Empire Leaving Small Groups

Empire Leaving Small Groups

by | Nov 4, 2011 | family health insurance, Health Care Reform, healthcare, Healthy NY, Small Business Group Health

As per todays Crains article, Empire Blue Cross will be exiting the majority of small group health plans effective April 1, 2012. The news was swirling earlier this week with official Empire communication going out today.

This affects 1/3 of New York Small Businesses as defined by 50 or less FT and eligible employees. Since with large group market the insurer is allowed to rate a group based on true census and make up of a group’s sex, age and family status as well as claims experience of the prior year. In NY State where the small group market is Community rated and independent of census this becomes an important point that I will get back to.

As healthcare has become regulated by MLR(Max Loss ratios) or revenue controls its not surprising that insurers are unhappy but why does it seem that in NYS regulations run deeper than in other states? We are licensed in multiple states and we are not seeing the same pattern this quickly. Numerous companies have already exited such as CIGNA, HealthNet, Horizon, Guardian not to mention M&A of HIP/GHI, Oxford/UnitedHealthcare and Aetna/US Healthcare/NYLCare etc. I can go on.

In NYS the insurance regulations go beyond Health Care Reform (PPACA) with higher MLR than the national one. The Federal level is 80% for small groups and in NYS its 82%

There are new NYS price controls where insurers must anticipate risk a year in advance and ask for larger rate increases to protect on anticipated uncertain risks. With so many unknown variables its almost like asking one to predict who’s going to win the Super Bowl in 2013. Rate increase of 15-20% requests must be higher than usual since after all there are no State protection on the loss side. Furthermore, increases of 10%+ must now require public hearings 60 days prior.

Today, we have so many State mandates that many of the mandates(overage dependents coverage, preventive care, pre-existing for kids) in PPACA didnt even affect NY since they were already in place. Mandates account for approx 17% of the costs of which Small Businesses pay more than fair share. Large corporations and Unions can self insure and avoid some mandates as they are governed by ERISA and not State. To the relief of of our struggling clients on subsidized Healthy NY the State doesn’t play by their own rules and instead opts out of its very own mandates.

So what happened with Empire? The tipping point evidently was rate increase denials of 5 consecutive quarters and that Empire quite frankly got caught with great pricing and products just when healthcare reform came around. Many insurers raised their rates in advance of the law. Emblem (GHI) raised rates 25% on average and even as high as 60% on HSA. Granted they have also removed many plans recently.

Much like in the 70’s its a regulaed oligipoly with insurers too too big to fail. Our clients will have access to only 3 insurer – Aetna, Emblem and Oxford. Just imagine how high your Auto Insurance would cost in the same scenario? This remarkable in a 25 million metropolis like NYC. Insurers do not have to be in NYS, no new carrier is looking to enter the NY market. After 75 years in business and insuring 4 generations of small businesses this should be a shock to the system and a wake up call to every politician.

We ask for greater oversight on Mergers and Acquisition of health insurers,providers and hospitals. Its begining to dawn on everyone that a too big to fail environment is poison and will be the tail that wags the dog. I can only imagine what the other remaining insurers must be thinking whats in store for next year.

Importantly, the community rating ought to be dropped as most states such as NJ, CT are census based. With Health Exchanges coming in 2014 individuals will be able to purchase health insurance on their own which will make Community Rating less relevant. This will be a positive step in allowing great competitors like Humana to enter the market.

If this is not a wake up call for small businesses to have a seat at the table I dont know what is. Anyone in for an Occupy Albany?

What Does Medicare Cost?

by | Nov 3, 2011 | healthcare, MEDICARE

 Yes! it has begun Medicare Open Enrollment Period which opened Oct 15th – Dec 7th is in full swing.  This is year 1 of Baby Boomers Generation applying for Medicare Benefits. This couldn’t come at a better time with all changes in the market place. Many businesses are now sponsoring Individual Medicare Plans for their senior employees and retirees. No other segment in the population can get similar benefits today. This is becoming a no brainer for many businesses as avg. rate increases are below 4% & benefits are superior.The most frequently purchased plans are Medicare Supplemental Plans (medigap).   Example, the richest option Plan F + Plan D is only$295/month which allows members to:

  • Keep Original Medicare indemnity with the freedom to go to any provider
  • $0 cost for Medicare providers
  • No referrals

Medicare Advantage Plans can provide lower monthly premiums ranging from $0 – $89.  They come in the form of Medicare PPO or HMO and is run by private health insurers.

We represent leading companies such as  such as AARP Secure Horizon and Empire’s Mediblue. Both insurers are good options with unique programs such as  AARP UnitedHealthcare’s $2 Prescription Drug Program. Importantly check the network of providers and wether or not your Rx is on their formulary.
In order to apply please call us to review first if your Doctor takes the plan and if your medications are on the formulary. The form’s take only 10 minutes to complete.
Healthy NY Slashed!

Healthy NY Slashed!

by | Oct 19, 2011 | healthcare, Healthy NY, NY News, Small Business Group Health

As reported by Crains, the Healthy NY program will be undergoing significant cuts. Beginning January 1 2012, the high deductible health plans (HDHP) option will only be offered by Healthy NY.

With rates averaging 30% below market and reasonable benefits such as $20 Office Copays this was an important safety net for NYS Small Businesses.  Since its inception 10 years ago the program has enrolled approx.180,000 members covering small groups, sole proprietors and working individuals.   The program is not Medicaid and allows members to keep their Doctors and enroll in private insurance EPO/HMOs such as Empire Blue Cross, Oxford, Emblem GHI etc.   One of the reasons the program is 30% less expensive is that the state has a pooled stop loss fund that reinsures health care companies.  This fund has been underfunded with rapid growth and stagnant funding the past 3 years.

Currently, the less expensive Healthy NY HIgh Deductible Plan is $1200/single and $2400/family. Outside of preventive care, members must self insure on the entire deductible including Pharmacy.  The good news is that this plan is a qualified HSA (Health Savings Account) and can be reinsured by members.  For healthy members the HSA unspent money is not use it or lose and can be rolled over year to year.

Existing Healthy NY groups can still keep their plans as long as long they qualify. However, Healthy NY only allows 1st of the month effective date with only an 11.1.11 and 12.1.11 still available to prospective new groups looking to lock in the regular Healthy NY.

To view current Healthy Benefits and rates click here.  For  more information or to enroll Contact us today.

Lost Jobs

Lost Jobs

by | Oct 6, 2011 | healthcare

“Almost everything–all external expectations, all pride, all fear of embarrassment or failure–these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.”

Steve Jobs
US computer engineer & industrialist (1955 -2011 )

I started on the Mac in HS and College and was forced to wander the corporate dull Microsoft PC Valley until Vista.  The Vista operating system broke our back as a Small Business with endless malfunctions and slowdowns. That monstrosity led me to MAC out our office completely 4 years ago never to look back again. 

His genius is humbling and inspiring.  In a small way we have try to live to our lives by taking chances with love and passion in everything we do.  

He was our modern day DeVinci.

2005 Steve Jobs Stanford Commencement Speech

Twitter- Thank You Steve

Steve Jobs Bio

              

UnitedHealthcare Buying Medical Groups?

UnitedHealthcare Buying Medical Groups?

by | Sep 1, 2011 | group health insurance, Health Care Reform, healthcare, PPACA, Small Business Group Health

UnitedHealthcare Buying Medical Groups?


Optum Health owned by UnitedHealth Group

Today’s WSJ reports UnitedHealth Buys California Group of 2,300 Doctors may be a signal of future trends in healthcare where there is blurring of the lines between insurers and providers.  The article goes on to to mention that United Healthcare has stated that providers acquired by Optum will not work exclusively with United’s health plan, and will continue to contract with an array of insurers.

The article goes on to state that “the potential complications that might ensue, Monarch is currently in an arrangement with United competitor WellPoint Inc. to create a cooperative “accountable-care organization” aimed at bringing down health-care costs and improving quality.”

In the aftermath of Health Care Reform, insurers profits will be curtailed. New price limitations imposed by  MLR (Maximum Loss ratios) where 85% of large group premiums collected must be spent on healthcare services(claims) and health quality improvement . New state tax surcharges such as New York’s 82% of above MLR applies to small groups.  In fact in NY the cost of doing business is a staggering 16%+ added to the usual corporate tax. See The NYS Surcharge.

 Additionally, the industry as a whole will be paying an annual tax to help pay for PPACA(Patient Protection Affordability Care Act).  This tax rises from $8 billion in 2014 to $14.3 billion in 2018 and in later years, even higher according to a complex index. See Kaiser Bill Summary .

While its unglamorous to defend insurers they are clearly paying their share and like it or not they are good  at health care management.  Unlike foreign HQ tax loop holes taken advantage by companies such as G.E. , an insurer cannot place patent rights in Zug, Switzerland and take advantage.  Each of these taxes is increased regularly by the State and contributes significantly to annual increases in rates.  The competition in the health insurance industry is already at a dangerous low levels.  Negotiating with insurers has become an overwhelming challenge in the large group market.  Hospital groups have merged to mirror this Oligopoly trend and contractual issues are the new normal.  See Empire & Stelllaris Reach pact.

So what to do other than to find profits elsewhere? Many issues and questions will abound as to the antitrust nature of this action.  A similar issue appeared in the 90s Merck-Medco merger between a pharmaceutical and mail order PBM.  The conflict of interest claims will abound, how do you negotiate one provider group owned by United-Healthcare as opposed to one owned by HealthNet? Will insurer share competitive insights with other practices?  Are small independent Dr. Groups completely left out of the loop and feel pressured to be bought out?  Will the insurers medical group have unfair advantage in buying out the smaller physician practice?   Perhaps in the same vein of the Merck-Medco analogy the health insurer shareholders will do well for a decade and then simply split up?

Its all too early to tell but this much is clear, there aint no money in running a health insurance management company today.

The NYS Surcharge on Health Insurance

The NYS Surcharge on Health Insurance

by | Sep 1, 2011 | Health Care Reform, Health Care Refrom, healthcare, Hospitals, NY News, Tax

Ever Wonder why in a Metropolis of 25 Million there are maybe 5 insurers left?

New York Taxes – As published with the NYS Insurance Dept.

New York adds more insurance taxes than any other state in the country. These consist of both direct taxes and a number of “hidden” taxes amounting to a total of over $4.1 billion in taxes passed on to our customers in the form of higher premiums. These taxes include:

• NYS Premium Tax- this 1.75% tax is on all HMO and insurance contracts and is projected to raise $353 million for the State in 2010. Empire alone pays $103.9 million to the State in premium taxes (this amount includes a special surcharge for customers in the MTA service area).

• Covered Lives Assessment- this “hidden tax” is a charge on all fully and self insured “covered lives” and raises, statewide, projected to raise $1.16 billion for the State in 2010. Empire alone will pay about $296.2 million in covered lives assessments in 2010. The purpose of the Covered Lives Assessment is raise funds for a variety of state programs and for the state Budget. The Assessment is included in claims costs for purposes of calculating the MLR.

• HCRA Surcharge- this is a 9.63% surcharge on all hospital discharges projected to raise $2.33 billion in 2010. Empire alone will pay approximately $379.4 million to the State in HCRA surcharges in 2010. The purpose of the HCRA Surcharge is to raise funds for a variety of state programs and for the state Budget. The Assessment is included in claims costs for purposes of calculating the MLR. NYS Insurance Department “332” Assessment- while this assessment is legitimately intended to fund the cost of the Insurance Department’s regulatory activities there is a “hidden tax” whereby a large portion of the revenue generated by the assessment is used to fund other programs funded not directly related to insurance regulation and is projected to raise $270 million from New York’s health insurers and HMO’s in 2010. Empire will pay the state $57.9 million in 332 assessments for 2010.

Each of these taxes is increased regularly by the State and contributes significantly to annual increases in rates.  The competition in the health insurance industry is already at a dangerous low level.  Negotiating with insurers has become an overwhelming challenge in the large group market.