HEALTHY NY SLASHED!
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.
In the last posting I very briefly mentioned how industry consolidations are shaping the future landscape of private health insurance. I want to briefly discuss some of regulatory costs results of the Massachusetts Health Care Model.
With the new Health Care Reform – PPACA (Patient Protection Affordability Care Act) there is a greater need to cut costs on administration in order to compete. New guidelines are becoming more and more onerous on insurers.
For example, a member who opts out of purchasing insurance coverage and only intends to buy a plan when sick with minimal penalty and no waiting period is a potential time bomb for insurers! When member drops out of plans when healthy again insurers have no “good years” to count on to save for the “bad years” when one is sick.
The NYS direct non-commercial market is 2 to 3 times as expensive for this very reason. A member can opt in and out any time. We are seeing the same results with the Massachusetts model of which the Reform Act mirrors. In an article by Washington DC’s media centrist , Dailey Caller, “Since the bill became law, the state’s total direct health-care spending has increased by a remarkable 52 percent. Medicaid spending has gone from less than $6 billion a year to more the $9 billion. Many consumers have seen double-digit percentage increases in their premiums.” The article goes on to quote a Boston Globe Report that found that in the first two years of the program, the state’s ER costs actually rose by 17 percent. “They said that ER visits would drop by 75 percent, and it hasn’t been even close to that,” said State Treasurer Tim Cahill, who is currently running for governor as an Independent. “It hasn’t changed people’s habits. It hasn’t been successful at getting people to use less expensive alternatives.”
In Massachusetts, people who get subsidized insurance from an exchange are in health plans that pay providers Medicaid rates plus 10 percent. That’s less than what Medicare pays, and a lot less than the rates paid by private plans. Since the state did nothing to expand the number of doctors as it cut its uninsured rate in half, people in plans with low reimbursement rates are being pushed to the rear of the waiting lines.
- The Congressional Budget Office (CBO) estimates there will be 32 million newly insured under ObamaCare.
- Studies by think tanks like Rand and the Urban Institute show that insured people consume twice as much health care as the uninsured.
- So all other things being equal, 32 million people will suddenly be doubling their use of health care resources.
- In a state such as Texas, where one out of every four working age adults is currently uninsured, the rationing problem will be monumental.
We already see a small number of Physicians leaving private and public networks. Several more are contemplating reduced hours and early retirement. Not sure how this will affect Medical Students but the prospects of reduced reimbursement, higher workload, mounting malpractice insurance costs and a hefty tuition bill cannot be positive. Will further empowering Physician Assistants and Nurse Practitioners to fill in the gaps be the solution for this shortage?
Small businesses in that state have sought State relief form double digit rate increases. State programs that businesses previously didn’t qualify for have been tested and accepted. For example, the Commonwealth Care stipulated that only groups who’s members were uninsured for more than 6 months and employers contributions were less than 33% could qualify. But groups who voluntarily terminated their plans were also now being accepted.
Sounds great, public programs are cheaper and easy to qualify? The Catch 22 for the State is that the more the employer insurance system degrades, the higher the cost is going to be for the state in providing subsidies to low income workers. The affordability of health insurance coverage to small businesses is a critically important component of health reform. With lower profit margins, small businesses have a much more difficult time affording insurance coverage than their larger competitors. As a result, only 59% of businesses with between 2 and 199 employees offered coverage to their employees. Among the smallest employers, those with between 3 and 9 employees, only 45% offered coverage according to Kaiser Family Foundation.
Insurance is simply a tool to finance the underlying cost of health care, so unless spending is brought under control, all state and federal reforms will shift the financial burden from one group to another, but not solve the underlying problem. The challenge moving forward will be to overhaul the delivery system to promote prevention, quality, and results-based care, to encourage healthy lifestyles, and to eliminate waste and fraud in the system.
A healthy stable small business insurance market is a canary in the mines. From what we’re seeing in Massachusetts the canary is not doing too well.
Read more: http://dailycaller.com/2010/03/23/skyrocketing-massachusetts-health-costs-could-foreshadow-high-price-of-obamacare/#ixzz0yCe9vijY