Why Self-Funding is the Future of Health Care

Health Care costs have escalated at an average rate of roughly 10% over the past decade.   In an attempt to to maintain affordable health plans in the private industry employers have been forced to direct costs towards employees.  This translates to higher deductibles, higher co-pays, and a narrower network of providers, ultimately leaving everyone unsatisfied. 

Employers familiar with self-funded worker’s comp programs are quickly finding partially self-funded health plans to be a major asset in the fight against rising healthcare costs.  Fortune 500 companies have been using this tactic since 1974 when ERISA opened new possibilities for self-insurance.  Self-Insurance has gone from abstract to mainstream as major insurance carriers like Aetna, Cigna, and even Anthem have introduced proprietary self-funded models.

Register for our next Self-Funding event, August 1st.

Although you can quickly get into the weeds when discussing the finite details of partially self-funded plans to understand them better let’s start with a basic fully insured model and work backwards.  Fully insured plans typically are a HMO/PPO model.  After selecting an insurance carrier a group sifts thorough hundreds of plans to determine what benefits they would like to offer and what is affordable to the group.  The two biggest factors that affect a groups' cost are are plan design, ( deductibles, copays, & out of pocket max,) and the network, the medical facilities available within that plan design.  As the copays and deductibles go up the cost of the insurance goes down.  As the network gets narrower the cost goes down as well.  This is pretty basic and has been the primary method of control rising costs in addition to asking employees to pay a greater share of overall premiums.  To keep cost constant the group most always take something away from their employees.

With the advent of ACA there is now a line drawn in the sand when it comes to benefit plan design.  As of January 1^st 2014 employers must offer plans that covers a minimum of 60% of an employee’s medical costs and employers cannot charge the employee more than 9.5% of their annual salary.   You can quickly see that with this law in place at some point employers will no longer be able to transfer costs to their employees.  For more information on ACA and “Pay” or “Play” penalties visit our blog.

This law applies to companies with more than 50 full time or full time equivalents.

Fully insured plans charge premiums up front

In the fully insured world an employer selects a plan and applies for insurance from a carrier.  The carrier evaluates the company based on its current rate and rate history.  Underwriting assigns a risk to the company and applies a rate corridor usually 25% above expected claims.  Assuming normal plan utilization the insurer will come out ahead.  High utilization of the plan or poor underwriting can result in higher than normal rate increases for the group.  This model is set up as a pre-pay system.  The insurer estimates how much insurance the group will use then builds in profit margins and risk loads to determine a monthly premium.  The less insurance the group uses the more profit the insurer makes.  If the group uses more insurance than estimated
by the insurance company the insurer will raise rates the following
year to recoup losses. Rates never go down under this format.  It is worth noting that part of the healthcare reform now forces insurance companies to spend a minimum of 85% of premiums on claims.  Any premiums collected over that amount now must be refunded back to the group.

Self-Funded Plans vary in structure from fully insured plans in that the group pays claims as they occur rather than a set monthly premium.  This means an employer with 200 employees paying $100,000 a month in health insurance premium on a fully insured plan might pay $30,000 one month if employees aren't using the plan and $150,000 the next month if there is high utilization.  Again, under this format the group is paying claims not set premiums.  Claims are paid directly to the medical provider through a TPA (Third Party Administrator)  The TPA provides the group with a monthly report of all claims.  This claim report complies with HIPPA but allows the employer to see where medical dollars are actually being spent.  Once the claims are approved by the group money is transferred into an account for the TPA to pay the claims.  One major benefit of self-funding is complete transparency.  Claims information can be used many different ways to fine-tune the plan and cut expenses through wellness programs and PBM re negotiations. 

Renting a Network Maximizes Discounts

The next component of self-funding is the network and plan design.  Medical carriers like Cigna, Blue Cross, and Blue Shield will let an employer, “rent” their network.  Since insurance companies provide medical groups with a high volume of patients they can demand a discount in the range of 40%- 50% off all services provided.  The insurance companies will let a group rent their discount on a PEPM basis, normally around $15- $18 a month.   The insurance company is willing to accept this arrangement since it makes a small profit and assumes no risk since there is no insurance involved. These contracts are set up through the TPA.

Flexible Plan Design allows groups to determine benefits

Plan design is determined by the group.  Since the group is no longer buying standard insurance they have the flexibility to set co-pays and deductibles where they see fit, add services like chiropractic, or exclude certain high cost brand name drugs.   Often times this is a difficult concept for groups to grasp but since they are self-insuring they now have flexibility to take on some of the roles previously administered by the insurance company, one of them being plan design and network selection.  Self-funded clients are normally surprised at how little plan design affects overall cost. This of course allows groups to offer much richer benefits to employees.  

The 3 Major Components in a SF Model are Claims,
Reinsurance or "Stop-Loss," and Administrative
Fees.  Admin fees include the TPA & Network.

The final piece of the puzzle is reinsurance.  Partially self-funded plans have an element involved called stop-loss insurance.  This functions much like your car deductible.  Stop-loss comes in two flavors, specific and aggregate.  Specific sets a ceiling on each member of the group to protect against catastrophic losses.  This ceiling is generally set somewhere between $50,000 -$75,000 but can be set higher or lower depending on the size of the group.  Once the ceiling is hit the stop-loss carrier pays all claims past that ceiling.  This ensures that the plan won’t “blow up” because of one individual person with extraordinarily high claims.  It is quite normal to have two to four stop-loss claims hit the specific ceiling on any given year for every one hundred employees on the plan.  Aggregate stop loss or “worst case scenario,” insurance covers all claims incurred by a group.  This includes everything from the cost of normal checkups to major surgery.   The aggregate sets a concrete number on the maximum yearly cost of a plan.  If a fully insured group receives a self-funded proposal and their aggregate is the same or even slightly higher than their guaranteed fully insured cost that group is a good candidate to self-fund.  Only 2% of self-funded groups hit there worst case scenario on any given year meaning their their is a huge potential to save money even with average plan utilization.   

80% of employers are better off self-funding

Health insurance conveniently plays by the 80/20 rule.  Twenty percent of people account for eighty percent of medical costs.  Health Insurance is also geographically rated meaning that your next door neighbor is adversely affecting your rates even if your group is healthy.   Self-funded plans are self-contained meaning the group pays for the insurance they use.  Stop-Loss premiums are also calculated based the previous years’ exposure.  They have the unique quality of going up or down based on usage. 

Discovery Benefit Solutions has more self-funded clients in the range of one hundred to five hundred employees than any other locally owned health broker in Southern California.  Our clients have self-funded their plans for over 20 years a continually beat out fully insured rates.  In addition to flexibility in plan design and cost saving as much as 25%, self-funding creates leverage for negotiating with fully insured carriers.  For more information on self-funding visit www.discoverybenefitsolutions.com 

By: Andrew Oram

June legislative update: URGENT: New Mandatory EXCHANGE Notice - must send out by October 1st

 

On May 8, the U.S. Department of Labor issued the mandatory employer notices regarding the Health Insurance Exchanges (Marketplaces). The mandate is to release a notice to your employees, NOT a mandate to participate in the exchange. This legislative update will provide the notices, explain what they are, and when you must provide them to your employees.     The NEW California Exchange for INDIVIDUALS and for COMPANY GROUP PLANS (called the "SHOP" exchange), will be effective 1-1-2014.  For purposes of this notification requirement, Employers will need to decide by October 1, 2013 which of the three options below they will choose relative to their benefit plans.  (option 1 is continuing with your current plan, no changes and would simply require sending out the notices).    Here's how the options break down:      1. "Play" #1: Continue to offer the same current private market medical plan (non-exchange).  Most employers will likely choose this option. 2.  "Play" #2:  Consider the new GROUP CA "SHOP" exchange products as an alternative.  (This option is only available to companies with less than 100 full time employees).  Rates are not yet available for this option.  3. Do NOT offer a group plan at all.   Employers under fifty full time equivalent employees can choose this option and not have to worry about paying a penalty.  On the contrary, employers with OVER fifty full time equivalent employees would be subject to paying a penalty.  Penalties start at $2,000 per employee per year.  Employees decide on their own whether or not to enroll in the INDIVIDUAL exchange.    Regardless of which route you choose, ALL employers will have to send one of the 2 page notices below to every single employee prior to October 1, 2013. Below are links to two forms: one for employers currently offering group coverage and one for those which do NOT. The notice text must be used and there are penalties for not distributing them by October 1, 2013, the date open enrollment in the exchanges is set to begin.  A) Model Notice for employers who DO CURRENTLY offer a health plan to some or all employees B) Model Notice for employers who do NOT offer a health plan The DOL Technical also offers information on the Model COBRA Election Notice. (See COBRA Model Election Notice for a sample)

Notice Requirements (Time Line & Parameters): 

Beginning October 1, 2013, at the time of hiring, employers are required to notify each new employee of their coverage options. For current employees, employers must provide the notice by October 1, 2013.

DBS recommends waiting to send this mandatory notice out later this summer when the exchange pricing will be finalized.  Sending it prior to then could cause confusion for your employees, since pricing is not yet available.

Starting in 2014, employers will have 14 days from an employee's start date (Date of Hire) to provide insurance coverage options via this notification. The notice must be written in language that can be understood by the average employee, and may be provided via first-class mail OR sent electronically. We recommend e-mailing it out, posting it on your intranet (shared drive) and/or a payroll stuffer...if we do not receive your request for assistance, we will assume your company has done this. We recommend keeping proof, in the event of an audit by the IRS or DOL, to prevent penalties.

IMPORTANT POINTS TO CONSIDER & TIMELINE:

  

1. DBS is an official "Health Care Reform Specialist Brokerage firm".  As a result, DBS is licensed to provide broker services for health care plans inside and outside of the exchange.

DBS will use our extensive understanding of the law to help guide you and your employees to the best option available once rates are made available.

2. Rates for the Individual Exchange have NOT yet been officially released for all age rate categories. Final rates for all age categories should be ready by June or July, and will be based on the employees income.  If their household income is less than 400% of the Federal Poverty Level (< $45k as a single, < $93K as a family of four approximately), they will potentially be able to receive TAX Subsidies to help off-set the net cost of premiums.  These subsidies, however, are only available if their employer does NOT offer "adequate" nor "affordable" health insurance. 

If, as the employer, you are currently offering group medical coverage that is both "affordable" and "adequate" your employees will NOT be eligible for these subsidies.   As a result, know that your employees will likely NOT benefit by going to the exchanges because they will potentially not receive the subsidies.  Unfortunately,without the subsidies, the cost of the exchange plans will likely NOT be lower than the private market.

3. The Exchanges are primarily intended for lower income individuals without coverage currently.

4. The Web site for the exchange is www.coveredca.com

5. Rates for the GROUP "SHOP" Exchange are also NOT yet available. We expect them to be made available by June or July. When they come out, we will automatically do the analysis for you to see if this nets a better deal than the current private plans you have.

If you have any questions, please contact your Discovery Benefit Solutions Account Manager at (888) 490-7530.

By: Michael Pondrom

Younger Adults Expect Premiums to Rise Under Reform

Nearly two-thirds of younger Americans expect their health insurance premiums to rise because of the Patient Protection and Affordable Care Act, according to a new survey.

The majority (64 percent) of the 801 Americans age 18-41 surveyed by the American Action Forum think their premiums will increase, while only 9 percent believe their premiums will fall and 17 percent think their costs will stay the same.

Respondents who have health coverage through their parent’s health plan and said they would stay on their parent’s health plan in 2014 were excluded from the conservative policy institute's survey.

Still, young adults seemed willing to pay higher premiums — at least if the increases were small enough. Fewer were willing to continue to buy insurance as potential premium hikes got larger.

The survey found that 83 percent would still buy coverage if their premiums spiked by 10 percent; 65 percent would still buy in with a 20 percent increase; and 55 percent would buy insurance with a 30 percent spike in monthly premiums.

The forum’s researchers said those findings were “troubling” for the health reform law’s success because “premium rate shock for young adults is likely, if not certain, and will, for many young adults, be north of 30 percent.”

The group cited their previous survey of large insurers, which found that the average premium increase in five major cities to be 169 percent for a young, healthy male.

In January, actuaries at consulting firm Oliver Wyman warned the law’s age-rating provision could mean a 42 percent hike in premium costs for people aged 21 to 29 when they buy individual coverage.

Supporters of the law say the age-rating restrictions are necessary to ensure seniors are fairly charged for coverage, but others argue the requirement will raise costs for young adults and lead them to forgo health insurance, which will negatively impact the entire market.

In the new survey, adults 40 and younger tended to believe the argument that the cost of insurance will increase for them because they’re generally healthier individuals with lower utilization rates.

“This data strongly suggests that should premiums increase by as much as 20 percent to 30 percent, many of these respondents could respond by dropping out of coverage and paying the penalty or waiting until they are sick to purchase health coverage,” the survey report read.

Overall, 55 percent of respondents felt they’d be helped little or not at all by PPACA compared to 33 percent who said they’d be helped some or a lot by the law.

Just 19 percent said they believe the health care law should be implemented in its current form, with most saying PPACA should be put on hold “so that policy experts can review the cost implications of the law and reassess whether it is affordable for all Americans.”

By Kathryn Mayer (Source:benefitspro.com)

Employers will keep coverage, despite PPACA, survey finds

Health insurance in the workplace won’t go away because of the Patient Protection and Affordable Care Act. But it will be different.

That’s the latest word from roughly 1,000 employers surveyed by the International Foundation of Employee Benefit Plans. Though the new report found that employers are concerned about cost increases to health benefits next year as a result of reform, virtually all employers intend to keep their coverage for full-time workers.

The majority of employers (69 percent) say they will “definitely” continue to provide employer-sponsored health care when health exchanges come online in 2014 — a 23 point increase from 2012.

Another quarter of respondents (25 percent) said they are “very likely” to continue their employer-sponsored coverage. The findings are a follow-up from preliminary results of the study released last month.

Estimates have varied widely on just what reform will do to employer-sponsored insurance, with some reports projecting 10-30 percent of employers will drop coverage. But more recent analyses — including from consulting firms Aon Hewitt and Towers Watson — suggested that figures are overblown.  Fewer than 3 percent of companies surveyed reported they were at least somewhat unlikely to continue coverage of full-time employees.

More than nine in 10 employers said they are past the “wait and see” stage of planning, and 52 percent have begun to institute changes in their benefits, according to the survey.

And their commitment to keep providing health care coverage comes despite the fact that they believe reform is increasing their costs.

Most employers (88 percent) already have seen cost increase because of provisions like the requirement that young adults can remain covered on their parents’ plans until they turn 26.

Health reform’s requirement that companies with at least 50 employees provide affordable health benefits is the primary reason most companies expect their spending on health insurance to rise in 2014. They also believe that additional rules coming next year will further their spending.

As far as the cost impact, 47 percent estimate their 2013 cost increases — directly due to PPACA — to be less than 5 percent, while 41 percent estimate it to be more than 5 percent.

Nearly one in five employers has already increased participants’ share of plan premiums and an additional quarter of respondents plan to increase the portion that employees pay for their premiums over the next year, the survey found.

Of those employers already planning to make changes, 24 percent are increasing their emphasis on high-deductible health plans with health savings accounts, while an additional 14 percent are assessing the feasibility of adding one.

Then there’s the encouragement of healthy behaviors in employees, with 19 percent of employers developing or expanding organized wellness programs within the last year. Another 14 percent of employers adopted or expanded the use of financial incentives to encourage healthier lifestyles within the past year, with another 25 percent planning to do so in the next year.

“We are seeing trends that indicate more changes may be on the horizon,” Julie Stich, research director for the IFEBP, said in a statement.

Some of those big upcoming changes include more organizations losing grandfathered status, and others redesigning their plans to avoid the 2018 excise tax on so-called Cadillac plans.

By. Kathryn Mayer (source:benefitspro.com)

Finally – Labor Dept. Sets Deadline to Tell Employees About State Exchanges

The U.S. Department of Labor just cleared up a piece of the ambiguity lurking in your health care reform communication strategy!

You may remember that the DOL delayed the original deadline to send employees notification of the state exchanges. Well, the timing is now set:  By October 1, 2013, you must tell all your employees about the state health care exchanges.

They've crafted a model notice to work from. All the details are here.

On the plus side, the language is reasonably simple and clear. On the downside, the model notice is long.

And, for those who favor print, it’s going to carry a significant cost to distribute. (Print is not required — safe harbor rules apply.)

Also on the downside, this is just temporary guidance. So, the Labor Department is leaving room for changes ahead.

We’ll have more in-depth thoughts for you soon on folding this message into your overall strategy. But, you guessed it, we suggest you stay in front of this legal message.

This article was originally published on the Benz Communications blog.

How many hours will it take to comply with PPACA?

Just how many hours is it going to take to comply with the Patient Protection and Affordable Care Act?

Enough time to build Mount Rushmore more than 1,500 times over, or to build the Empire State Building 27 times.

At least that’s according to House Republicans.

The GOP lawmakers said complying with President Obama’s health care law will take roughly 190 million hours per year — 189,822,836 hours, to be exact.

Their report — contained in what they're calling the Obamacare Burden Tracker — was compiled by staff at the Ways and Means, Education and the Workforce, and Energy and Commerce committees. It tallied 174 different requirements of the law, and totaled the amount of work required to implement those requirements. The amount of each requirement was based on responsible agencies’ own estimates.

Among the biggest time burdens? Changes to Medicaid eligibility, grandfathered plan disclosures, mandatory calorie labeling on restaurant menus and tax credits to help small businesses pay for health insurance.

“Every hour and dollar spent complying with the Democrats’ health care law are time and resources being taken from spending time with family, growing a business and creating jobs, or caring for patients,” House Republicans said in a statement.

“Since many small businesses do not employ in-house lawyers and accountants, compliance costs are especially expensive and burdensome,” they said. “Given the new demands of complying with the law, it is not surprising that over 70 percent of small businesses cite the health care law as a major obstacle to job creation.”

Republicans have been unrelenting in hammering the Obama administration over PPACA, arguing the law will do little  to actually improve health care and its costs.

More recently, top Democrats have also expressed their concerns over the law’s implementation. Max Baucus, a senior Democrat who helped write the law, made headlineswhen he predicted a “train wreck” coming for PPACA during an April budget hearing, citing concern that the exchanges for consumers and small businesses wouldn’t open on time in every state.

House Republicans launched the Obamacare Burden Tracker in February as an online resource to help the public keep track of “all of the new government mandates, rules, and red tape as a result of PPACA.” They said they will continue to update it as the administration releases new rules.

In February, the tally was at 127 million hours annually, a figure Ways and Means Chairman Dave Camp (R-Mich.) then called “just the tip of the iceberg” in challenges over the law.

“This is just another example of the Obama administration placing the burden of their policies on the backs of those who are already doing more with less time and resources — families and small businesses,” Camp said in a statement in February.

Republicans also said much of the time burden would fall on insurers, hospitals, doctors, consumers and employers.

The surge in hours of compliance, the lawmakers said, is likely to grow as the administration updates and finalizes rules as the bulk of the law goes into effect Jan. 1, 2014.

By Kathryn Mayer

Health care cost slowdown seen saving up to $770 billion

(Bloomberg) — People with health insurance saw increases in their medical costs slow from 2009 to 2011, signaling potential structural changes in the industry that could cut health care inflation and save the U.S. hundreds of billions of dollars, according to two studies.

The changes include greater use of generic drugs, higher out-of-pocket costs and more efficient care, a trend encouraged by the 2010 health care overhaul, says David Cutler, a Harvard University health economist. If they permanently slow growth, the U.S. may reap $770 billion in unexpected savings from projected expenditures by 2021, wiping out a fifth of the budget deficit, one of the studies found.

The research, published yesterday in the journal Health Affairs, suggest that while the recession accounted for almost 40% of the decline, hitting those who can’t afford care, other factors also were at work. The analysis will be part of the debate between President Barack Obama and Republicans over how to control spending growth for Medicare and Medicaid.

“Folks have gotten the message: The money flows are going to be different, and they’re very much responding to that,” says Cutler, who was a co-author of one of the reports.

The two studies aim to shed light on why the annual growth of medical spending slowed from a high of about 8.8% in 2003 to an average of about 3% per capita from 2009 to 2011, according to data reported in January by the U.S. Centers for Medicare and Medicaid Services. Total health spending in the U.S. amounted to 17.9% of gross domestic product in 2011 or about $2.7 trillion, the agency says.

Indirect effect

While neither study calculated a direct effect from the Affordable Care Act, Cutler, a former Obama adviser, says that its influence is “gathering steam over time. It’s not a coincidence these things are happening at the very same time that policies are starting to penalize re- admissions, infections and things like that.”

Opponents of the 2010 law have said the slowdown is almost entirely attributable to the recession, and they expect when the law kicks in full force next year, spending growth will begin to surge again.

In one study, researchers analyzed health spending from 2007 to 2011 by employees with insurance supplied through 150 large companies. The growth of their medical spending dropped from more than 5% annually in 2009, adjusted for increases in out-of-pocket spending, to less than 3% in 2010 and 2011, the research found.

 ‘Something else’

“I don’t want to downplay the importance of the recession,” says Michael Chernew, a professor of health care policy at Harvard Medical School in Boston who also was an author of the study. “But even if you get rid of at least the direct effect of the recession, there was really something else going on.”

The indirect effect is harder to gauge, he said. While large firms maintained health insurance for their employees, the recession may have pressured them to work harder at holding down spending growth, he says.

Cutler’s research compared the U.S. government’s growth projections for health spending from 2004 to 2012 with actual increases in the period. It found that the real growth rate was about half of the government’s prediction, leading to a gap of more than $500 billion in 2012 between the projections and spending.

Multiple reasons

The paper calculates that the recession accounted for about 37% of the slowdown in health costs from 2003 to 2011. Declining private insurance coverage and cuts in payments by Medicare, the government health plan for the elderly and disabled, accounted for another 8% and the remaining 55% is “unexplained,” Cutler wrote. That’s where the structural changes come in, he says.

If the current lower-than-expected rate of growth continues, the country may reap savings of as much as $770 billion through 2021, the research found.

Keith Hennessey, a lecturer at the Stanford Graduate School of Business and former director of the U.S. National Economic Council under President George W. Bush, says he believes growth will increase again once the health-care overhaul kicks in starting next year.

Hospitals and doctors supported the law “because they thought the increased revenues they’d get from increased demand for their goods and services would exceed lower payments for those goods and services, which suggests to me total health spending will be increasing,” Hennessey says. “As a general rule in designing federal health programs, more coverage costs taxpayers more money.”

Earlier findings

That Cutler data also contradicts an April 23 finding by health economists at the nonprofit Kaiser Family Foundation of Menlo Park, California, and the Altarum Institute of Ann Arbor, Michigan, which said the recession accounted for about 77% of the slowdown.

 “The one thing that is still clear is that I think we’re all in agreement that not all of the slowdown is attributable to the economy or to the recession,” says Charles Roehrig, the Altarum economist who was one of the authors of the earlier report.

Also in Health Affairs, research by the nonprofit Center for Studying Health System Change in Washington challenges the idea, promulgated by hospitals and insurers, that cuts in payments by public programs such as Medicare and Medicaid lead to a “cost-shift” to employers and other private payers.

Rate spillovers

Hospitals with relatively slow growth in Medicare payments from 1995 to 2009 also saw relatively slow growth in payments from private insurers, says Chapin White, a researcher at the center. A 10% reduction in Medicare payments led to a 3 to 8% reduction in private payment rates, he says.

 “These payment rate spillovers may reflect an effort by hospitals to rein in their operating costs in the face of lower Medicare payment rates,” he wrote. “Alternatively, hospitals facing cuts in Medicare payment rates may also cut the payment rates they seek from private payers to attract more privately insured patients.”

The results argue against repealing cuts in Medicare payments, he said, because that may lead to increased charges to private payers as well.

By Alex Wayne

5 Reasons to lower your Risk Adjustment Factor

   

       Until recently groups with fewer than fifty employees have been subject to Risk Adjustment Factors or RAF.  The RAF is a sliding scale ranging from .90 to 1.10 and is printed on your annual renewal. This number is multiplied by the the insurance carrier's standard group health plan rate which is published with the state of CA. normally on a quarterly basis.  The difference between a higher or lower RAF is plus or minus 10% over the standard published rate.
      One of the least talked about aspects of healthcare reform is the elimination of RAFs for small groups beginning 01/01/2014.    This has created a huge opportunity for small groups (groups under fifty employees) to cut insurance premiums dramatically for the next twelve months.
      Since insurance carriers are scrambling to grow market share before the exchange rolls out in October many are offering a guaranteed .90 RAF for groups over ten employees no matter what your current RAF is.      Although it may seem painful to change your insurance off anniversary, here are a couple of reasons you might consider doing it:

1. Your .90 RAF is locked in for a year

2. Your healthcare cost could decrease 20% without making significant changes to your plan design.   

3. Aetna, Anthem, Blue Shield, Health Net, & United offer the same network with a few minor exceptions.  This means no change in doctors or disruptions for your employees

4. Sharp offers the same network as above minus San Diego Physicians Network Group, UCSD,  Scripps, however their cost may be an additional 5% - 10% less because of the narrower network.

5. All carriers offer similar benefits meaning your id card may change but your coverage doesn't have to.

 Current RAF promos run until August. If you would like help evaluating your options please reach out to me at AndrewO@discoverybenefitsolutions.com or call 619-704-3503.  I can normally provide quotes within 48 hours.

By: Andrew Oram

How the Health Care Law Benefits You

The Affordable Care Act forces insurance companies to play by the rules, prohibiting them from dropping your coverage if you get sick, billing you into bankruptcy because of an annual or lifetime limit, or, soon, discriminating against anyone with a pre-existing condition.

All Americans will have the security of knowing that they don’t have to worry about losing coverage if they’re laid off or change jobs.  And insurance companies now have to cover your preventive care like mammograms and other cancer screenings. 

When key parts of the health care law take effect in 2014, there’ll be a new way for individuals, families and small businesses to get health insurance.  Whether you’re uninsured, or just want to explore new options, the Marketplace will give you more choice and control over your health insurance options.

Health reform is already making a difference by:

• Increasing Access to Affordable Care
• Making Care More Affordable
• Strengthening Medicare
• Holding Insurance Companies Accountable
• Laying the Foundation for 2014

Increasing Access to Affordable Care

Millions of Americans have gained new access to more affordable health coverage and care.

• Coverage for young adults: 3.1 million young adults who were uninsured have gained coverage by being able to stay on their parent’s health plan, giving their families peace of mind.
• Access to free preventive services: 71 million additional Americans now receive coverage through their private health insurance plan for many preventive services without cost sharing such as copays or deductibles. That means that more Americans will receive wellness visits, cancer screenings and other services that will help them get and stay healthy. Women can now get coverage— without cost-sharing—of even more preventive services they need.  Approximately 47 million women now have guaranteed access to additional preventive services without cost-sharing for policies renewing on or after August 1, 2012.
• Coverage for people with pre-existing conditions: Over 107,000 Americans with pre-existing conditions have gained coverage through the Pre-Existing Condition Insurance Plan. This temporary program makes health coverage available and more affordable for individuals who are uninsured and have been denied health insurance because of a pre-existing condition.
• Investing in primary care: The health care law invests in training and supporting thousands of new primary care doctors and nurses by providing bonus payments, scholarships and loan repayment, and new training opportunities.
• Community Health Centers: Community Health Centers improve the health of the nation and assure access to quality primary health care services at more than 8,900 service delivery sites around the country. Since the beginning of 2009, health centers have increased the total number of patients served on an annual basis by 3.1 million.

Making Care More Affordable

The health care law is bringing down health care costs and making sure health care dollars are spent wisely.

• 80/20 Rule: The health insurance companies of 76 million Americans now have to meet the 80/20 rule, or Medical Loss Ratio, where they must spend at least 80 cents of your premium dollar on your health care or improvements to care. If they fail to meet this standard, they must provide a rebate to their customers. Already, the 80/20 rule is helping deliver rebates worth $1.1 billion to nearly 13 million consumers – an average rebate of $151 per household.
• Reviewing premium increases: For the first time ever in every State, insurance companies must publicly justify any rate increase of 10% or more. And the law gives States new resources to review and block these premium hikes. To date, rate review has helped save an estimated $1 billion for Americans and 42 States have used their rate review grant funds to make the rate review process stronger and more transparent. Since this rule was implemented, the number of requests for insurance premium increases of 10% or more has dropped dramatically, from 75% to 14%. The average premium increase for all rates in 2012 was 30% below what it was in 2010 this slowdown has continued into 2013.
• Small business tax credits: Small businesses have long paid a higher price for health insurance – often 18% more than larger employers. Tax credits for small businesses will benefit an estimated two million workers who get their insurance from an estimated 360,000 small employers who received the credit in 2011. In 2014, small business owners will get more relief with tax credits and affordable insurance choices in the new competitive health insurance marketplace in every State.
• Supporting early retiree coverage: The Early Retiree Reinsurance Program (ERRP) has provided $5 billion in reinsurance payments to employers so they can continue to provide benefits to their retired workers who are not yet eligible for Medicare. This program has reduced premiums or cost sharing for at least 19 million early retirees, workers, their spouses, surviving spouses and dependents.

Strengthening Medicare

Nearly 50 million seniors and Americans with disabilities depend on Medicare every day. The health care law makes Medicare stronger and extends the life of the Medicare Trust Fund by eight years.

• Reducing prescription drug costs in Medicare: Over 6 million seniors and people with disabilities have saved more than $5.7 billion on prescription drugs thanks to the Affordable Care Act. These savings include a one-time $250 rebate check to seniors who fell into the prescription drug coverage gap known as the “donut hole” in 2010, and a 50% discount on brand-name drugs. Seniors in the “donut hole” have saved an average of $706. 
• Medicare preventive benefits: The Affordable Care Act makes many key preventive services available with no co-pay or deductible to help ensure that seniors don’t have to skip a potentially life-saving cancer screening because they can’t afford it. In 2012 alone, an estimated 34.1 million seniors received one or more free preventive services, including the new Annual Wellness Visit.
• Saving money for seniors: The average person with Medicare will save approximately $5,000 from 2010 to 2022, while those with high prescription drug costs will save much more – as much as $18,000 over the same period. This is especially good news for people with chronic conditions such as diabetes and high blood pressure who must take their medication every day for many years.
• Fighting fraud and saving taxpayer dollars: The health care law helps stop fraud with tougher screening procedures, stronger penalties, and new technology. In 2012, the government’s health care fraud prevention and enforcement efforts recovered a record $4.2 billion in taxpayer dollars from fraudsters. And for every dollar spent on health care-related fraud and abuse investigations in the last three years we recovered $7.90. Over the last four years, the administration’s enforcement efforts have recovered $14.9 billion. And in total since 1997, the Health Care Fraud and Abuse Control Program has returned more than $23 billion to the Medicare Trust Fund. Learn more about these efforts at StopMedicareFraud.gov.

Holding Insurance Companies Accountable

Under the law, patients have more rights and protections – and more security that their coverage will be there for them when they need it. For example:

• No more pre-existing condition denials for children: The parents of over 17.6 million children with pre-existing conditions no longer have to worry that their children will be denied coverage because of a pre-existing condition.
• No more lifetime dollar limits on coverage: 105 million Americans no longer have a lifetime dollar limit on essential health benefits. Annual dollar limits are set at increasingly higher amounts until January 1, 2014 when most plans issued or renewed are banned from having an annual dollar limit on coverage.
• Insurance companies can’t drop your coverage when you get sick: You no longer need to fear that your insurance company can rescind or take away coverage when they get sick because of an unintentional mistake on an application.
• No more coverage denials without appeal: Many Americans with private coverage now have the right to appeal an insurance company’s coverage decision and the Affordable Care Act provides you with information and assistance to give you more control over your health care decisions.
• Helping consumers understand their coverage: The Health Insurance Finder on HealthCare.gov gives you information about the health plan choices in your community. Starting in September 2012, health plans must provide you with clear, consistent and comparable information about their health plan benefits and coverage. The Summary of Benefits and Coverage forms will enable you to easily understand your health coverage and determine the best health insurance options for your family.

Laying the Foundation for 2014

Starting in 2014, the Health Insurance Marketplace will make it easy for you to compare qualified health plans, get answers to questions, find out if you are eligible for tax credits for private insurance or health programs like Medicaid and the Children’s Health Insurance Program (CHIP), and enroll in a health plan that meets your needs.

• Building the Health Insurance Marketplace: The Affordable Care Act gives States the resources and power to build and run their own Marketplace, sometimes called an Exchange. Forty-nine States, the District of Columbia, and four territories have, having received at total of nearly $3.6 billion in Exchange Grants.
• Ensuring Health Insurance Choices: The Affordable Care Act creates a new type of non-profit health insurer, called a Consumer Operated and Oriented Plan (CO-OP). These insurers are run by their members. CO-OPs are meant to offer consumer-friendly, affordable health insurance options to individuals and small businesses. To date, a total of 24 non-profits offering coverage in 24 states have been awarded over $1.9 billion.
• Banning the Worst Insurance Practices: Starting in 2014, the Affordable Care Act will prohibit health insurers from charging more or denying coverage to people because of pre-existing conditions. It will also make charging women more for health insurance a thing of the past.

(Source: healthcare.gov)