than 60% of consumers correctly defined plan premiums and deductibles. But only 36% correctly defined out-of-pocket maximums; and 32% correctly defined co-insurance.
- 78% prefer speaking with a customer service representative; 7% prefer e-mail; and 7% prefer online chat.
- Many people don’t know what medical services cost. For instance, the average nationwide cost for a knee replacement is $35,000, according to www.guroo.com. Eleven percent of consumer selected $35,000 correctly as the average cost for this procedure while 63% estimated the cost to be only $5,000.
- 56% of full time workers would be interested in using a wearable fitness tracker as part of a workplace wellness program.
- 37% of consumers said they were very likely or somewhat likely to use a smart phone, tablet or computer to access health care services.
For complete survey results, visit the UnitedHealthcare newsroom at www.uhc.com.
Employee Self-Service Reaches All-Time High
Eighty-eight percent of employees have direct access to their pay and benefit information online, according to a recent survey by the American Payroll Assn. (APA). The results reflect a 6% increase in employee self-service portals since 2015. For more information, visit www.nationalpayrollweek.com.
How Tuition Assistance Saves Money for the Healthcare System
The health system sees a 4% return on every dollar it spends on tuition assistance, according to a study by Accenture and the Lumina Foundation. They studied Advocate Health Care, which is the largest health system in Illinois. Advocate Healthcare’s education-assistance program increases employee career opportunities and retention rates, which drives financial returns for the health system. Program participants are up to 4% more likely to be promoted, up to 0.6% more likely to be transferred within Advocate Health Care, and up to 3% more likely to stay at the company, which reduces talent management and recruiting costs. Participation in education-assistance programs generated a 17% increase in wage gains over non-participants. By 2020, two-thirds of all jobs in the U.S. will require some form of higher education, but only about 45% of Americans have at least a two-year degree or other post secondary credential. For more information, visit www.luminafoundation.org.
Accountable physician organizations are invited to attend a symposium, “How to Thrive in Risk-Based Coordination Care.” It will be held in Chicago on Thursday, October 27, 9:00 am to 4:00 pm. For more information, visit www.capg.org.
Webinar to Examine the U.S. Healthcare Market
A.M. Best will present a webinar on the healthcare market on Thursday, October 6, 2016, starting at 2:00 p.m PST. A panel of experts will discuss how the ACA is affecting the healthcare industry, recent challenges to merger and acquisition activity, upcoming elections, and more. For more information, visit www.ambest.com/webinars/healthmarket16.
Optimal Enrollment Strategies
Colonial Life is offering a white paper on the most effective enrollment strategies for brokers. To download the “Enrollment Engine,” visit http://coloniallife.com/newsroom/white-papers.aspx.
Cigna Boosts Telehealth
Cigna has expanded access to affordable telehealth services for millions of Americans enrolled in Cigna administered medical and behavioral health plans for 2017. In 2017, Cigna will significantly expand its telehealth coverage by adding by American Well (AMWELL) as a standard telehealth benefit for most of Cigna’s U.S. employer-sponsored group health plans, and many of its individual health plans on and off public marketplace exchanges. Services operate national networks of board-certified doctors that are able to treat minor medical conditions such as allergies, cold and flu and sinusitis.
In January, Cigna will also add telehealth video consultations for its health plan customers by using the company’s contracted behavioral health professionals. Customers who have mental health/substance abuse benefits with Cigna will have the option for individual therapy or medication management through video-based services. There is no additional cost for these behavioral services to customers or their employers, with the same cost share applying to video-based services as face-to-face office visits. Cigna Telehealth Lead, Robert Wijnhoven said, “At a time when many customers are responsible for a larger percentage of their medical spend[ing], telehealth offers on-demand access to health care professionals at a fraction of the cost of conventional points of service, such as retail clinics, urgent care, and emergency room visits. Cost is especially important for customers on the public exchanges, which is why we are extending this benefit beyond our employer-sponsored plans…MDLIVE and AMWELL for Cigna share consult notes with the customer’s primary care physician, with their consent, which helps facilitate continuity of care and promotes better quality and results.” For more information, visit www.amwell.com.
Aetna to Offer Apple Watch to Members
Beginning this fall, Aetna will make the Apple Watch available to select large employers and individual customers during open enrollment season. Aetna will be the first major health care company to subsidize a significant portion of the cost of the Apple Watch, offering monthly payroll deductions to make covering the remaining cost easier. With support from Apple, Aetna is planning several iOS-exclusive health initiatives, starting with health apps for iPhone, iPad and Apple Watch. The initial solutions that Aetna is developing are among the first health apps designed for multi-device use.