Study Looks At the Effectiveness of Health Policies
The Health Care Cost Institute (HCCI) released six policy briefs that look at how national and state policies affect health care costs and utilization. Researchers looked at commercial claims data for more than 50 million insured Americans. The following are Key findings:
- Provider consolidation drives up spending on cancer treatment: The consolidation of outpatient practices drove significant increases in cancer treatment spending. Hospital outpatient departments and their affiliated clinics were able to charge insurers additional facility fees. Consolidation also increased the use of more expensive medicines and other outpatient care components.
- Unrestricted access to physical therapy reduces opioid use and lowers costs: Seeing a physical therapist as the first point-of-care for lower back pain reduces potentially costly services later on, including emergency department visits and use of prescription opioids. Patients who sought physical therapy first for lower back pain had significantly lower costs, including out-of-pocket costs, for physician, outpatient, hospital, and pharmacy care compared to patients who saw another type of provider.
- Nurse practitioners push down the price of primary care: Prices for primary care services fell 1% to 4% in states that allowed nurse practitioners to treat patients without a supervising physician. However, spending on health care increased. Higher total health care costs may be a result of increased volume in services, which may stem from increased access to care.
- Designing insurance benefits to incentivize patients to choose low-priced providers for colonoscopies can lead to savings of 8.5% per procedure: Medical spending would decrease by approximately $95 million per year if just three health insurers-Aetna, Humana, and UnitedHealthcare, adopted a reference-based payment program for colonoscopies. These estimates were modeled on the health care savings of the California Public Employees’ Retirement System (CalPERS).
- Reimbursement for telehealth services is nearly 40% lower than non-telehealth care: Telehealth claims submitted by primary-care providers have increased from 1,246 claims in 2009 to 2,558 in 2013. But they continued to be reimbursed at lower rates. While many states permit reimbursements for telehealth services, only seven states have passed laws that mandate reimbursement parity between telehealth and non-telehealth care.
- Mental Health Parity law has a limited effect on access to mental health services: The Mental Health Parity and Addiction Equity Act (MHPAEA) has had little to no effect on access and use of mental health services for patients with depression, bipolar, or schizophrenia.
For more information, visit http://www.healthcostinstitute.org/state-health-policy-grant-program.
HSAs Took Off in 2015
The number of HSA accounts rose to 16.7 million, holding almost $30.2 billion in assets in 2015. That’s a 25% increase for HSA assets and a 22% increase for accounts from December 31st, 2014 to December 31st, 2015, according to a study by Devenir Research. HSA investment assets reached $4.2 billion in December, up 33% from the previous year. The average investment account holder has a $14,035 average total balance (deposit and investment account).
During 2015, health plans were the leading driver of new account growth, accounting for 36% of new accounts. HSA providers are projecting HSA asset growth of 22% in 2016. In previous surveys, HSA providers have been reasonably accurate with their growth forecasts. Devenir projects that, by the end of 2018, the HSA market will exceed $50 billion in HSA assets held among almost 30 million accounts. For more information, visit www.devenir.com.
IRS Health Care Tax Tips
The IRS offers the following tips on Forms 1040, 1040A, and 1040EZ that relate to the health care law:
- Form 8965, Health Coverage Exemptions: Complete this form to claim a coverage exemption or report a Marketplace-granted coverage exemption. Use the worksheet in the Form 8965 Instructions if you need to calculate the shared responsibility payment.
- Form 8962, Premium Tax Credit: Complete this form to claim this credit on your tax return and reconcile advance payments of the premium tax credit.
- Form 1095, Health Care information Forms: If you enrolled in coverage through the Health Insurance Marketplace, you should get Form 1095-A, Health Insurance Marketplace Statement, which will help complete Form 8962. Wait to file until you get this form. Your health coverage provider or your employer may give you a Form 1095-B, Health Coverage, or Form 1095-C, Employer-Provided Health Insurance Offer and Coverage. You do not have to wait to get these forms before your file your tax return.
- Form 1040:
- Line 46: Enter advance payments of the premium tax credit that must be repaid.
- Line 61: Report health coverage or enter individual shared responsibility payment.
- Line 69: Report net premium tax credit if the allowed premium tax credit is more than advance credit payments paid on your behalf.
- Form 1040-A
- Line 29: Enter advance payments of the premium tax credit that must be repaid.
- Line 38: Report health coverage or enter individual shared responsibility payment.
- Line 45: Report net premium tax credit if the allowed premium tax credit is more than advance credit payments paid on your behalf.
- Form 1040-EZ
- Line 11: Report health coverage or enter individual shared responsibility payment.
- Form 1040EZ cannot be used to report advance payments or to claim the premium tax credit.
For more information about the Affordable Care Act and filing your 2015 income tax return visit IRS.gov/aca. Visit IRS.gov for more information on this topic if you file Form 1040-NR or 1040-NR-EZ.
Younger Consumers Value Agents
A survey by Applied Systems and InVEST finds that Millennial (18-34) and Gen Z (16-19) consumers value in-person meetings with insurance agents. They value insurance firms that provide the customer-centric, 24/7 experiences they have become accustomed to in other industries. Reid French, chief executive officer of Applied System said, “Independent agencies need to invest in technology to provide multi-channel customer service experiences and to establish an innovative workplace to attract the next waves of insurance consumers and professionals.” The study also finds the following:
- 55% of Gen Zs and 37% of Millennials prefer to purchase auto insurance in-person.
- 29% for Gen Zs and 35% of Millennials purchase auto insurance online.
- Once they have insurance, Gen Zs prefer to meet in person. (That may include meetings via Skype or FaceTime) or over the phone. Most Millennials are happy to communicate with their agent over the phone or online.
- 51% Gen Zs and 54% of Millennials found their insurance provider based on referrals. Search engines and online reviews were the second and third most ranking sources of information on their insurance provider.
- 18% of Gen Zs and 37% of Millennials prefer communicating with their insurance provider via their website.
- For Gen Zs and Millennials, 24/7 access to information and customer service, particularly via a mobile app, is important in choosing an insurance provider. They expect 24/7 customer service via multiple channels.
- 97% of Gen Zs and Millennials say that 24/7 customer service is an important part of their decision when purchasing insurance.
- 88% of Gen Zs say that access to information and service via a mobile app as important.
- 94% of Gen Zs respondents consider having flexibility to work remotely to be important in their choice of an employer; 93% also consider working for an innovative company to be important.
- More than 60% of Gen Zs and Millennials are not too familiar with the insurance industry as providing future career opportunities.
Immediate Need Annuity
Genworth launched the “IncomeAssurance” immediate-need annuity. The medically underwritten single premium immediate annuity provides a lifetime of monthly income payments for older, less healthy Americans who need care now or in the near future. Although the income can be used for any purpose, this new product is designed to help people age 70 or older with adverse health conditions. It can offset the potentially significant costs of care with a guaranteed source of monthly income they cannot outlive. For more information, visit www.genworth.com.
Worksite Financial Solutions
OneAmerica’s plan sponsor clients can now take advantage of LPL Financial’s Worksite Financial Solutions platform. It provides retirement benefit education, advice, and assistance to participants from date of hire to their separation from the company, and beyond. For more information, visit www.oneamerica.com/companies.
MetLife’s worksite short-term disability plan provides a simple income protection solution that is easy to understand, enroll in, and use. The plan is 100% employee-paid. Features include guaranteed issue coverage, the ability to pay for coverage via payroll deduction, and auto-portability. Employees can choose benefit amounts based on their budget and protection needs, making this coverage more affordable. For more information, visit www.metlife.com.
Healthcare Price Transparency Tools
Recondo’s pricing calculator enables consumers to generate out-of-pocket estimates from an online calculator on the provider’s website, or portal. It provides a price estimate based on the consumer’s levels of insurance coverage, and the individual hospital’s negotiated rates with insurers.
The process is powered by rules-based engines that automatically query, retrieve, and combine data from payer portals with the hospital’s charge master data and payer contracts. Patients simply input their names, insurance ID number, and two to three other data elements. In 10 to 45 seconds, a complete and accurate estimate appears, giving them immediate, line-item insight into what they will owe post-procedure. Hospitals control the tools and require patient information to be entered before an estimate is generated, so not just anyone can use the calculators. For more information, visit www.recondotech.com.
Mid-Size Group Plan Management
University Conference Services is sponsoring the Mid-Sized Retirement & Healthcare Plan Management Conference March 20 to 23 in San Francisco. It will feature experts on Rx spending, fiduciary responsibility, cost containment, retirement plan fees, regulatory and legal issues, the ACA, employee communication, retirement income options, the Cadillac tax, and more. Continuing education credits are available. For more information, visit http://www.ucs-edu.net.
Covered California Selects VSP Vision Care to Offer Vision Coverage to Consumers
Covered California has selected VSP Vision Care to offer access to vision care coverage for adults throughout the state. Consumers can visit Covered California’s website which links to VSP’s vision insurance offering. Consumers will be able to sign up for vision coverage throughout the year, instead of only during Covered California’s open enrollment period. Vision care is already deemed an essential benefit for children under Covered California, but is not an essential benefit for their parents or other adults who enroll in Covered California. Covered California issued a request for proposal in November from vision plans interested in offering vision insurance.
Public Meeting on the Acquisition of Cigna by Anthem Blue Cross
The Dept. of Managed Health Care (DMHC) is holding a public meeting on the acquisition of Cigna by Anthem Blue Cross. Representatives from plans will be present. The meeting will be held in Sacramento on March 4 from 1:30 p.m. to 3:30 p.m. The purpose of the meeting is to discuss DMHC’s jurisdiction and authority to oversee the transaction and to solicit public comment for DMHC’s consideration as it reviews the transaction. Public comment will be limited to three minutes. Comments may also be submitted to email@example.com until 5:00 p.m. on March 11, 2016. For the agenda visit: https://www.dmhc.ca.gov/Portals/0/AbouttheDMHC/AgendaCignaAnthempublicmeeting030416.pdf
Man Victimized Annuity Holders
Dwen Curry, 47, of Winnetka, Calif. was arrested by Dept. of Insurance detectives and booked on multiple counts of identity theft and attempted grand theft and possession of 10 or more persons’ personal identifying information. Curry allegedly stole the identity of multiple people and attempted to withdraw funds from annuities owned by the victims. Curry allegedly used a stolen identity to submit a change of address on an annuity investment and attempted to withdraw $35,000 from two annuities owned by the victim. The crime was uncovered by an alert consumer and their insurance agent who recognized unauthorized activity on the consumer’s annuity investment. Insurance Commissioner Dave Jones said, “Consumers should pay close attention to any mail they get from their insurance company or financial institutions alerting them of attempts to access their information or make changes to their records.” Curry was arraigned in Los Angeles County Superior Court on February 16, 2016 and remains in custody. Bail is set at $195,000. A preliminary hearing is scheduled for February 26, 2016.
Southland Woman Charged In Bogus Insurance Policy Commission Scam
Teresa Marie Davis, 52, of Pomona Calif., was arrested by Dept. of Insurance investigators and booked on multiple counts of identity theft and grand theft in an alleged bogus life insurance scam that netted her over $67,000 in illegal commissions. As former licensed agent, she allegedly used the names of several businesses to establish employee payroll acknowledgments, which signified to the insurer that the businesses’ employees were eligible to apply for insurance policies. Davis also used fictitious business names and address to establish some of the payroll acknowledgments.
Davis allegedly submitted 393 insurance applications between March and October 2011, using fictitious consumer information and addresses. Davis also used four peoples’ identities to apply for insurance policies and added fictitious addresses in order to conceal her crime. Some of the people whose identities Davis used to submit fraudulent applications told investigators they got letters from the insurer about a policy, but disregarded it because they thought it was an error. Insurance Commissioner Dave Jones said, “This case is a warning…Do not simply disregard mail you get because you believe it’s an error; it could be the warning that something more serious is going on.” The insurer became suspicious when premium notices were returned for invalid addresses and the applicants’ information turned out to also be fictitious.
Life Insurance Rates Fall to All-Time Lows
Life insurance rates are at all-time lows, according to a Lifequotes.com survey of 50 leading life insurance companies. Rob Goss, executive vice president of Lifequotes.com said, “In addition to low prices, we’ve even seen a loosening of some underwriting guidelines in recent years.” The following annual sample annual premiums were obtained from a survey completed by Lifequotes.com of 50 leading life insurance companies as of February 2016:
- A 30-year-old woman who stands up to 5’8 in height and weighs as much as 190 lbs. can buy a $250,000, 10-year term life policy for only $102 per year.
- A 40-year-old woman with a cancer death in her immediate family history can buy $250,000 of 30-year level term insurance for just $299 per year.
- A 50 year-old man can buy a $500,000, 20-year term life policy for $924 per year, even if he smokes a cigar during his weekly golf outing.
- A 55 year-old man whose blood pressure is controlled by medication can buy $1 million of 20-year term life insurance for only $2,743 per year.
Long-Term-Care Insurance Industry Paid $8.15 Billion in Claim Benefits
Long-term care insurance companies paid $8.15 billion in claim benefits to 260,000 people in 2015, according to the American Association for Long-Term Care Insurance (AALTCI). Total benefit payments increased nearly 4%, and the number of long-term-care insurance policyholders on claim grew by roughly 10,000, reports Jesse Slome, director of the AALTCI. In 2014, AALTCI reported total claims amounted to $7.85 billion paid to some 250,000 people. An increase does not catch insurers by surprise. They expect this, so they have reserves set aside to pay increasing claims. In fact, in 2013, AALTCI released a study that reveals that 2032 insurers expected to pay $34 billion.