More Consumers Are Relying on Brokers for Medicare Part D

medicarepartdA study by Connecture finds that Medicare enrollment through multi-carrier brokers is up 8.4%, from 29% to 38%. More Medicare beneficiaries are seeking help from brokers who can provide shopping and enrollment services. Connecture found that shopping activity by brokers is up 27% and enrollment by brokers is up 17%. Brokers can use health plan and drug comparison technologies to offer Medicare beneficiaries more comprehensive and cost effective plan comparison and enrollment options.

The study also finds that costs for mandated prescription drug plans (PDP) have increased 9% to 12% over last year. A sample population of 50,000 Medicare beneficiaries spent $172 million. If those same consumers enrolled in plans based only on the lowest possible premium, their out-of-pocket costs would have been $2,229 or 16% higher than the sample. Regardless of prescription drug needs, beneficiaries are more likely to enroll in a cheaper plan. However, picking a plan based solely on premiums leaves consumers vulnerable to higher out-of-pocket costs and lower satisfaction with their selected plan. For consumers and plan sponsors, comparing and enrolling in plans based on total annual costs ensures better transparency, lower costs, and more product satisfaction.

The Untapped Power of Health Savings Accounts
by Bob Heydet
(The following is a teaser version of an upcoming article in California Broker Magazine.)
An HSA eligible plan offerings provide a true bright spot when employer costs for employee health care continue to skyrocket. Last year’s Mercer National Survey of Employer-Sponsored Health Plans revealed that the medical cost per employee enrolled in a HDHP associated with an HSA averaged $9,228 compared to $11,212 for PPOs and $11,248 for HMOs. An HSA eligible HDHP is usually the lowest-cost option in terms of paycheck deduction. There is also the opportunity to open, fund and use a health savings account. For example, HSA money can be used to pay for current medical expenses or saved for future qualified health expenses.

When discussing HSAs, brokers should offer a basic description of how HSAs work and how they benefit employees. For employers, this can mean lots of activity leading up to the open enrollment period. For example, employers should offer information in multiple formats: FAQs, in-person presentations, Q&A sessions, as well as online videos and tools such as an HSA goal calculator. It’s crucial to promote the long-term benefits of HSAs, including introducing the notion of using the HSA as a supplemental retirement savings vehicle. Create identical HSA investment lineups as the plan sponsors’ 401(k). There should be an easy-to-access online portal that includes the checking account of an HSA and the investment account. Employers should present options that encourage employees to reformulate their retirement strategy to include HSAs. For more information, visit

Home Health Community Urges Congress to Delay Claim Reviews
The Partnership for Quality Home Healthcare urged Congress to pass the Pre-Claim Undermines Seniors’ Health (PUSH) Act of 2016. It would provide a one-year delay in implementing a Medicare home health pre-claim review policy. The Medicare community is concerned that pre-claim review policies will delay care and raise costs to Medicare and patients. Patients who would otherwise be served in their home may be referred to higher cost settings. The pre-claim review demonstration is underway in Illinois, which has resulted in care denials and delays and significant confusion among providers attempting to navigate the program. The PUSH Act was originally introduced by Congressmen Tom Price, MD (R-GA) and Jim McGovern (D-MA). Bipartisan lawmakers in Florida and Illinois have asked CMS to delay the program.

NAHU Applauds New Leaders at HHS and CMS
Janet Trautwein, CEO of the National Association of Health Underwriters (NAHU), issued the following statement on Donald Trump’s recent appointments of Dr. Tom Price as secretary of Health and Human Services (HHS), and Seema Verma as administrator for the Centers of Medicare & Medicaid Services (CMS):

Dr. Price will be an outstanding leader for HHS and we look forward to working with him as the agency works to stabilize a healthcare funding system that is in crisis. Dr. Price has always actively listened to our ideas to reform the healthcare system and sought our opinion on proposed changes. Based on the tremendous leadership he provided as chairman of the House Budget Committee and member of the House Ways andMeans Committee, we are confident that Dr. Price will demonstrate that same ability in his new job as HHS secretary. Seema Verma’s comprehensive understanding of the American healthcare system and commitment to implementing real consumer-driven healthcare make her an ideal choice to lead CMS at this important time. Ms. Verma was one of the architects of the highly successful Healthy Indiana Plan as well as other state Medicaid reform programs. We look forward to working with Ms. Verma on improving Medicare and Medicaid services through practical healthcare reform.”

Washington State Says Zenefits’ Free Software Violates State Law
Washington state Insurance Commissioner Mike Kreidler ordered Zenefits to stop the free distribution of its employee benefits software, noting that the tactic violates Washington state insurance law against inducements. Washington is the first state to take action against the company for violating inducement laws. Under an agreement with Kreidler, Zenefits can challenge the order within 90 days.

California-based Zenefits began operations in Washington in 2014, selling online human resources services to businesses. As part of its free software offer, Zenefits provided certain features with a paid commission. To access these premium features, the company required the client to designate Zenefits as its broker of record, then collected the commissions associated with the insurance product sold.

Kreidler said, “The inducement law in Washington is clear. Everyone has to play by the same rules.” The law permits a licensed producer to offer no more than $100 per person during a consecutive period of 12 months. Zenefits markets the software’s value at $29,100 to $45,000 per year. The company will determine what fee to charge its Washington customers starting Jan. 1, 2017, in accordance with the order. Kreidler also fined Zenefits $100,000 in October 2016 for employing unlicensed producers to sell insurance in Washington. The company allowed unlicensed employees to complete 179 insurance transactions between Jan. 1, 2014 and Nov. 30, 2015. Washington is among a handful of states, most recently California, to fine Zenefits for allowing unlicensed producers to sell insurance.Kreidler’s investigation also found that Zenefits offered individual clients up to $2,000 in cash for referring companies through a program called “Friends with Zenefits.” Zenefits paid at least one individual $250 for two referrals. At least 25 state residents chose Zenefits as their insurance broker after a demonstration of the company’s software.

$32.8 Billion in Tax Credits Would Be Eliminated Under an ACA Repeal
According to new state data from the Kaiser Family Foundation, 9.4 million Americans who bought health plans through Affordable Care Act marketplaces will receive a total of about $32.8 billion in premium tax credits for 2016. Under the health law, people with low or moderate incomes are eligible for tax credits that reduce monthly payments for insurance plans purchased through ACA marketplaces. A repeal of the health law would eliminate these subsidies.

What Could Repeal or Reform of Affordable Care Act Mean for Americans?
Faculty members at Brown University have assessed the implications of ACA repeal or reform. Two key provisions of the ACA are the individual mandate, which requires most Americans to maintain minimum essential health insurance coverage, and the expansion of Medicaid, which increased the number of people that states must cover. An estimated 20 million citizens have gained health insurance coverage through the ACA. Margot Jackson, Watson Institute Faculty Fellow and associate professor of sociology, said that the strongest effects of an Obamacare repeal would be on adults in Republican states. They have been most likely to gain insurance via Obamacare because they were previously less likely to qualify for Medicaid or other state programs for individuals with low incomes or pre-existing conditions.

Eric Patashnik, the Julis-Rabinowitz Professor of Public Policy and professor of political science at Watson said that ACA beneficiaries are struggling to pay rising deductibles while their wages stagnate or decline. The program is not perceived as a broad middle-class entitlement. He says that repealing the subsidies and mandate penalties while retaining the ban on the exclusion of preexisting conditions and other reforms could cause insurers to leave the marketplace.

Vincent Mor, the Florence Pirce Grant University Professor and professor of health services, policy and practice said that the Patient Oriented Outcomes Research Institute of the National Institutes of Health are susceptible to defunding because of Republican discomfort with policy-oriented research.

Jim Austin, a faculty member in the Brown EMHL program and principal at Decision Strategies International, discussed two areas he hopes the new administration and Congress tackle in seeking to reform or replace the ACA: high deductibles lead patients to avoid paying for needed care and force hospitals to decide between writing off the loss or denying care. He also wants to see them address insurance availability, particularly in rural areas where individual insurers are few. The full commentaries are available at School of Public Health, the Watson Institute for International and Public Affairs and the School of Professional Studies sites. For more information, visit

Only 29% Want An ACA Repeal
The Kaiser Health Tracking Poll finds that 26% of Americans want to see President-elect Donald Trump and the next Congress repeal the Affordable Care Act, and an additional 17% want them to scale it back. Thirty percent want to see the law expanded and 19% want to see lawmakers implement the law as it is. Fifty-two percent of Republicans want to see the Affordable Care Act repealed, down from 69% in October. At the same time, 24% of Republicans want to see the law scaled back, up from 11% in October.

Thirty-one percent of those who want to see the Affordable Care Act repealed, want it just repealed and not replaced. About two-thirds wants lawmakers to repeal the health care law and replace it with a Republican-sponsored alternative, with 42% wanting lawmakers to wait to repeal it until the details of a replacement plan have been figured out and 21% wanting lawmakers to repeal it immediately and figure out a replacement plan later.

Thirty-eight percent of those who said they wanted the law repealed, changed their opinion after hearing that it would mean that insurance companies could deny coverage to people with pre-existing conditions. A slightly smaller share change their opinion after hearing that more than 20 million Americans could lose their coverage. While President-elect Donald Trump and Republican leaders in Congress work on a replacement to the Affordable Care Act, the new poll finds many of the law’s specific provisions remain popular even among President-elect Trump’s supporters, potentially complicating the path ahead.

For example, majorities of Republicans, Democrats and independents favor the following:

  • Allowing young adults to stay on their parents’ insurance plans until age 26 (85% of the public, including 82% of Republicans)
  • Eliminating out-of-pocket costs for many preventive services (83% of the public, including 77% of Republicans)
  • Providing financial help to low- and moderate-income Americans who don’t get insurance through their jobs to help them purchase coverage (80% of the public, including 67% of Republicans)
  • Giving states the option of expanding their existing Medicaid programs to cover more uninsured low-income adults (80% of the public, including 67% of Republicans) and
  • Prohibiting insurance companies from denying coverage because of a person’s medical history (69% of the public, including 63% of Republicans).
  • In contrast, 35% of the public agree with provisions that that nearly all Americans have health coverage or pay a fine (63% have an unfavorable view). Fifty-seven percent of Democrats favor this provision as do 30% of independents and 21% of Republicans.
  • Sixty percent of the public supports the law’s requirement that employers with at least 50 workers offer health insurance or pay a fine is more mixed. In contrast, just 45% of Republicans favor this provision.
  • Americans are divided on how repeal would affect health care costs for them and their family, with nearly equal shares saying repealing the law would make costs worse (30%) as saying it would make costs better (27%). Another four in 10 say their health care costs would be about the same. Most also say that, under repeal, they would expect their quality of care and access to health insurance to remain about the same.


Insurance Job Market Soars
The number of jobs in the insurance industry doubled in October, jumping to 7,700 last month from 2,300 in September, according to the U.S. Bureau of Labor Statistics’ Economic Situation Report ( The overall unemployment dropped by 0.3 percentage points, to 4.6%, last month — the lowest rate since 2007. As NPR’s Marilyn Geewax notes, 4.6% unemployment is what most economists consider “full employment,” which she says is “when the number of people seeking jobs is roughly in balance with the number of openings. The drop in unemployment was a surprise — economists had thought it would hold steady at 4.9%.

Jay Rollins, owner of said that it is the largest increase in 12 months. “Last month’s unemployment was the lowest rate of the past 12 months. The last time the insurance sector reached 1.5% was May 2015. Instead, the insurance industry’s unemployed rate has averaged 2.6% over the past year. Similarly, our job boards saw a steady increase in the number of available job postings all month, with a particular focus on claims jobs.”

According to the BLS report, the insurance carriers and related activities sub sector now employ 2,621,400 people, with an unemployment rate of 1.5%. Since the beginning of the year, the insurance industry has gained 44,000 jobs while the unemployment rate has dropped 0.6% from 2.1 in January.


UnitedAg Clinic Will Have No Out-of-Pocket Costs
UnitedAg, an agricultural trade association will open its first Health & Wellness Clinic in Visalia in January 2017. Open to all UnitedAg members’ covered employees and dependents, the clinic will provide a full range of services– from acute and episodic care to health-risk and disease management to wellness and prevention –all without charging service co-pays or deductibles for most plans. Located at 315 South Johnson Street in Visalia, the UnitedAg Health & Wellness Clinic will emphasize short wait times and personalized care and feature on-site lab services and many available on-site prescriptions.

“This first UnitedAg clinic in Visalia represents a new model in health and wellness that delivers the comprehensive, high-quality services that ag workers and their families need at a cost they can actually afford. At the same time, our clinic’s operating model focuses on helping to lower our member organizations’ employee health coverage costs by treating health problems early, before they worsen. We hope this will be the first of several such UnitedAg Health & Well Clinics serving our members and their employees and dependents in the months and years to come,” said Kirti Mutatkar, president and CEO of UnitedAg. The clinic’s services will be provided by Visalia-based Elite Corporate Medical Services, a health-services provider operating workplace clinics throughout California. For more information, visit or call (800) 223-4590.

Pinnacle Hires Senior Actuary

Pinnacle welcomed Linda Brobeck as senior consulting actuary. Brobeck has been in the property/casualty insurance industry since 1986 and has been providing actuarial consulting services since 2011. She has a Bachelor of Arts degree in Mathematics from Millikin University. Her consulting career has focused on rrate making and predictive modeling for several lines of insurance, including personal and commercial automobile, homeowners and professional liability. Prior to consulting, she worked for two major primary insurance carriers.


Study Shows the Importance of Benefits
A study by Sun Life Financial finds that workers overwhelmingly agree that employers should offer voluntary benefits. Nearly two in three people recognize that voluntary benefits are helpful in filling in the financial gaps in their health coverage, even if they have to pay for those benefits themselves. The study also reveals the following:

  • 54% don’t know their out-of-pocket maximum; 33% don’t know their deductible; and 30% don’t know either.
  • 77% are concerned about financial risk with employers cutting back on health care coverage.
  • 62% agree that employer-provided health plans are rarely enough to cover unexpected costs and that additional coverage is needed
  • 94% consider other insurance offerings important when choosing a job.
  • 87% say more customized benefits choices that fit their lifestyles would help them make the right health plan choices.
  • 43% say they don’t have enough information from their employers about voluntary benefits.

For more information, visit


Fewer Older Americans Have Dental Insurance
Only 12% of older Americans have dental insurance and fewer than half visited a dentist in the previous year, according to a study of Medicare beneficiaries by the Johns Hopkins Bloomberg School of Public Health. Insurance status appeared to be the biggest predictor of whether a person got oral health care: For those with incomes just over the federal poverty level, 27% of those without dental insurance had a dental visit in the previous year, compared to 65% with dental insurance, according to an analysis of 2012 Medicare data.

Income also played a role: High-income beneficiaries were almost three times as likely to have gotten dental care in the previous 12 months compared to low-income beneficiaries, 74% of whom got no dental care. Many high-income beneficiaries paid a sizable portion of their bills out of pocket – even those with dental insurance. “Medicare is focused specifically on physical health needs and not oral health needs and, as a result, a staggering 49 million Medicare beneficiaries in this country don’t have dental insurance. With fewer and fewer retiree health plans covering dental benefits, we are ushering in a population of people with less coverage and who are less likely to routinely see a dentist. We need to think about cost-effective solutions to this problem,” says study author Amber Willink, Ph.D., an assistant scientist in the Department of Health Policy and Management at the Bloomberg School.

Eighty percent of Americans under 65 are covered by employer-sponsored programs that offer dental insurance, which covers routine cleanings and cost-sharing on fillings and other dental work. Many of them lose that coverage when they retire or go on Medicare. The vast majority of Medicare beneficiaries who have dental insurance are those who are still covered by employer-sponsored insurance, either because they are still working or because they are part of an ever-dwindling group of people with very generous retiree medical and dental benefits.

On average, Medicare beneficiaries reported spending $427 on dental care over the previous year, 77% of which was out-of-pocket spending. Seven percent spent more than $1,500. Dental expenses accounted for 14% of Medicare beneficiaries’ out-of-pocket health spending.

Poor dental hygiene not only contributes to gum disease, but also the same bacteria has been linked to pneumonia. It can also contribute to difficulty eating, swallowing, or speaking, all of which bring their own health challenges. Nearly one in five Medicare beneficiaries doesn’t have any of his or her original teeth left, according to the Centers for Disease Control and Prevention.

The researchers analyzed two separate proposals for adding dental benefits to Medicare, estimating how much each would cost. One was similar to the premium-financed, voluntary Medicare Part D benefit that was added to Medicare a decade ago to help cover prescription drugs for seniors.

It would cost an average premium of $29-a-month and would come with a subsidy for low-income seniors who couldn’t afford that, would run an estimated $4.4 to $5.9 billion annually depending on the number of low-income beneficiaries who participate.

A proposal that has been introduced in Congress would embed dental care into Medicare as a core benefit for all of the program’s 56 million beneficiaries. It is not expected to pass before Congress recesses. With a $7 monthly premium and subsidies for low-income people, it would cost $12.8 billion to $16.2 billion annually. The packages would cover the full cost of one preventive care visit a year and 50% of allowable costs for necessary care up to a $1,500 limit per year to cover additional preventive care and treatment of acute gum disease or tooth decay. “It’s hard to tell in this current political climate whether this is something that will be addressed by lawmakers, but regardless this is affecting the lives of many older adults,” Willink says. She cautions that if the costs become too high for Medicare beneficiaries, they could lose whatever wealth they have and end up on Medicaid, the insurance for the very poor which the government pays for fully.


Indexed Annuities Soar While Fixed Annuities Tank
Indexed annuity sales are on record pace for 2016. Sales are expected to hit $60 billion for the year according to a report by Wink. Third quarter non-variable deferred annuity sales were $22.8 billion; down over 12% from the prior quarter, and up nearly 0.5% from the same period a year prior. Allianz Life was the number one carrier for non-variable deferred annuity sales, with a market share of 11%. Athene USA was second with American Equity Companies, AIG, and Security Benefit Life rounding-out the top five carriers in the market. Allianz Life’s Allianz 222 Annuity indexed annuity was the number one selling non-variable deferred annuity for sales.

Total third quarter indexed annuity sales were $14.3 billion, which is down nearly 8% compared to the previous quarter and up more than 3% compared with the same period last yea. Allianz Life was the number one carrier in indexed annuities, with a market share of 17%. Athene USA moved into the second-ranked position, and rounding out the top five carriers in the market were American Equity Companies, AIG, and Great American Insurance Group, respectively. Allianz Life’s Allianz 222 Annuity was the number one selling indexed annuity for the ninth consecutive quarter.

Total third quarter traditional fixed annuity sales were down nearly 24% compared to the previous quarter, and down nearly 59% compared with the same period last year. Athene USA was the number one carrier in fixed annuities, with a market share of 31%. Jackson National took the second-ranked position. Rounding out the top five carriers in the market were Reliance Standard, Great American Insurance Group, and MetLife, respectively. Forethought Life’s ForeCare Fixed Annuity was the number one selling fixed annuity.

MYGA sales for the third quarter were $7.2 billion; down more than 18% compared to the previous quarter, and up over 18% compared to the same period last year. New York Life was the number one carrier in MYG annuities, with a market share of 17.5%. Security Benefit Life took the second-ranked position. Rounding out the top five carriers in the market were Midland National Life, AIG, and Athene USA, respectively. Security Benefit’s Life RateTrack 5-Year was the number one selling multi-year guaranteed annuity. While fixed annuity sales have been sluggish, MYGA sales are doing fairly well. Banks are driving sales of these products because rates on competing products, such as certificates of deposit (CDs), are still hovering at less than 1%. This is driving sales of these CD-like annuities. For more information, go to


Cigna Launches Personalized Service to Help Choose Health Plan

While many service providers are automating, offshoring and dumbing down their capabilities, Cigna is investing in an integrated hi-tech/hi-touch approach to customer decision support and service. Starting January 1, 2017, 1.2 million Cigna commercial health plan customers will get One Guide access to guided consultations via phone, mobile app and “Click-to-Chat” for choosing their benefits, building a personal health team of doctors, clinicians, and coaches and reducing their health expenses through reward programs. A survey of One Guide early adopters reveals the following:

  • They have 10% higher engagement rates in chronic, wellness and lifestyle health advocacy programs.
  • They have 3.2% higher transactional net promoter scores.
  • There is a 48% increase in mean incentive balance, as compared to non-users.

Streamlined Enrollment
Benefitfocus has expanded its client base in the education sector. The Benefitfocus platform integrates personalized recommendations, decision support tools and contextual videos to lighten the education burden of benefit administrators. The mobile optimized platform helps them reach a dispersed workforce. For more information, visit