Dave Fluker's California Health Insurance Blog

Wellpoint Partnering With Primary Care Physicians

2012-01-27T10:42:00.000-08:00

WellPoint (parent company of Anthem Blue Cross), the second largest health insurer in the United States, has established an innovative, patient-centered primary care program that will increase the company's investment in the practices of primary care physicians (PCPs) and in the health of their patients.

WellPoint Press Release (1/27/12)

The program will be initiated in the 3rd quarter of 2012 with anticipation of 100% implementation in all WellPoint states (14) by 2014.

Participating physicians will be able to earn additional revenue in the following ways:

*General increase to the regular fees paid to physician practices for specific services.

*Payment for “non-visit” services currently not reimbursed, with an initial focus on compensation for preparing care plans for patients with multiple and complex conditions.

*Shared saving payments for quality outcomes and reduced medical costs.

Dave
www.davefluker.com

California Child-Only Health Insurance Refresher

2012-01-25T08:29:00.000-08:00

Apparently there is a great deal of confusion with regard to child-only individual health insurance policies in California. I thought it would be a good idea to review it here.

Under SB 2244, all children in California under age 19 are eligible to purchase a child-only health insurance plan and they cannot be denied coverage for pre-existing conditions.

It is very important to understand that there is no guaranteed-issue application nor pricing level for children as a direct purchase. Children under 19 applying for individual health coverage must apply for underwritten coverage just like everyone else. If the insurance carrier determines that the child is an acceptable risk then they will issue coverage at the appropriate rating level relative to the risk.

Only if the child is DECLINED for coverage through underwriting do the guaranteed-issue rules come into play. It's not like HIPAA or Major Risk (PCIP or MRMIP) with direct guaranteed-issue pricing and application. Children MUST be underwritten first and declined for coverage before any rules about guaranteed-issue coverage are on the table.

IF the child is declined for coverage through medical underwriting, then the guaranteed-issue rate provisions are utilized to issue coverage on the child.

The rates for declined children who are issued under the child-only guaranteed-issue rules are as follows:

1. Late Enrollee - if a child is considered a late enrollee then the guaranteed-issue rate for that child after a denial from underwriting would be set at approximately double (2X) the standard premium for the plan

2. Not a Late Enrollee - if child is not considered to have late enrollee status and is not in birth month, then the guaranteed-issue rate for the child after denial from underwriting can range from about 350% to 450% above the standard premium for the plan

3. Surcharge - if the child has any gap in coverage between the date of last creditable coverage and the application submission date of the new coverage, the carrier will access a 20% surcharge for one full year above whatever premium rate applies to the child.

I hope this helps to clear up the confusion regarding this issue. Children in California under age 19 are guaranteed-issue in the sense that they cannot be denied coverage. However, the cannot just apply for guaranteed-issue coverage and skip the medical underwriting process. Guaranteed-issue for children in California only applies to children who are denied coverage through medical underwriting.

Dave
www.davefluker.com

Anthem Medicare Advantage LPPO and Sutter Health Group

2012-01-23T18:11:00.000-08:00

Sutter Health Group and Anthem Blue Cross MAPD LPPO (Medicare Preferred PPO and Medicare Preferred Select LPPO) have been unable to reach agreement on a new contract.

As of February 1, 2012, Sutter will no longer be a participating provider for Anthem Blue Cross CA hospital and professional network. The ancillary services for Sutter will continue to be a participating provider.

Again, this contract issue affects Medicare Advantage PPO and Medicare Advantage LPPO subscribers. The following Sutter Health facilities are affected:

Sutter Roseville Medical Center - Roseville, CA
Alta Bates Summit Medical Center - Alta Bates/Herrick - Berkeley, CA
Alta Bates Summit Medical Center - Summit Campus - Oakland, CA
California Pacific Medical Center - California - San Francisco, CA
California Pacific Medical Center - Davies - San Francisco, CA
California Pacific Medical Center - Pacific -San Francisco, CA
California Pacific Medical Center - St. Lukes - San Francisco, CA
Eden Hospital Medical Center - Castro Valley, CA
Memorial Hospital Medical Center - Modesto - Modesto, CA
Memorial Hospital of Los Banos - Los Banos, CA
Menlo Park Surgical Hospital - Menlo Park, CA
Mills Hospital - San Mateo, CA
Novato Community Hospital - Novato, CA
Peninsula Hospital & Medical Center - Burlingame, CA
San Leandro Hospital - San Leandro, CA
Sutter Amador Hospital - Jackson, CA
Sutter Auburn Faith Hospital - Auburn, CA
Sutter Coast Hospital - Crescent City, CA
Sutter Davis Hospital - Davis, CA
Sutter Delta Medical Center - Antioch, CA
Sutter General Hospital - Sacramento, CA
Sutter Lakeside Hospital - Lakeport, CA
Sutter Maternity & Surgery Center - Santa Cruz, CA
Sutter Medical Center of Santa Rosa - Santa Rosa, CA
Sutter Memorial Hospital - Sacramento, CA
Sutter Solano Medical Center - Vallejo, CA
Sutter Tracy Community Hospital - Tracy, CA

I expect that at some point a contract agreement will be reached and will post when that happens.

Dave
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Anthem Blue Cross Medicare Supplement Rate Change 2012

2012-01-20T09:59:00.000-08:00

Anthem Blue Cross of California has a rate change going into effect on March 1, 2012 for Medicare Supplement plans. This rate change does not affect the individual & family under 65 plans which will be addressed for July, 2012.

Dave
www.davefluker.com

Blue Shield CA Holding Medicare Supplement Rates

2012-01-20T09:55:00.001-08:00

Blue Shield of California has a rate change scheduled for March 1, 2012 for Individual & Family health insurance plans. This rate change does not apply to Medicare Supplements.

Blue Shield of California passed on a Medicare Supplement rate change last August and continued to pass on a rate change again for March 1. 2012.

Current Blue Shield of California Medicare Supplement rates are from 2010 and have not been changed nor adjusted. As of today, Blue Shield of California has no plan to make any rate changes to their Medicare Supplement plans.

I would expect this to be addressed again for August, 2012.

Dave
www.davefluker.com

California Mandatory Maternity Benefits SB 222

2012-01-13T08:50:00.000-08:00

Effective July 1, 2012, all individual & family health insurance plans in California must provide maternity coverage to subscribers.

The Bill, SB 222, was passed into law in late 2011 and requires all individual & family health insurance plans in California to include coverage for maternity including prenatal and postnatal. This includes plans registered with both the CA Dept of Managed Health Care (DMHC) and the CA Dept of Insurance (CDI). The law, signed by Gov Brown in 2011, estimates an average cost increase (premium) of about $7 per month per subscriber.

As of this date none of the California health insurance carriers selling individual & family coverage have announced how they intend to implement the new benefits. I expect most if not all carriers will simply add the benefit to existing plans without creating a new series of "open" plans to accommodate the new benefit.

This benefit additiona affects all individual & family health plans. Anyone currently on a non-maternity coverage plan in California will have the benefit added on July 1, 2012.

CA SB 222

Dave
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Anthem Blue Cross and Feller-Freed Class Action Settlement

2012-01-10T18:38:00.000-08:00

In addition to the Anthem/Serencsa class action settlement (covered in my previous blog post--link below), Anthem Blue Cross California also has a settlement under the Feller-Freed class action. Use the link below to review Anthem/Serencsa as it applies differently than Anthem/Feller.

Anthem Blue Cross Serencsa/Lichtman Settlement

Feller-Freed deals with the following "closed" Anthem Blue Cross of California health plans: PPO Share 500, PPO Share 1000, PPO Share 1500 and PPO Share 2500. These plans were closed in 2009 and are not available for new enrollments. Feller-Freed differs in several ways from Serencsa/Lichtman (Serencsa only applies to PPO plans registered with the CA DOI).

Under Feller-Freed, Anthem Blue Cross CA has agreed to the following terms:

1. There is an annual open enrollment for plan changes for anyone on the closed PPO Share plans. This enrollment period is November 1 - December 15 of each calendar year for 2011, 2012 and 2013. It may or may not be extended to 2014.

2. Under the settlement, members who are currently enrolled in the PPO Share 500, 1000, 1500 and 2500 are entitled to a discount on future rate increases, if any, as specified in the settlement. Those currently enrolled who exercise their transfer option under #1 above will not be entitled to any possible discount of future rated.

3. Those who exercise the plan change option at annual open enrollment may have a higher rate on their new policy than their old policy.

Feller-Freed provides moves from the closed PPO Share plans to a variety of open plans (both CA DOI registered and DMHC registered) and also the option to move to another closed PPO Share plan with higher deductible than the original Share plan.

Anthem Blue Cross has provided agents with a transfer options matrix for Feller-Freed affected subscribers. There are specific plan change options available during each annual open enrollment.

As with Serencsa-Lichtman, Feller-Freed provides selected Anthem Blue Cross of California subscribers with remedy in the event of substantial rate increases on the original plans. Serencsa deals with certain PPO plans registered with the CA DOI and had a different set of rules regarding transfer options.

In both cases (Serencsa and Feller) it is very important for members on affected plans to be aware of their internal options with Anthem Blue Cross of California when looking to change to lower-cost coverage or make any plan changes.

Link to Feller-Freed Settlement web site

Neither Serencsa nor Feller apply to HIPAA guaranteed-issue plans.

Dave
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Anthem Blue Cross and Serencsa/Lichtman Class Action

2012-01-08T09:59:00.000-08:00

I have talked to a number of people who have called me with existing, grandfathered Anthem Blue Cross health insurance coverage. Because they are experiencing rate increases on what are essentially "closed" plans, they are looking to change coverage to a lower-cost health plan. In many cases, the medical underwriting of another health insurance carrier might yield a less-than-positive result and they may experience a rate up costing the same or more than their current plan or possibly a decline of one or more family members.

Often people don't realize that they have protections under the Serencsa/Lichtman (San Mateo) class action settlement with regard to their Anthem Blue Cross CA policies. In cases where Serencsa applied, I have to recommend that they keep their current coverage and use the benefit under Serencsa at the appropriate time.

What is Serencsa/Lichtman?
The Serencsa/Lichtman Class Action Lawsuit regards a health insurance carrier's habit of "blocking" health plans. Essentially, as a population ages on an existing health plan (and experiences health issues), a carrier may close that plan to new sales/enrollments thus effectively "blocking" that plan. Normally those who are on the blocked plan either move to a different lower-cost plan via underwriting or stay on the blocked plan if health is not good enough to pass a medical underwriting. The Serencsa action was to affect a change in policy with Anthem Blue Cross regarding closed plans (grandfathered) which were no longer available to purchase due to PPACA (Obama Care). It created a remedy for Anthem Blue Cross CA subscribers to change coverage options and have the ability to move from a blocked grandfathered health plan to an open PPACA-compliant plan.

What is my benefit under Serencsa with Anthem Blue Cross CA?
If you are currently enrolled in a BC L&H PPO plan with Anthem Blue Cross CA which was purchased prior to Sept 23, 2010, you have the right to elect coverage change to any current BC L&H PPO plan without any medical underwriting.

Initial open enrollment with Anthem Blue Cross was offered in early 2011 and has passed. In order to elect a change of plan under Serencsa for those who qualify, a plan change without underwriting is available between now and 12/31/2013 at any rate change period on the grandfathered plan. Anthem's next focal renewal for rate change is scheduled for July 1,2012. This is a one-time plan change option.

As an example:

Family A purchased the SmartSense 1500 PPO plan in July, 2009. They would like to find a lower-cost, higher-deductible plan with similar benefits because the price has gone up on their plan. Unfortunately, the husband was recently diagnosed with melanoma and is still undergoing treatments (he would be a decline for underwriting). Because Family A is on a grandfathered SmartSense PPO plan (purchase prior to 3/23/2010) at the next rate change for their plan, the family can elect to move to an open non-grandfathered SmartSense Plus 3000 PPO plan and reduce their monthly premium with no medical underwriting.

I have added a link here to the Serencsa/Lichtman FAQ which offers more detailed information with regard to the benefits and settlement.

I feel that it is important for Anthem Blue Cross CA subscribers to know whether or not their plan is eligible for protection under Serencsa. It is also important for health insurance agents to inform individuals & families of their protection under Serencsa if their plan is qualified and they have not yet elected a plan change. For the majority of individuals & families in California who are on grandfathered health plans with Serencsa protection, it would generally not be in the client's best interest for an agent to recommend changing insurance companies to lower premiums rates.

Express Scripts and Walgreens

2012-01-05T10:32:00.000-08:00

Effective January 1, 2012, Walgreens is no longer contracted with Express Scripts.

For those with health insurance plans using Express Scripts as the pharmacy contract provider (Anthem Blue Cross, TRICARE), you will be required to change your provider pharmacy if you are using Walgreens pharmacy.

Dave

California PCIP Receives Additional Funds

2011-12-20T08:57:00.000-08:00

California PCIP has received additional federal funds to expand the enrollment cap. Projections from November minutes of the MRMIB indicated that the PCIP would have to lower the cap on subscribers from the estimated 23,100 down to 6,800.

The additional federal funds in conjunction with the rollover of 2011 funds will be used by MRMIB to increase the number of slots for enrollment in CA PCIP above the 6,800 cap. Final enrollment cap is not provided at this time by MRMIB.

This is good news for those with high risk health conditions who may have been denied enrollment in CA PCIP due to enrollment cap.

Letter from MRMIB
Cheers!

Dave

California PCIP Substantially Lowering Enrollment Numbers

2011-12-02T09:21:00.001-08:00

California PCIP has lowered the number of available slots due to excessive utilization of benefits. The CA PCIP will cap enrollments at 6,800 down from the originally projected 24,100 by 72%.

CA PCIP was granted funding in 2010 to establish the risk program run by the MRMIB (Major Risk Medical Insurance Board) which also runs the MRMIP -- California's state risk program.

The funding was intended to provide health insurance coverage for those who were uninsurable and had not had coverage in more than six months prior to applying. Original utilization projections were between $1000 and $1,100 Per Month Per Member. Actual utilization has been determined at $3,100 Per Month Per Member, over three times the projected usage. (see MRMIB November PCIP Agenda Item)

CA PCIP is currently seeking an additional $500,000,000 of funding to increase the available member slots to 11,247, still over 50% below the original projection of 24,100 member slots. If such additional funding is not received from the Obama administration, the CA PCIP will remain capped at 6,800.

CA PCIP currently has over 5,000 people enrolled in the plan. Once the plan hits the maximum enrollment of 6,800 (this could happen very soon) it will close to new enrollments. The process for future applications after the pool is full have not been disclosed. It may close or there may be a waiting list.

Cheers!
Dave

Blue Shield CA Continues 'New to Medicare' Supplement Discount

2011-11-07T18:10:00.000-08:00

Blue Shield of California currently offers a discount of premium for the first 12 months to those who are turning 65 or otherwise "new to Medicare". The discount is $20.00 per month off of the premium for each of the first 12 months. For those who wish to use the checking deduction payment options (EFT), an additional $2 discount is available.

In addition, Blue Shield CA Medicare Supplement plans include Silver Sneakers at no additional cost.

Blue Shield is planning to continue the discount for those "new to Medicare" into 2012. This discount combined with the free Silver Sneakers benefit makes Blue Shield Medicare Supplements very competitive in California.

For more information, give me a call, e-mail or use the Information Request Form on my web site.

Dave
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Anthem Blue Cross CA Discontinues Short-Term Policies

2011-11-07T15:41:00.000-08:00

Anthem Blue Cross California will discontinue the sale of short-term health insurance policies effective January 1, 2012. Those on existing short-term policies will be able to continue until their normal end date.

This is no surprise as Anthem removed short-term policy applications from our online agent web sites a few months ago.

You may continue to purchase a short-term policy with Anthem Blue Cross in California until the end of the year.

We are discontinuing new sales for all Short Term policies effective January 1, 2012 for California. Applications will continue to be accepted and processed if we receive them by December 30, 2011 for effective dates on or before December 31, 2011

Dave
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Blue Shield CA Medicare Supplement Discount

2011-07-29T10:22:00.000-07:00

Starting August 1, 2011, Blue Shield of California will be offering a $20 per month premium discount for 'new-to-Medicare' Supplement enrollees. This discount applies to anyone who is new to Medicare (just enrolled in Part B). Generally this applies to those turning 65 although certain 'late enrollees' can qualify who are over age 65.

The discount is good for one year for eligible applicants. An additional $2 discount is available for those who are eligible also choose the Easy Pay method of paying monthly premiums.

This represents a great value to those going onto Medicare and a Supplement Plan.

Contact me for more information.

Dave (www.davefluker.com)

Blue Shield CA New 15-Day Enrollment Rule

2011-06-10T10:00:00.000-07:00

Mirroring Anthem Blue Cross' current requirement, Blue Shield of California announced (9 days after it went into effect,btw) yesterday to agents that effective June 1, all individual & family applicants start dates cannot be set less than 15 days prior to Blue Shield's receipt of the application.

For PPO plans, the start date must be 15 or more days after the receipt date. Example: Application received on June 10th soonest start date June 26th.

For HMO plans because they only have a 1st of the month start date, any application received by Blue Shield after the 15th of a month (earlier for February) would start the 1st of the following month. Example: Application submitted on June 10th soonest start date Jule 1st. Application submitted on June 20th, soonest start date would be August 1st.

Cheers!

Dave (www.davefluker.com)

Anthem Blue Cross CA Premium Payment Final Update

2011-06-10T09:50:00.000-07:00

This is a final update for Anthem Blue Cross individual & family plans premium payment changes.

Effective August 1, 2011 Anthem will eliminate the following premium payment methods:

*Recurring Credit Card
*Bi-monthly Billing
*Quarterly Billing

There will be three premium payment options available to subscribers. All should have received information from Anthem by mail regarding these options. They will be:

*Monthly Direct Billing ($2 fee will be waived until further notice)
*Checking Accound Deduction (EFT) Monthly
*Ability to pay premiums via Anthem web site (anthem.com/ca)

The use of the web site will require creation of a login and there is no charge to pay premiums via the web site.

Cheers!
Dave (www.davefluker.com)

Anthem Blue Cross CA To Add Paramedical Exam Requirement

2011-05-16T18:28:00.000-07:00

Effective 6/15/2011, Anthem Blue Cross California will begin requiring (and paying for) a paramedical exam for certain applicants. This is a new requirement, however it has been done in the past but at the applicant's expense. Now it will be paid for by Anthem Blue Cross.

The following situations will require a paramedical examination paid by Anthem Blue Cross CA:

1. Applicants 55 years or older who have not seen a doctor in 24 months or more;

2. Applicants 30-54 years old who have not seen a doctor in 5 years or more

Situations like this are fairly uncommon although I have seen a few cases where the new paramedical exam would apply. The good news is that the applicant no longer will have to pay for the exam themselves!

Cheers!

Dave (www.davefluker.com)

Part 2: The Economics of Individual & Family Health Plans (California)

2011-04-06T12:17:00.001-07:00

This chart shows the total population of California (for 2010 37,253,956)and the breakdown of health insurance coverage for each of three segments of the total population (you can click on the graph to see an enlarged version).

Approximately 5.64% of California's population are covered by individual & family health insurance. 72.62% are covered under an employer plan or government program like Medicare or Medi-Cal (California Medicaid). Sadly, approximately 21.74% of the California population (based on latest media estimates) have no coverage for health care. To put it simply, 4 times as many people in California have no health insurance as have individual & family private health coverage.

As covered in Part 1 of this series (PART 1), subscriber attrition combined with continual rate increases will eventually render any individual health plan unsustainable. Add into the attrition of existing subscribers the much larger pool of non-subscribers (uninsured) and this is a recipe for disaster. Imagine a situation in California where 4 times as many drivers have no auto insurance coverage as those who do. That would create a property & casualty nightmare for auto insurers (and most would exit the state of California).

One thing I often ponder is whether or not new people from that 21.74% uninsured pool are actually even entering the health insurance system at all. For years my primary focus was on HIPAA plans moving people from employer-sponsored plans to individual coverage with pre-existing conditions. That market brings people across from the big pool of 72.62% covered under employer/government. And, since Medicare is basically automatic (Part A) for anyone who is eligible turning 65, the largest pool is self-sustaining. However, when it comes to the 5.64% currently insured by private health plans, I wonder if there is really very much in- and out-migration or if, in fact, the same pool of approximately 2.1 Million are simply being moved from plan to plan or carrier to carrier. Given that the pool of uninsured has risen by almost 2 Million since this recession began I believe it is likely that at least some percent of currently insured individuals & families were already insured either on another plan or with another health insurance carrier. It does little good in the system to simply transfer an insured from one plan/carrier to another. The objective needs to be addressing the enlargement of the individual & family pool drawing from the uninsured pool. It would be like Allstate writing auto insurance on a bunch of people who had State Farm and vice verse. The production numbers would look great but the reality is that no more people became insured than were already insured. They just became insured differently.

The focus for individual & family health insurance needs to be a combination of maintaining the existing subscribers (minimize attrition) and attracting new subscribers over from the uninsured pool. Considering that the uninsured pool in California has grown by a reported 2 Million at least, obviously that focus is not working.

We know that people on individual & family plans are generally fine with the plans and coverage so long as rates are not going up at a ridiculous rate. So the first step is to keep them happy by helping to keep their rates in check and reasonable. Stability of the existing pool is the first priority. Losing members of that pool would simply exacerbate the problem and do nothing to fix it.

As to the pool of uninsured, I will go so far as to allow 50% of that pool to fall into one of two categories:

1. Eligible for Medi-Cal or other state/county coverage but not currently enrolled;
2. Uninsurable for underwritten health insurance due to medical/pre-existing conditions

That leaves the market with about 4 Million potential health insurance subscribers who, for a variety of reasons, choose not to pay for health insurance coverage on themselves and their families.

A part of the PPACA that is currently being challenged is the mandate to have coverage. Absent a mandate or other requirement to maintain coverage, it is up to the public, independent agents and health insurance companies to devise products and programs that will attract a sizable portion of that uninsured population into the market.

It also important for independent agents to assist where ever possible in making sure that eligible individuals & families who cannot obtain private insurance or who qualify for public programs get enrolled whether it is PCIP, MRMIP, AIM, Healthy Families, Medi-Cal and so on.

In Part 3 of this series I will address some ideas and solutions I believe would go a long way towards alleviating the imbalance in the individual health market. I hope you'll stay tuned.

Cheers!
Dave (davefluker.com)

The Economics of Individual & Family Health Plans (California)

2011-04-05T18:53:00.000-07:00

I recently began questioning the health insurance companies as to what they suggest to turn the individual & family health insurance market around. My premise is that either the market, itself, is unsustainable or that the insurance companies are not giving us relevant guidance on how to repair a crippled market.

So far the answer has been "we need to be able to raise rates". I find this economically inappropriate. As you will see below, raising rates does nothing to stabilize the market.

This graph is an example of a linear curve between the premium for health insurance and the gross revenue generated by the premium increases. Revenue is represented by the blue line and premium by the red line. Each step in the premium increase is $50 per month over 20 periods. This is, of course, a completely untrue presentation of what really happens when insurance carriers increase health insurance premiums. Premium increases do not encourage more subscribers to buy or remain on the plan. In a fantasy world, the premiums would increase, gross revenues would increase and the number of subscribers on the plan would increase at the same time.

Now, here's a more realistic picture of what happens over time as health insurance carriers continue to increase premiums to make up for increasing costs on individual and family coverage (you can click on either graph to view and enlarged version).

On this graph, the gross revenue is reflected by the blue line, premium by the red line and I have added subscriber/member population as the green line. Economics refers to the "law of diminishing returns" and this graph is very similar to the tax theories of economist Arthur Laffer (the 'Laffer curve'). Many will remember Laffer's theory referred to by then-candidate George HW Bush as "voodoo economics".

This second chart is my representation of what happens to a health insurance plan over time. Initially the revenue is zero because the plan has zero premium and is not being sold for free. Initial premium in step 2 is $100 per month for a subscriber as the health plan begins to attract new buyers. Each rate increase increment 3-20 is $50 per month until, at step 20, the monthly premium has escalated to $1000 per month from the original $100.

Things flow fairly smoothly initially and gross revenue and subscriber population continue to increase for a period of time (about step 13). However, at step 13 the monthly premium has risen to over $600 per month and subscribers are beginning to feel the pinch (and frustration). This range now creates a plateau where the number of people leaving the plan and the number of people buying the plan are about equal.

As premiums continue to go up to cover costs for the increasing claims of the long time subscribers (who may not be able to move plans because of medical/underwriting issues). Gradually after the plateau the only thing continuing to increase is the premium for the health plan. Revenue and subscriber population is beginning to decrease and the health plan is now experiencing "diminishing returns" and is beginning to bleed money.

The three rate increases between steps 16-19 (rates increasing from $800 to $950 per month) show a rapid decline in revenue and subscribers. Anyone who can do it will dump this overpriced plan in favor of new coverage at lower cost (and start the cycle all over again). At step 19 ($950 per month) the subscriber population exceeds the revenue curve and the plan is now a financial disaster for the insurance company. Note that at no time after step 1 does the subscriber population go back to zero. This is because there will be some number of people who will remain on the plan no matter premium or because they can't switch to a new plan for medical reasons.

One thing not on the chart is an industry practice knows as "blocking" This is when a health insurance carrier decides that the losses mounting from the health plan (usually they will pull the trigger around step 17 or 18) and the inability to attract new members requires them to close the plan off to any new enrollments and start shifting the current members onto 'new' plans. Once a plan is blocked, any members remaining on the plan may represent a high claims pool and could be subject to wild fluctuations in rates over time. Most choose to move to a new offering and get into an open pool attracting new members.

What we learn from this as that all health insurance plans will eventually implode at some point in the future when they become too expensive to manage. We also see that arbitrarily raising premium rates to make up for overall losses may work for a while, but will eventually create problems.

We have seen so much of this in the last decade. Does anyone remember the following health insurance plans?

-RightPlan 40 PPO
-PPO Share 500/1000/1500/2500
-PPO $10/$20/$30/$40
-Spectrum PPO 500/750/1000/1500/2000
-ActiveChoice PPO

And the list goes on..................

Dave (davefluker.com)

California MRMIP and PCIP

2011-03-29T16:32:00.000-07:00

Just wanted to post a quick note that I have added a separate page to my web site for MRMIP and PCIP in California. The information will continue to be available on the state programs page, but I didn't want to bog that page down with MRMIP and PCIP information as it is more a general information page.

By adding a special section for MRMIP and PCIP in California, I have the opportunity to expand the information concerning these risk pools and dedicate the necessary room on my site.

The MRMIP and PCIP California information including enrollment materials, rate information and plan summaries can be found here: California MRMIP & PCIP Plans.

Dave (davefluker.com)

Anthem Blue Cross CA Delays Premium Payment Change

2011-03-29T10:40:00.000-07:00

Anthem Blue Cross recently stated that they would elminate month recurring credit card payments as a premium payment option on individual & family health plans.

Agents were recently notified that this change will be pushed out at least two months beyond the May 1 original deadline. Until futher notice, credit card premium payments will continue with Anthem Blue Cross CA. I will advise when and if the final date of change for this is actually set.

Dave (davefluker.com)

Blue Shield CA Cancels May 1 Rate Increase

2011-03-16T18:33:00.000-07:00

Blue Shield of California has announced this evening that the health insurer is officially withdrawing the proposed May 1 rate increase. Blue Shield is further guaranteeing no further rate action for the remainder of 2011 on all CDI (CA Dept of Insurance) registered PPO plans (excluding HIPAA and Conversion). This affects approximately 340,000 California residents.

Blue Shield originally proposed a rate increase set for March 1, 2011 (The third since October , 2010). The carrier agreed to hold off 60 days on that rate increase to allow California Insurance Commissioner Dave Jones time to have an audit of the rate increase performed. The audit found the rate increase to be in-line and justified.

Those currently enrolled on Blue Shield CDI-registered underwritten PPO plans (not including HIPAA or Conversion) will have no rate change at all until at least 1/1/12.

Read Blue Shield's Press Release here

Dave (davefluker.com)

Health Net CA Security Lapse Affects 1.9 Million

2011-03-15T09:08:00.000-07:00

IBM, which manages Health Net's technology infrastructure, recently notified Health Net that it cannot find several computer hard drives. These drives store information on subscribers (past and current), employees and healthcare providers. The drives contain information related to approximately 1.9 million people.

Health Net has agreed to provide two years identity theft protection to those affected. You can get more information from Health Net by calling (855) 434-8081.

This is the second security lapse in the California health industry. Anthem Blue Cross had a breach which compromised some online information about a year ago. In both cases, the security breach was the fault of the third-party technology vendor, no the health insurer. Seems the people who are supposed to build and maintain the technology are lacking, at least in these two cases.

LA Times Article

Dave (davefluker.com)

Blue Shield CA Cumulative Rate Increase Could Exceed 85% For Some

2011-03-14T18:50:00.000-07:00

The newest rate increase on Blue Shield CA/Blue Shield L&H individual and family plans in California is now set for May 1, 2011. It was originally scheduled for March 1, however it was delayed 60 days at the request of California Insurance Commissioner Dave Jones.

This rate increase represents the third rate increase on Blue Shield family plans since October 2010. Blue Shield increased rates on 10/1, again on 1/1/11 to accommodate PPACA (ObamaCare) and now again on 5/1/11. For some these rate changes will have a cumulative increase of over 85% in just seven months.

Blue Shield, even with the rate increase projects losses in individual & family business in California of $20-$30 million in 2011. They lost $27 million in 2010. By contrast Anthem Blue Cross CA estimates losses as high as $100 million on the same business for 2011 with almost $70 million lost in 2010.

See the LA Times article by Duke Helfand.

Dave (davefluker.com)

3 Minutes of Brilliance (Jack LaLanne) You Can't Buy Health

2011-03-13T11:16:00.000-07:00

Jack LaLanne, the 'godfather' of fitness, has been one of my personal idols since I was a child. This video from over 50 years ago is perhaps more pertinent today than it was then.

Dave (davefluker.com)

Anthem Blue Cross CA To Change Premium Payment Options

2011-02-25T09:30:00.000-08:00

Anthem Blue Cross CA will be making the following changes to premium payment options for individual & family health insurance plans (including dental and life).

By May 1, Anthem will eliminate the monthly recurring credit card payment option. Those currently on monthly credit card premium payment will be required to change to another option.

Anthem will offer a monthly direct billing option (currently it is only bimonthly or quarterly)and will continue to offer checking account deduction option.

Letters will be mailed from Anthem to subscribers concerning this change and the options available. Those on credit card premium payments will need to make an alternate arrangement to pay premiums for their health insurance policies.

Dave (davefluker.com)

BSE, Mad Cow, Creutzfeldt-Jakob disease - Fellow Veterans

2011-02-08T18:27:00.000-08:00

Good evening. This particular blog is not really so much about health insurance as about a health issue I only recently discovered. It is directed to my fellow military veterans who served in the UK and/or Europe as well as any of my readers who lived in Europe for an extended period between 1980 and 1996 (between three and six months or more).

I was stationed in Berlin, Germany from 1983-1986 serving with the USAF Electronic Security Command (ESC) as a Cryptologic Slavic Linguist.

We are prohibited from ever donating blood. I had no idea! Apparently anyone who lived or was stationed pretty much anywhere in the UK or most of continental Europe during those years is at risk due to exposure to Mad Cow Disease (BSE) and possible development of vCJD (Creutzfeldt-Jakob Disease).

There is no "test" for these so the blood banks and Red Cross take the approach of just refusing to avoid any potential future problems. From my reading, the incubation period for these diseases is basically unknown but could be 30 years or longer.

So if you or someone you know is refused the opportunity to donate blood because of having been stationed in the UK/Europe during those periods, that is the reason.

I wonder what my doctor will say when I bring this up on my next office visit?

An article about blood donation and BSE/vCJD

On a side note, those of us stationed in Berlin during the period I was there were also given a 'dose' of radiation from the Chernobyl nuclear meltdown (26 April 1986). I left Berlin just three months later.

Dave (davefluker.com)

California's Hidden Non-Dependent Tax On Health Premiums

2011-02-08T08:37:00.000-08:00

A part of the PPACA (ObamaCare) provides that parents may add children to their employer-sponsored coverage plan up to age 26, whether a dependent student or not.

Turns out California's tax law requires the state to levy taxes on any amount of premium paid by the employer for non-dependent children of employees.

Many California workers added non-dependent children under age 26 to their group health plans in favor of paying premiums for the coverage. According the the Sacramento Bee article, the result is a bump in taxable income to reflect the employer's contribution.

See the article here.

Florida Halts PPACA Implementation

2011-02-02T18:06:00.000-08:00

On Monday, Florida US District Judge Robert Vinson declared the PPACA (ObamaCare) unconstitutional. This sets the stage for appeals and eventually the US Supreme Court. Because the 'individual mandate' requiring all Americans under 65 (not insured by an employer or government program) to buy health insurance or face a fine was deemed as unconstitutional and was written as non severable, the mandate itself renders PPACA as a whole unconstitutional (per Judge Vinson).

In the first of what will undoubtedly be several state rebellions, Florida today shut down all further implementation of the PPACA (ObamaCare) in the state and retracted a MLR (medical loss ratio) waiver that had been submitted. 27 States were represented in Judge Vinson's decision (not California)and it might be expected that the remaining states may take similar action in the near future.

Article here

Dave (davefluker.com)

Blue Shield CA Agrees To 60-Day Rate Hold On Individual Plans

2011-02-01T13:42:00.000-08:00

Blue Shield of California (and Blue Shield Life & Health) announced this afternoon that the company will abide by the request of Insurance Commissioner Dave Jones and hold the March 1, 2011 rate increase for 60 days so that the rates can be reviewed.

Late last week Blue Shield stated that they were satisfied with the rate increase and would not honor the request of the CA Insurance Commissioner.

For those with Blue Shield CA individual & family health plans who are not in your initial rate guarantee period, your rates will not be increasing on March 1 as projected.

Blue Shield will notify agents as to when, if and by how much the rate increase will actually go into effect.

Dave (davefluker.com)

Anthem Blue Cross CA Finally Gets Approvals!

2011-01-13T16:37:00.000-08:00

Just received a voicemail from Anthem Blue Cross California that the plan portfolios held up by the California Dept of Insurance have finally been approved.

These plans have been pending approval since September 22, 2010.

According to the voicemail the new plans (all PPACA-compliant) will be available for sale tomorrow (1/14/11) to the public.

I will update this post with the particulars of the plans now available as soon as I receive the written confirmation in the morning.

Dave (davefluker.com)

Health Net CA Individual Plans Approved!

2010-12-22T10:06:00.000-08:00

Health Net CA has announced this morning that they have received regulatory approval to sell their new January 1 plans to individuals & families.

Health Net CA (not including the Farm Bureau) will only be offering 3 total individual health plans for January 2011. These include:

*HMO 40
*ValueNet PPO
*Optimum Advantage HSA PPO

That's it folks. I have the rates and paper applications available for use until the online quoting and application system goes live for these plans.

Dave (davefluker.com)

Anthem CA Quote Upload Available Today (New Plans)

2010-12-18T12:28:00.000-08:00

The Anthem Blue Cross CA quoting and application system has been uploaded and is currently quoting the new approved individual & family health plans for 2011 (PPACA-compliant).

The new plans quoting include:

*Tonik 5000 PPO
*Premium Plus PPO (six deductible choices)
*PPO Share 3500, 5000 and 7500
*HMO plans

You can get quotes for the current plans via my link

Lumenos HSA plans will not be available for online quoting until approximately January 20, 2011. For more information on Lumenos HSA, send me an e-mail as I have the rates available at this time.

Plans still pending CDI approval are

*Core Guard PPO
*SmartSense PPO
*Clear Protection PPO
*some Lumenos PPO & HSA

Dave (davefluker.com)

Child Only Health Insurance California 2011 -Anthem Blue Cross Live Blog

2010-12-17T10:33:00.000-08:00

I am blogging this live while attending an Anthem Blue Cross conference call. Important news concerning Child-only health insurance coverage in California beginning January 1, 2011 for children under 19.

Per CA AB 2244, children may apply for coverage without a parent being a co-applicant during certain periods. This includes both healthy children and children with pre-existing conditions who need guaranteed-issue coverage. Children receiving guaranteed-issue coverage can be rated up in premium (as of today) but cannot be declined.

The enrollment periods will be as follows:

*January 1,2011 - March 1, 2011 Open Enrollment Period
*The Birthday Month of the Child (regardless of which day in the month)

Outside of these open enrollment windows, children will not be able to apply for coverage on child-only coverage policies. Outside of the open enrollment or birthday month, children will only be allowed to apply with a parent as co-applicant (and the parent must be approved for coverage for the child to be offered coverage).

Anthem will be imposing a 15-day waiting period for effective dates on all individual health plans beginning January 1, 2011. So a child-only PPO application submitted January 1, 2011 will be eligible for a start date of January 16, 2011.

As soon as I find out how the rate-ups are going to be set up for children-only guaranteed-issue health coverage, I will post a blog.

Anthem states that the maximum cutoff age to apply is 18 3/4 years of age.

Anthem Blue Cross CA Partial Plan Release 12/10

2010-12-10T10:13:00.000-08:00

Anthem Blue Cross has announced that a portion of the health plans held up for approval by the CDI (California Dept of Insurance) have been approved and are available for sale today.

In addition to the 3 HMO plans and PPO Share 3500 and 7500 which were previously approved for sale, the following plans are now available today for quoting and applications:

Premier Plus PPO (1000, 1500, 2500, 3500, 5000 and 6000 deductibles)
Lumenos HSA PPO 1500 (non-maternity)
Lumenos HSA 5000 (with maternity)
Tonik 5000 PPO
PPO Share 5000
PPO Share 1000

Anthem has indicated that plan online quotes and applications for the new plans will be available Saturday, 12/18 and after.

Quotes and plan summaries can be found on my Anthem Plan Finder
Click on "Get Quotes" under "individuals & families" and it will open the planfinder in a new window.

Still pending are:

SmartSense Plus
Core Guard Plus
Clear Protection Plus
Lumenos Plus

MLR and Agent Commission (and the future) California

2010-12-08T21:28:00.000-08:00

As many of you may have heard, the health insurance carriers have begun announcing commission reductions to agents due to MLR (Medical Loss Ratio) requirements under PPACA. Blue Shield CA just left us all a nice voicemail this evening (after business hours BTW) about commission cuts. The average for an agent is approximately 50% pay cut in 2011 (starting in 3 weeks).

No doubt that is going to hurt and it is possible many agents (especially newer agents) will leave the health insurance business. Veteran agents may be able to withstand the slash on new business compensation because of a large client base of older business which will be, at least for now, uneffected by the cuts.

I have observed in the last few days an attempt by agents, insurance carriers and organizations that train, recruit or mentor agents, to justify this going forward. To the extent that reduced earnings on health insurance would allow fewer agents to achieve higher potential production at lower commission (the overall thought process), certainly there could be a place for those fewer agents to continue to succeed in this business. Except.............

What happens on 1/1/2014? Let's say a savvy agent sets up a staffed call center (the chosen model by the carriers, obviously), hires a bunch of service reps, sub-agents and telemarketers and garners a large volume of sales to achieve the highest commission payouts. That could be a lucrative business model right up to the point where the health insurance exchanges open in 2014. Then what?

Imagine an agent selling 300+ health insurance policies in 2011, 2012, and 2013 (over 900 total) and watching the 900+ clients disappear into an insurance exchange offering no compensation or virtually no compensation to the agent. All of that work for a couple of years of income at already-reduced commissions to see it all evaporate in the blink of an eye.

Now there are agents who are whistling past the graveyard saying "that's not going to happen", "repeal is on the way", "NAHU will protect our earning power." Now, they may be right.

I am inclined to believe what I see, not what I think/hope might happen. Sure changes could be made. Sure a panel could be set up to review agent compensation. Since this change has ALREADY happened (compensation and MLR), the pragmatist in me says to anticipate that the 2014 changes will occur basically unchanged and on schedule.

"Well", some might say, "there will still be a place for agents in the system". Don't be so sure. We are not specifically mentioned in PPACA. At best we are included with navigators like Dept of Fish & Game, Trade Unions, Civic Organizations and the like. It's us, community service organizations and someone spawning salmon in the pond.

The California Health Exchange is a fact. It was passed into law and signed by Gov Schwarzenegger a few months ago. It exists and regardless of what happens with PPACA (ObamaCare), the California exchanges would have to be repealed separately.

The architect of the future California Exchange is the same person who set up the Massachusetts Connector Exchange. I won't mention his name here but you can certainly Google it.

Agent compensation in Massachusetts for indivdiual & family health insurance is..........zero, nothing , nada, bupkiss, the big 'goose egg' (insert your favorite phrase here).

So, the same guy who set up 'the big goose egg' in agent compensation in Massachusetts will be very heavily involved in setting up the California Exchange. Sure, it could be different out here, but are you really willing to bank on it.

Health insurance agents in California will have to make some hard decisions going forward. Some will bury their heads in the sand and hope it all goes away. Some will swear on all that is Holy that big brother NAHU (National Assn of Health Underwriters) and Janet Trautwein will ride in on a white horse to save the day. Some will move on to other things like life insurance. And some will stick it out and try to make the best of a lousy situation over which they have no control.

The bottom line is this for agents: "Am I willing to work twice as hard for half as much with the very real risk that it could all go away anyway in three years?" I wish I had the answer, for myself and for other agents. As of today, I just don't know.

PCIP Premium Decrease (HHS)

2010-11-09T16:41:00.000-08:00

According to recent press, the federal government has indicated that it plans to decrease the premiums for the federal PCIP (temporary risk pools) by 20% in order to encourage greater enrollments.

Apparently enrollment in the new PCIP has been lackluster at best.

I do not yet know if the decrease will be applied to the CA PCIP as it is being run by the state (MRMIB) and not a direct federal risk pool.

Unless the government can find more $$$ to pump into the pools, this is going to likely create a reduced number of enrollment slots meaning less people will be able to be covered at the lower premium.

California's PCIP is scheduled to hold an average of 23,100 people at any given time with a possible increase in two years if scheduled federal funding is available. Obviously a 20% premium decrease under existing funding ($761MM) would likely lower the number of subscribers by that same percentage.

Health Net CA Blackout Coming Up

2010-11-04T12:16:00.000-07:00

Health Net of California has announced a blackout for individual & family coverage plans (IFP) in a couple of weeks. The blackout will be lifted when the new PPACA-compliant plans are approved and available for January 1, 2011.

The blackout will occur on November 18th (online quoting), and the last day to submit applications for December 1, 2010 start dates will be November 22nd. Any applications received after 11/22 will not be processed.

Any application submitted on or before 11/22 that is not approved and enrolled by 12/10/10 will be cancelled and returned to the applicant.

Health Net CA will advise agents as to the progress of the PPACA-compliant plans and at what point applications and online quoting will be made available after the blackout.

This blackout does not effect HIPAA plans, only underwritten coverage plans.

Congratulations Rick Bronstein!

2010-11-03T21:49:00.001-07:00

Rick Bronstein, a fellow agent and friend, ran for the office of CA Insurance Commissioner in the 2010 election.

Rick placed third in the race and garnered almost 300,000 votes. Not to shabby for a 3rd party candidate with no corporate backing nor war chest.

Congratulations, Rick. You certainly made them take notice. Now, get back to work LOL!

Anthem Blue Cross CA Update

2010-11-03T21:39:00.000-07:00

Just wanted to update on my suspending sales with Anthem Blue Cross CA.

I have spoken with Anthem concerning my issues with their processes and am supposed to be receiving some correspondence from "on high" regarding my issues and concerns. As of today I have not yet received anything from Anthem in this regard. I understand the correspondence has to be cleared by the legal department due to technical nature (I am sure it's HIPAA-related).

I am willing to work with Anthem Blue Cross to resolve these concerns and to assist people in buying both guaranteed-issue HIPAA coverage and underwritten coverage (one the plans are actually available -- they are still blacked out pending DOI approvals).

In the meantime, I am continuing with Anthem Blue Cross small group products as they are a good carrier for the types of groups with which I specialize (spousal/family).

I just wanted to update and let you all know where things stand.

LA City Attorney Sues HealthMarkets

2010-10-21T11:36:00.000-07:00

The Los Angeles City Attorney's Office has filed a lawsuit against HealthMarkets, Mega Life & Health, Midwest National and has included Goldman Sachs and Blackstone Group.

The lawsuit alleges, amongst other things, deceptive sales practices, inadequate insurance coverage and intentionally misleading marketing practices.

Read the story here

California Exchange Bills Signed Into Law

2010-10-01T10:05:00.001-07:00

The Governor signed both health insurance exchange bills into law yesterday in California.

AB 1602 and SB 900 (companion bills) were signed yesterday, paving the way for the creation of the California Health Insurance Exchange.

I will update as the process moves forward with information on the exchange, how it will work, when it might be operational and so on.

California PCIP (Federal Risk Pool) Delays Open to October 7

2010-09-30T11:17:00.000-07:00

The California PCIP (Pre-existing Condition Insurance Program) has announced a delay of one week for opening of the coverage program.

MRMIB anticipates coverage to go into force on October 7, 2010.

Anthem Blue Cross HIPAA Enrollment Change (California)

2010-09-23T10:57:00.000-07:00

Effective October 1, 2010, Anthem Blue Cross California will institute a new enrollment process for HIPAA applicants.

Beginning 10/1, applicants will have start dates as follows based on application submission (WITH premium):

1st-15th of the month, 1st of the next month
(ex. Apply 11/1-11/15 start date is 12/1) (one month gap)

16th-31st of the month, 1st of the second month
(ex. Apply 11/16-11/30 start date is 1/1)(two month gap)

In order to avoid gaps in coverage, I need all Anthem HIPAA applications to be submitted to my office at least 30 days PRIOR to the requested effective date.

Anthem Health Plan Blackout (California IFP)

2010-09-22T18:31:00.000-07:00

Anthem Blue Cross of California has today suspended it's online application program for individual & family health plans. The application will be unavailable until approximately October 1. I will update when it becomes available.

For those seeking quotes for Blue Cross coverage plans (non-HIPAA), currently over 75% of the plan portfolio is not available for sale pending Dept of Insurance approval of plan designs and rate changes. The PlanFinder tool will still work via my web site (www.davefluker.com) however it is currently only quoting the DMHC registered plans that have been approved (the expensive plans). I will update as soon as I receive word as to the availability of the new DOI-registered PPO plans.

These plans are currently being changed to meet PPACA guidelines including elimination of lifetime caps and addition of no-cost preventive services.

Currently Anthem is pending approvals for the following plan portfolios:

-SmartSense PPO
-Clear Protection PPO
-Core Guard PPO
-Premier PPO
-Lumenos PPO (HIA and HSA)
-3500 HSA PPO plan

These represent the lower-cost and non-maternity plans in the California market.

Should you use the PlanFinder tool, you will only be able to view the HMO plans and the two Share PPO plans (3500/7500) at this time.

Anthem Blue Cross CA Eliminates Child-Only Enrollments

2010-09-17T09:28:00.000-07:00

Effective 9/23, Anthem Blue Cross CA will no longer offer individual coverage plans to children under 19 as a stand-alone enrollment. Children of any age may apply for coverage as long as they are applying with parents/guardians over the age of 19. However, Anthem will no longer accept applications for children-only under the age of 19.

Several carriers in many states have taken similar action in recent weeks. It appears that Anthem across the 14 states they cover will take this action in all states. Other carriers have also instituted the same policy.

PPACA requires insurers who provide child-only coverage to insure all children under 19 regardless of health conditions. HHS is supposed to provide guidance to the insurance companies regarding open enrollment periods, however such guidance has not yet been forthcoming. As such, Anthem CA (so far) has chosen to stop selling health coverage plans to children under 19 at least until HHS provides clarification on the open enrollment.

Carriers have indicated that, absent an open enrollment schedule, many people would leave children uninsured until they have a medical emergency/condition and then purchase coverage at that time to cover it. This would create severe adverse selection problems.

Anthem BC CA has indicated that the company will review this upon HHS delivery of specific open enrollment information.

As of today, Anthem's portal will no longer quote children-only coverage under 19 and as of 9/23 no children-only plans will be sold by Anthem Blue Cross.

PacifiCare Fined $9.9 Billion by CDI

2010-09-08T07:53:00.000-07:00

PacifiCare is once again the target for CA Dept of Insurance regulatory action.

A couple of years ago, the carrier was fined $1.2 Billion for poor claims practices.

Aocording to the article below, PacifiCare committed over 1 million violations of California law between 2006-2008.

I have maintained for several years my refusal to contract with this carrer, as have many CA health agents.

This is going to hurt if enforced.

LA Times Article

California PCIP (Federal Risk Pool) Opens

2010-08-31T18:36:00.001-07:00

The PCIP (Pre-existing Condition Insurance Program), also referred to as the Federal Temporary Risk Pool, is now open and accepting applications for enrollment.

The PCIP is an individuals-only enrollment with no dependents. Rates are set correspondent to the standard rate for a similar $2500 deductible PPO plan on the open market in California. PCIP will use a larger network of providers than MRMIP, approximately 65,000 should be available. The PCIP plan offers both in-network participating benefit levels and and out-of-network non-participating benefit levels.

Applications received by the 10th of the month will be enrolled for the first of the following month.

According to MRMIB, which will run the program for California, agents may assist applicants in the enrollment process for PCIP and receive a $50 fee the same as currently available on the MRMIP program.

Eligibility for the PCIP consists of the following:

1. California state residency as evidenced by applicant having a California address or other appropriate documentation as determined by MRMIB

2. US Citizenship and immigration status for applicants obtained through questions and supporting documentation

3. Applicant has a pre-existing health condition as evidenced by a denial letter from a health insurer or acceptance in a health plan which has rates in excess of PPO rates in the MRMIP (state risk program)

4. Applicant has been without creditable coverage for a least 6 months prior to applying for the PCIP

The California PCIP intends to provide enrollment to an estimated 23,000 California residents. By comparison, MRMIP, the state major risk plan, enrolls a maximum of 7,100. If the PCIP is a maximum enrollment in 2012, the federal government may grant additional funds to the CA PCIP to increase enrollments.

I will place a PCIP application on my web site as soon as it is available for download from MRMIB. It will be available here

Here is the final BROCHURE for the California PCIP including plan summary and rate guide.

California PCIP (Federal Risk Pool)

2010-08-26T12:41:00.000-07:00

MRMIB has published the final document for PCIP (Pre-existing Condition Insurance Program) which includes both rates and plan summary of benefits.

Rates are reasonable and benefits fairly rich.

PCIP Summary

October 1 Rate Increases on Individual Health

2010-08-26T10:48:00.000-07:00

October 1 will see major rate increases by both Anthem Blue Cross and Blue Shield of California.

Blue Shield will average 18.2% increase but some age groups may experience rate increases as high as 50%!

Anthem Blue Cross will average 14% with a max rate of 20% increase.

Interesting article from today's Sacramento Bee.

In addition, Anthem Blue Cross has currently blacked out all individual and family health plans for new enrollments on 9/23 and after to replace the current plans with newer, PPACA-compliant plans. I have heard rumors that we may see the end of lower-deductible versions of some plans in favor or high and very high deductibles to offset preventive benefits and childrens guaranteed-issue.

California Health Insurance Legislative News (Lots of it!)

2010-08-25T18:59:00.000-07:00

Big day in Sacramento today. And with 8/31 deadlines looming, we will likely see more activity.

California AB 1602 (Perez) and SB 900 (Alquist) has passed and is awaiting the Governor's signature to make it law. AB 1602 sets up the California health insurance exchange. I expect this to be signed as Gov Schwarzenegger indicated earlier this year that he wants the exchange model set up before he leaves office.

SB 900 sets up the exchanges, and AB 1602 which is a companion bill delineates the specific duties of the exchange.

AB 1825 has passed the Senate and now goes back to the Assembly for final action. AB 1825 requires mandatory maternity benefits on all health plans sold in the individual market.

AB 2244 prohibits insurers from refusing coverage to children simply because they have a pre-existing condition. AB 2244 also goes back to Assembly now for final action.

Other Bills to watch:

SB 890 (Alquist) - sets requirement for health plans to offer only 5 plan designs either inside or outside of the exchange. Gold, Silver, Bronze, Platinum and Catastrophic.

AB 2345 (De La Torre) - prevents insurers from charging an additional co-pay for cancer screenings and other types of preventive care

AB 2042 - (Feuer) - prohibits insurers from raising premiums more than once per year.

CA Individual Plan Upgrades (PPACA)

2010-08-25T16:04:00.000-07:00

As of today, this is what I am being told regarding individual & family health plan updates to comply with PPACA benefit requirements.

Anthem Blue Cross upgrading for 9/23 currently blacked out pending approvals (no plans currently available for sale after 9/22 start dates).

Blue Shield, Health Net and Kaiser are all targeting plan change dates of 1/1/11 to upgrade new plans to PPACA compliance. Their current plans will be available for purchase through 12/31/2010.

Exising plans purchased before these upgrade dates will also be upgraded, but each carrier will decide when and how the upgrades will occur. They can either upgrade on the renewal month of the plan or at one time.

CA AB 2042 Moves To Assembly

2010-08-24T09:13:00.000-07:00

CA Assembly Bill 2042 passed the state Senate yesterday (21-13) and now goes to the Assembly. AB 2042 would prohibit health carriers selling individual & family plans from raising rates more than one time per year.

AB 2042 only applies to individual coverage, not to group coverage.

CA Health Bills Up Against Deadline

2010-08-23T12:51:00.000-07:00

There are currently four bills in process in Sacramento which need to be passed or rejected by August 31, 2010. If they are not passed or rejected, the bills will die.

The following are the applicable bills:

AB 2578 (D. Jones) - Requires approval from state regulators for increases in health coverage premiums.

SB 1163 (M Leno) - Would require insurers to justify denials of coverage and premium increases.

SB 900 (E. Alquist) and AB 1602 (J. Perez) - Companion bills would establish health insurance exchanges in California to comply with PPACA.

PPACA Update on Existing CA Plan Upgrades

2010-08-20T11:13:00.000-07:00

I wanted to add that it may happen that some or all carriers choose to make the PPACA-compliant changes to existing plans on one unified date. Likely this will be the portfolio renewal date.

So, it may be that your existing pre-9/23 healthcare plan gets the upgrade at the renewal of your plan anniversary or on January 1, 2011.

Realistically it makes more sense cost- and logistics-wise for a carrier to make the unified upgrade instead of spacing them out over a period of 12 months.

I will post when I receive clarification from each carrier on how they intend to process the upgrades to existing coverage plans.

9/23/10 What Happens To My California Healthcare Plan?

2010-08-19T18:24:00.001-07:00

Have been doing some digging this week on the future of healthcare plan changes for the upcoming 9/23 PPACA compliance requirement. I wanted to outline for everyone in California what the most likely scenario will be for your current and/or future healthcare plan. I expect the process to be generally uniform amongst the carriers.

As I understand it today (this is of course all subject to be changed), plans will be handled as follows for the 9/23 PPACA.

New Subscribers - new subscribers who purchase coverage on or after 9/23 will be purchasing healthcare coverage plans (not yet approved) which comply in full with the PPACA requirements. These plans will be fully compliant right from the start.

Existing Subscribers - existing subscribers, whether on a grandfathered healthcare plan (purchased prior to 3/23/10) or on a non-grandfathered healthcare plan will receive the PPACA compliant changes to their plan at the next renewal anniversary date of their plan. Anyone purchasing a plan between today and 9/22 start date will be considered an "existing subscriber". Example: a person purchased an Anthem Blue Cross SmartSense PPO plan on April 1, 2010. The plan renewal will be April 1, 2011 and at that time the PPACA benefit "enhancements" will be applied to that plan.

Group Subscribers - group health plans purchased after 9/23 will also be PPACA compliant. Plans purchased before 9/23 will be treated the same as existing subscribers on individual plans and benefits will be "enhanced" at the group open enrollment renewal month.

Certain PPACA plan changes will apply to all plans, regardless of grandfathered status. Other PPACA changes will only apply to plans which do not have grandfathered status.

Welcome To The Blackout

2010-08-19T16:12:00.001-07:00

As of today, individual and family health plans in California can only be purchased with start dates of 9/22/10 and prior. There are literally no health plans available for sale starting 9/23 or after at this time. Several carriers have already shut down online quoting for start dates of 9/23 and beyond, pending the regulatory approval of the new, PPACA compliant plans. All health plans for "new enrollment" sold 9/23 and after must meet the PPACA guidelines which include such things as no-cost preventive care, no lifetime maximums nor annual maximums and child GI coverage ages 0-18.

All of the IFP carriers have submitted new plans to the two regulatory bodies, DMHC and CA DOI for approval. Now the waiting begins until the new plans are approved for sale to the public. This could be very soon or could take a few more weeks. I will advise once plans begin to be made available.

HIPAA plans are also included in the "transformation", so anyone with a HIPAA eligibility date of 9/23 or after will need to hold tight until the plans are available for 10/1 and after.

It is my hope that the regulatory agencies work quickly to approve the new plans. If they are slow, it is possible (not probable, but possible) that there could be a period 9/23 and after with no plans available. I am especially concerned about HMO plans as the DMHC has been slow to approve new plans in California.

I suspect most carriers will choose not to re-invent plans and portfolios, but to make PPACA-compliant changes to existing plans/portfolios. Unfortunately, we will have to wait and see what will be available.

PPACA Update

2010-08-11T18:45:00.000-07:00

It appears that Anthem Blue Cross and Health Net are planning to re-tool their individual and family plans products for 9/23.

Anthem will close online quoting for any plans with a start date of 9/23 or after on Saturday (8/14). Online quoting will resume once the plans are filed and approved.

Health Net CA is currently not quoting any plans with effective date of 10/1 or after. Probably a similar change-over.

Blue Shield CA has taken a different interpretation of PPACA. The law allows carriers to make the change-over on 9/23 OR at the next subsequent product renewal cycle. Blue Shield CA has its next cycle on Jan 1, 2011 and intends to hold off on all PPACA compliant plan changes until January. My understanding is that this will include the preventive benefits AND guaranteed-issue coverage for children 0-19.

PPACA Preventive Benefits

2010-08-10T18:04:00.000-07:00

Under the PPACA (aka Obamacare), effective 9/23/10 all new health plans available on or after that date will be required to provide certain preventive benefits at no cost to the subscriber.

As noted in my earlier blog, Anthem Blue Cross CA has already begun the process of plan re-tooling and, as of today, you cannot view any plans that will be available on or afte 9/23. I expect the other CA IFP carriers to follow this lead.

Here is a link to the PPACA Preventive Benefits List.

Anthem CA Re-tooling For Obamacare

2010-08-10T08:40:00.000-07:00

Effective August 14th, quoting for individual health plans will only be available for start dates of Sept 22 or before. If you request an effective date on or after Sept 23, the system will have a pop up message stating that no plans are available for the requested effective date.

Anthem is currently working on the mandatory changes and rates for plans to be sold Sept 23 and after. Plans sold on or after Sept 23 must meet new guidelines as outlined in the PPACA legislation.

I will post when the new information is available for quoting.

PCIP Getting Closer in California

2010-08-09T10:17:00.000-07:00

The PCIP (Pre-existing Condition Insurance Plan)aka Federal Risk Pool will be opening for enrollment in a few weeks.

MRMIB has published some very basic information including a rate guide summary for the PCIP in California.

You can view the summary including the proposed rates here.

Currently you may request an application be sent to you once they are available by sending an e-mail request to PCIP@mrmib.ca.gov

As of today there is no information on plan benefit design nor which carriers will offer plans.

No COBRA Subsidy In New Bill

2010-07-23T06:02:00.000-07:00

The newly passed unemployment bill which will extend benefits until the end of November, 2010, does not contain a provision for any further COBRA subsidy. It was eliminated along with several other previously-included benefits to keep the cost down.

Anyone who qualified for the 65% subsidy prior to June 1, 2010 will receive the full 15 months of 65% subsidy. Anyone who would have qualified but began COBRA or state mini-COBRA after June 1 will not be eligible to receive any subsidy.

Bloomberg Article

Anthem Blue Cross CA Security Breach Update Pt IV

2010-06-30T19:19:00.001-07:00

Further updates regarding the security breach of Anthem's online application tracker program.

As of today, 470,000 individual subscribers have been notified of a potential compromise. 230,000 are in California, the rest across the various Anthem states.

There are some disturbing bits of information surfacing.

Apparently the breach went on for quite some time and was only discovered in March when an attorney who breached the system filed a class action lawsuit regarding the breach. I have at least two clients who were breached as far back as November, 2009.

Perhaps the most troubling is that, according to the Atlanta Journal-Constitution, a company investigation has yet to identify 10 computer addresses (IPs) that accessed information. This is of concern as this would indicate that these 10 breaches were not conducted by the attorney(s) and are IP addresses of unknown hackers.

I will update when I receive additional information. Questions for California subscribers should be addressed to Anthem individual membership at 800-333-0912.

Some current press articles on the Wellpoint/Anthem breach:

Reuters

Associated Press

CA Temporary Federal Risk Pool Approved

2010-06-29T09:07:00.001-07:00

Yesterday, two legislative bills were passed in Sacramento which will allow for California to run a temporary risk pool using federal funds (under PPACA). The risk pool will provide coverage on a temporary basis until January, 2014.

The two bills, SB 227 (Alquist) and AB 1887 (Beall) will provide both parity for mental health and substance abuse (AB 1887) as well as the temporary risk pool for uninsurable California residents (SB 227). Passage of SB 227 was predicated on prior passage of AB 1887.

California will receive $761,000,000 of federal funds for the risk pool. State sources indicate that the risk pool will not use any California state funds.

Details including qualification requirements, insurance plans (will be PPO style) and rates should be forthcoming from the MRMIB. MRMIP will run the program alongside the state major risk program.

Anthem Security Breach Update

2010-06-28T11:30:00.001-07:00

Article from the Orange County Register indicating that more than 200,000 affected so far by the security breach of the Anthem Blue Cross Online Application Tracker.

Orange County Register Article

According to the article, the attorneys who breached the system have returned all of the improperly obtained private information to a custodian of the court system. I expect that means that everyone who was affected by the breach can be assured that their private information is now safeguarded.

For clarification to the majority of my clients, this security breach does not impact HIPAA applications (nor small group). The application tracker program allows applicants (and apparently others) for individual & family plans to view a PDF of the electronic application. This PDF file contains the full application information including PHI and financial information.

HIPAA applications, like other "paper" applications, are not rendered to PDF for viewing and list on agent services as "application not submitted online -- not available for viewing". They are also not eligible for the application tracker program even though an e-mail is generated indicating it's availability.

MRMIB Moving Forward on Fed Risk Pool

2010-06-27T11:21:00.000-07:00

MRMIB (California's Major Risk Medical Board) is putting together the federal major risk pool program for California. According to the most recent document, MRMIB is targeting PPO model coverage plans allowing for provisions to match the new federal PPACA guideline (no annual or lifetime caps, lower deductibles (under $1500) and so on).

According the the MRMIB, target date for the risk pool to be operating is September, 2010.

According to information provide by Pricewaterhouse Coopers (PwC) to the MRMIB, enrollment in the new risk pool could be approximately 25,000 California residents.

For comparison, MRMIP (California's Major Risk Insurance Plan) enrolls a total enrollment of about 7,100.

The risk pool funding will be a combination of premium from subscribers and federal dollars. No state monies will be used to fund the California federal risk pool.

More information as soon as I get it. Remember, the two primary conditions a person must meet to participate in the federal risk pool are:

1. Uninsured for six months or longer and unable to obtain private, group or public health insurance

2. Must have a health condition determined by the pool as a qualifying condition (these have not been published yet)

Anthem Security Breach Update

2010-06-22T18:37:00.000-07:00

I have a couple of updates regarding the security breach of the Anthem Blue Cross "Application Tracker" system.

1. Anyone who submitted an application for a minor child/children only that was breached and has received ID theft protection for the minor(s) will, if there was information breach for the parent/guardian, also receive the protection. Anthem is currently sorting applications on minors-only to determine if any breach of the parent/guardian information also occurred. This may take a bit of time as the original determinations were made based on the applicants. Anthem will have to research applications in full to determine who else may have had PHI or private information compromised in regard to that application. You can contact member services at 800-333-0912 at Anthem Blue Cross for assistance.

2. It is important to bear in mind that, while Anthem Blue Cross has ultimate responsibility with regard to this hacker manipulation, the responsible party(s) is/are mainly attorneys who are looking to file a law suit against Anthem. Yes, the carrier is ultimately responsible for 100% security of your information, as are we agents.

3. I have never really understood the need for an "application tracker" program in the first place. Anthem has provided this "link" to track you own application online and, unfortunately, this is an unintended result. The application generates e-mail updates (which are secure) at any change of application status for any applicant who provides a valid e-mail address. Since you have to provide a valid e-mail address and select opt-in on e-mail notification to even receive the application tracker link, you will automatically receive the e-mail updates anyway. Unless you have a burning desire to view the PDF of your application, anything else will automatically be communicated by secure e-mail, thus rendering the application tracker program redundant.

This hack was not of an agent's database or agent log in access to the insurance company web site. This hack was on a program designed to let anyone who applies for individual coverage online with Anthem to track their own application. It is not necessary unless you have applied direct with the carrier since your independent agent will be monitoring progress and advising you (or should be!).

Blue Shield CA To Hold Current Rates For July 2010

2010-06-18T18:05:00.000-07:00

Blue Shield of California announced today that the company would make no rate or benefit changes to individual & family health plans in California at this time.

Blue Shield's "product cycle" normally allows adjustments of rates and plan benefit changes two times per year, in January and July.

Communication to agents indicates that everything will remain as current in terms of price and benefits until the next product cycle, which will be announced at a later date.

Anthem Blue Cross Security Breach (Individual Health)

2010-06-18T15:50:00.000-07:00

Anyone who has recently applied for individual health insurance with Anthem Blue Cross and been assigned an online application tracker link needs to be aware of the following unauthorized security breach. Affected applicants will receive notification with details and one year of free identity protection services. No agent has been or likely will be notified of specific applicants (if any) who were affected.

PHI Breach by Individual Applicant, Attorneys

Anthem Blue Cross recently learned of a situation in which a small number of individuals manipulated the web address within the website we use to allow people to track the status of their Individual insurance applications. Through this manipulation, some of these individuals gained unauthorized access to certain private information.

The vast majority of the manipulation and the resulting unauthorized access occurred at the hands of certain attorneys, who were representing an applicant. We believe that this manipulation was conducted to support a class action lawsuit against Anthem Blue Cross or its parent company - over the very breach they were committing.

The ability to manipulate the web address (URL) was available for a relatively short period of time following an upgrade to the system. After the upgrade was completed, a third party vendor validated that all security measures were in place, when in fact they were not. As soon as the situation was discovered, we made the necessary security changes to prevent it from happening again.

Anthem has worked since discovery of this matter to analyze the data in an effort to identify all individuals whose information may have been impacted and prepared to communicate directly to affected members and applicants as soon as possible.

We have received no indication that any information has been used in a way that is detrimental to the applicant; however, out of an abundance of caution, all appropriate applicants will receive a detailed notification from Anthem explaining what happened, and will be offered identity protection services for one year at no cost.

Note: This does not impact Group, Senior or State-Sponsored Business.

California MRMIP Enrollment Waiting List

2010-06-13T06:46:00.000-07:00

Recently I posted that MRMIP (California's State Major Risk Program) had eliminated the waiting list for enrollments. Apparently they have filled all of the open enrollment slots and now have a 1-month waiting list to enroll.

For information on MRMIP including plans, benefits and rates, visit my California Health Plans page.

CA SB 890 (Alquist)

2010-06-03T10:15:00.000-07:00

There is a current California Senate Bill (SB 890) which I find intriguing.

SB 890 is currently under consideration and, if implemented ahead of full reform, would drastically change the landscape of individual health insurance in California.

Essentially, the bill would require all health insurance companies to offer a "standardized" portfolio of plans which would be limited to 5 PPO plans and 5 HMO plans. Any deviation from these 5 plan designs would be illegal to sell after July 2011. These plan designs generally mirror the design concept of the plans which will be available in the exchanges by 2014.

The plans would be designated as "Gold, Silver, Bronze, Platinum and Catastrophic". They would have a proscribed benefit level and include maternity coverage. By the way, there is another bill out there right now which would require all individual health plans to include maternity benefits again. No more non-maternity plans.

The ten standardized plans (5 PPO 5 HMO) would also function similarly to Medicare Supplements in terms of both standardization and the ability to move from one plan to another. Under SB 890, a subscriber may, at each policy anniversary, move to a plan of equal or lesser coverage on a guaranteed-issue basis. This is very similar to the California "birthday rule" for Medicare Supplement plans.

Another interesting note included in the text of SB 890 is the medical loss ratio information for California's health insurance carriers. Remember, on Jan 1 2011 carriers must comply with the new healthcare reform MLR requirements of 80% for individual and small group and 85% for large group.

You can read the text of SB 890 here

California Moving Forward With Reform

2010-06-01T10:50:00.001-07:00

According to a Mercury News article today, the California Legislature is moving forward with several reform bills in the coming weeks.

The legislation, which may include as many as 20 bills, would, amongst other things, create state health insurance exchanges, do away with denials for pre-existing health conditions, extend coverage to children and uncap benefit limits on health plans.

Governor Schwarzenegger has indicated that he wants many reforms in place in California before January, 2011, including health insurance exchanges.

The two most major bills are SB 900 (Alquist) and AB 1602 (Perez). Both bills would create a California insurance exchange which would operate similar to the Massachusetts Connector program.

It appears that California intends to at least try to get systems and programs in place well ahead of the final dates set by federal reform laws.

Current Version of SB 900

Current Version of AB 1602

COBRA versus Subsidy for COBRA (18 vs 15 months)

2010-05-23T10:27:00.000-07:00

This week I have been asked about this so many times that I wanted to address some confusion concerning federal COBRA.

Federal COBRA runs a standard 18 months, not 15 months. There are cases where it can be 29 months (disability extension) or 36 months (divorce, separation, death of the employee, state extension or dependent age-off of parent's plan). Generally it runs 18 months for most people.

The subsidy for COBRA (for those who qualify) runs 15 months. It was originally set up to run 9 months but was extended.

You do not exhaust or lose COBRA at 15 months. You only lose the subsidy at 15 months. You still have 3 more months of COBRA (or more if extended) after the subsidy goes away.

You are not eligible for HIPAA at 15 months. You have to complete the 18 months.

Health Exchanges and Independent Agents

2010-05-20T07:08:00.000-07:00

I am hearing and reading so much lately from the health insurance agent community about the future of agents under healthcare reform. Specifically as relates to the health insurance exchanges set for 2014. A minority believe that independent agents will have a place in the system while a majority, it seems, are suffering from "Chicken Little Syndrome". Truthfully, no one knows yet what place independent health agents will have in the new system. I do have some thoughts.

For those who know me and my business, I write a lot of HIPAA. HIPAA is guaranteed-issue health insurance, available kind of on an exchange (pick from available carriers and plans) and has no underwriting or medical screening component. Somewhat similar to the future exchanges (if you can get information which is generally only available on web sites like mine).

One would think that with the fairly small choice of guaranteed-issue plans (perhaps 25 at most in California) and fairly similar plan designs (HMO are similar and PPO/POS are similiar in deductible and general benefits) that choosing a HIPAA plan would be easy. Honestly, for every 10 people I help enroll under HIPAA, at least 9 of them need help in determining the most appropriate carrier and plan for their needs. And that is a good thing. Getting a coverage plan is important. Getting the best fit for coverage is more important.

There are a variety of factors that come into play during proper case development. Plan design and usage limitations are one area. Plan benefits and any exclusions or limitations is another. Then there is the network of participating providers and the prescription drug formulary to consider. All of these things before we really even look at the price of the plan. These services are easily and readily provided by independent agents who can compare multiple carriers and plans. The other option would be to call each carrier and then try to put it all together yourself. One of the problems with calling a carrier is...they only know their own plan. For example:

Blue Cross of California originated a plan in California called RightPlan PPO. It was the first no deductible non-maternity individuals-only PPO in California. It was subsequently copied by several other carriers and duplicated in their respective plan portfolios. Health Net has SimpleValue PPO (copy) and Blue Shield has ActiveStart PPO (copy).

Under the current market, you could call Anthem Blue Cross about the RightPlan PPO but they are not equipped to compare it against SimpleValue or ActiveStart. Each carrier only knows their own plans. You'd end up having to call three carriers, get whatever information you think is important, put it all together and try to decide which clone plan would work best. Or you could call an independent agent (for free by the way, there is no cost to have an agent) who can run that scenario for you.

Fast forward to the health insurance exchanges. Like HIPAA, the plans will all be similar but, like HIPAA, there will be differences between each insurance company's plans (network, formulary, benefits, tiers of drug coverage and so on).

Let's assume hypothetically that six companies in California offer plans to the exchange. The plans will be denoted as Gold, Silver, Bronze and Platinum. Benefit levels will be determined by mandates in the healthcare reform law. Seems simple enough, right?

Well, what if you take six medications and one of them is not in any drug formulary for the exchange plans? Which plans have tier 3 drug coverage and which don't. Are there restrictions on tier 3 benefits? How do I search their drug formulary? Are my doctors participating with this carrier's Gold plan? How about hospitals? Do the networks differ between Gold, Silver, Bronze and Platinum? Does this plan cover me locally only or can I use it in-network when I travel? Is this an HMO Gold, PPO Gold or POS Gold? What's the difference?

Needless to say, this list could go on forever.

Another factor that I believe may come into play are deviations from basic design. With Medicare Supplement plans, there are some carriers who offer the Medicare mandated benefits but also create enhanced plans with other options above the Medicare minimum standard. Could we see this in the exchange as well? I believe it is very possible. So instead of six carriers offer six Gold plans, you might see something like this:

Carrier A - Gold
Carrier B - Gold, Gold Preferred, Gold Plus, Gold Enhanced
Carrier C - Gold, Gold Preferred
Carrier D - Gold, Gold Select
Carrier E - Gold, Gold Select
Carrier F - Gold, Gold HMO

Gold = Standard Gold design based on reform rules for plan minimum standard
Gold Select = Gold plan benefits with a select network of providers (smaller)
Gold Preferred = Gold plan health benefits plus a long-term care rider
Gold Plus = Gold plan benefits with a dental HMO plan
Gold Enhanced = Gold Plus plan design (with dental) plus additional vision and chiropractic coverage
Gold HMO = HMO plan adhering to Gold plan design rules

Under this scenario, as many as 13 Gold plans could be available (or more, or less) from the six insurance companies. It could get really confusing really quickly. And what if they do the same with Silver and Bronze? Or Platinum?

The bottom line is that a person should not have to match their medical needs to a health plan. All of my case development for HIPAA plans is directed at matching the plan to meet the medical needs, not the other way around. While no plan is always absolutely perfect, good case development should find the one plan that, given overall medical needs, is the "best" fit for each client.

I would think, given these variables, that the role of the independent agent would be extremely important in matching people's medical needs with the appropriate health plan, whether through the exchange or privately outside of the exchange.

Certainly the states, or insurance companies, or federal government could set up "call centers" staffed by non-agents who would be available to review coverage options and answer questions. Would it be less expensive? Probably not. But more to the point, there comes a time in this business when experienced, veteran independent agents really get a feel for the way certain insurance companies operate with regard to networks, formulary and benefits. I have found that EOC (Evidence of Coverage) booklets are often sorely lacking in certain areas when it comes to benefit utilization or the way a claim is "really" processed. Just because something is written in a booklet or spreadsheet or benefit summary does not mean that is exactly how it works, or in all situations.

We learn from experience. I write mostly HIPAA. Claims for HIPAA tend to be much greater and much more varied than underwritten coverage. That is the nature of guaranteed-issue coverage. I have seen situations which absolutely contradict what was written in the benefit summary, spreadsheet or EOC. I have also learned over the years many of the little nuances of the plans and insurance carriers that can be very critical when a prospective client brings their medical needs to me.

I hope that our leadership understands the value that we independent health agents provide.

On a side note:

I was a bit saddened to read an article recently in an industry publication in which President Obama told a health agent who expressed concern about her career that she was "the one who has to tell her clients about the insurance company's rate increase". While that is part of our job, I'd like to think we do a bit more than just pass on rate increase information. I certainly hope this is not how our leadership sees us and perceives our value to our clients.

I don't always have time to tell people about rate increases since the carrier will tell them anyway. I am often quite busy running drug formularies, trying to find which network doctor X is actually in and trying to help my clients get the plan that will best cover their immediate needs like chemotherapy, heart surgery, infusion therapy, transplant surgery or self-injectible life saving medication.

MRMIP Clears Backlog (No Enrollment Waiting Period)

2010-05-19T10:45:00.000-07:00

The California MRMIP (Major Risk Medical Insurance Program) has apparently received some additional funding and has cleared the backlog of applications.

As of today (5/19/10) there is no waiting list for MRMIP enrollments.

I am working on obtaining specific information regarding the federal temporary risk pool which is scheduled to open July 1. In the meantime eligible uninsurables may enroll in the MRMIP without an enrollment waiting period.

More MRMIP information here

Large Companies Contemplate Dropping Employee Health Coverage

2010-05-10T18:41:00.000-07:00

The Dallas Morning News is reporting that several very large companies "have concluded that they might be financially better off canceling their health care coverage and moving their workers to government-subsidized exchanges that will be available in four years".

At least four companies have investigated to varying degrees the impact of dropping health care coverage and pushing their workers onto the new exchanges, where they will be able to buy their own insurance.

While doing this would subject companies to fines, the size of the fines would be substantially less than the cost of providing health insurance to their workers.

The four companies identified so far are:

*AT&T
*Verizon Communications, Inc.
*Caterpillar, Inc.
*Deere and Co.

If these four are looking at this option, it is a pretty safe bet that other large employers are doing the same.

HIPAA Enrollment Change (Yet Again) - Anthem

2010-05-09T07:35:00.001-07:00

Anthem Blue Cross (CA) has made another enrollment change to the HIPAA plans.

Under the prior change, all enrollments in HIPAA were subject to approval followed by a premium notice. The notice would allow payments in two 15-day periods (1-15th, 16-31st paid or postmarked) to start on the first of the following month. Example:

*Premium paid or postmarked 1-15 June would start July 1 (30-day gap)
*Premium paid or postmarked 16-30 June would start August 1 (60-day gap)

Under the latest change, the premium payment period has changed as follows:

*Premium paid or postmarked 1-15 June would start June 1 (slightly retroactive)
*Premium paid or postmarked 16-30 June would start July 1

Also, Anthem Blue Cross CA has indicated that it will accept certain "substitute" documents in lieu of the Certificate of Creditable Coverage which is not issued until after the expiration of continuation coverage.

A Good Story (sadly not health insurance but life insurance)

2010-05-05T20:54:00.000-07:00

Every day it seems the health insurance companies are making mistakes, denying claims, rescinding coverage and all of the rest. They pay claims grudgingly (if at all) and, according to many media sources, try to get out of paying as many as they can.

I asked my doctor during a recent checkup if it was true what 'Dr. Dean' says about doctor spending 1/2 their time working on patient files. He told me "not anymore", most of his time is spent fighting with health insurance companies. Sigh!

So, I wanted to share the following true story. It is not a health insurance story, but a life insurance story. I dream of the day even one California health insurance company could tell a story like this. I doubt any of them could..........

In 1999 I attended the annual agents meeting of Northwestern Mutual Life in Milwaukee, WI. This is an annual "must" for NML agents and it is both educational and a lot of fun.

Then-CEO Jim Ericson opened the first morning session with the following story (and yes it has stuck with me 11 years now).

In early 1999 an agent's client applied for a life insurance policy for his young teenage daughter. Something for the future I guess. Well, for some reason the case got hung up in underwriting and they didn't get what they wanted with medical records and never completed the underwriting.

The client called his agent in late spring to inquire as to whether or not the life insurance policy on his daughter was ever issued. The agent checked and told his client that it had not completed underwriting and was never issued.

The client told his agent, "well, I guess it doesn't matter anyway, my daughter has passed away".

The agent took the case to NML where it ended up on the desk of Mr. Ericson. He directed his underwriting department to complete the underwriting on the young girl's application and report to him whether or not the policy would have been issued at that time (given the missing information).

Underwriting reviewed the application, received the missing information and reported to Mr. Ericson that, indeed, a policy would have been issued at that time had they received all of the information they required.

Mr. Ericson directed Northwestern Mutual Life to issue the life insurance policy posthumously on the young girl, waive premium payments, and immediately pay the benefit to the beneficiary.

Northwestern Mutual did not have to do this. They could have simply said that the policy was never issued due to missing medical information. But they didn't.

This story never made the press, was never published in any newspaper. Quietly, as their nickname "The Quiet Company" suggests, they made a decision to do the right thing, or more to the point, to do the honorable thing.

It's about honor and being honorable. That's what it really means to be an insurance company!

Blue Shield CA Adds 5th HIPAA Policy

2010-05-03T16:40:00.000-07:00

Effective May 1, 2010, Blue Shield of California has added a 5th policy to the HIPAA guaranteed-issue individual & family portfolio.

The new addition, Access+ Value HMO, is a lower-priced HMO option than the Access+ HMO that was made available 3/2/10.

This is the first time I have seen a carrier offer three plans under one plan registration for HIPAA.

MRMIP Will Not Be Used For Risk Pool

2010-04-29T21:52:00.001-07:00

Today the CA Governor announced that California will not use the MRMIP program as the temporary high risk pool for uninsurable California residents.

Instead, MRMIP will continue to operate alongside the federal risk program to be established by HHS in the next few months.

Stay tuned for more details on the temporary risk pool and how to enroll. Remember, the federal risk pool is a temporary program to 2014 to help cover those who cannot obtain private health insurance and have been without insurance coverage for six months or longer.

MRMIP is a California state risk program for CA residents who are unable to obtain private health insurance. The current waiting list for MRMIP enrollment is 3-4 months from application submission.

Anthem CA Rate Increase Withdrawn

2010-04-29T18:48:00.000-07:00

According to KGO Radio, Anthem Blue Cross CA has withdrawn the proposed 39% rate hike for California. Apparently they will be re-working the numbers for a more moderate change at some point in the future. Members will be given 30 days notice before any rate changes would go into effect.

KGO Article

Anthem Fights Back (Finally!)

2010-04-23T19:37:00.001-07:00

On Thursday, a "reporter" at Reuters wrote a story about Anthem/Wellpoint deliberately rescinding health insurance policies on women who developed breast cancer. The article, which was then rebroadcast by other media, is full of factual errors (one of the women was not even insured by Anthem/Wellpoint and another's name was mispelled throughout the article). The media "report" even caused HHS Secretary Sebelius to fire off a nasty letter to Angela Braly (CEO Wellpoint/Anthem).

After getting beaten up over the last few months and being portrayed as an evil cross between Attila The Hun and Adolf Hitler, Anthem finally is fighting back against this kind of lazy and inaccurate "journalism".

Anthem Response to Reuters Article

Anthem Response to HHS Sebelius' Letter

It gets better, folks. The url for the original story is no longer active and the "corrected" story (minus the woman who was not even a Wellpoint/Anthem insured) is available here. Here's the top quote on the "revised" article:

Corrected: WellPoint routinely targets breast cancer patients(Removes all references to Robin Beaton in first paragraph and throughout to reflect that the insurance company that canceled her policy was not a WellPoint subsidiary)

Temporary Risk Pool (California)

2010-04-23T10:29:00.000-07:00

Just a quick update on one of the provisions of healthcare reform that goes into effect in September--the temporary risk pools for the uninsurable who have 6 months or more uninsured (and are uninsurable).

Each state was given the option to use a federal risk pool (HHS) or, if that state has its own risk pool, to use the state program and receive federal $$ for it ($5 Billion earmarked for these temporary risk pools).

While I assume California will likely us the California MRMIP program for eligible California residents, a decision has still not been made by the MRMIB (Major Risk Medical Insurance Board) in Sacramento.

I called them this week for an update and was told that they are still meeting about it and working through the myriad of implications for using MRMIP.

I will provide updates as they become available and as we get closer to the initial changes under the new Healthcare Reform law.

For more information on California's MRMIP health insurance risk program (and other state programs), visit my CalHealth page.

The HIPAA Tango Continues (Anthem Blue Cross)

2010-04-23T09:58:00.000-07:00

For those who may be looking at my HIPAA page and wondering what is going on with Anthem Blue Cross enrollments, I thought this might help (I hope!).

Effective 5/1/10, Anthem has a new enrollment process for HIPAA plans. The process works like this: application and supporting documents to get approval to enroll, premium notice sent out upon Anthem's "OK" to enroll (approval), then you pay future premium to get future start date. Gaps can run 30, 60, 90 days or more. Sounds crazy, huh?

I have spent the better part of this week tee-ing off Anthem trying to get clarification and work-arounds for enrollments for Californians in need of HIPAA coverage and don't want to gap coverage.

So, to answer the question of whether or not there would be a necessary gap in coverage from group to HIPAA, a firm "maybe". It is going to depend on how early on we can start the process.

It is possible to enroll under the new system at Anthem and have a seamless start date. But it is tricky. Here's what needs to happen to make it work.

60 days prior to the expiration of continuation (or loss of group is terminating active coverage), we will need to provide some or all of the following to help get you enrolled:

1. Completed HIPAA enrollment application.
2. Copy of Termination Notice (either COBRA, Cal-COBRA or from group. This is a letter you receive about 60 days prior to exhaustion indicating that your continuation coverage will expire on a certain date.
3. Records to reflect payments of premiums for the full period including the final month (bank online statements, letter from administrator, etc.). Something to show you've made 18 or 36 months of premium payments (if continuation coverage).
4. Copy of current health insurance ID card and name of employer (usually on the card)for those not eligible for the Cal-COBRA extension to 36 months.
5. If covered 1st 18 months federal COBRA and now on Cal-COBRA extension, a copy of your group health certificate issued after federal COBRA expiration (from the COBRA Administrator or Health Plan)

The purpose of such documentation is twofold. One, we need to help you get Anthem Blue Cross to generate a premium payment "approval letter" as soon as possible within the 60 days prior to eligibility date so that you can submit your HIPAA premium and receive your desired 1st of month start date. Two, your Group Health Certificate (Certificate of Creditable Coverage/Certificate of Prior Health Coverage, it goes by several names) will normally not be provided until 10 days AFTER the expiration of the group health plan. Anthem has stated that they will accept "substitute" proof of exhaustion in lieu of the CoCC to expedite the enrollment process.

This Is What Happens When You Don't Read The Bill!

2010-03-24T18:30:00.000-07:00

I guess someone forgot to tell the administration and those who voted for health insurance reform to actually read the bill.

The current bill signed into law yesterday does not, in fact, provide guaranteed-issue health insurance coverage from children this year, sort of.

I assume this will be fixed but we will have to wait and see.

Gap in law for children's healthcare protection

Impact - MLRs (Medical Loss Ratios)

2010-03-23T08:48:00.000-07:00

I am watching President Obama sign the new health insurance (care) reform bill on CNN. I wanted to share some things I have heard recently that may eventually impact the number of carriers in California selling individual and family plans either through exchanges or privately, or both.

While carriers (insurance companies) can boast an overall MLR (medical loss ratio) above 85%, this number is generally inclusive of all sectors of insurance (large group, small group, individual and senior). However, when small group and individual (especially individual) is segregated out, the MLR often falls well below 80% with an average running about 74% on individual and family health plans.

"MLR" is the ratio of premiums paid in to what is paid out for medical care and wellness. The current reform will require in 2011 that all carriers selling individual and family plans must meet 80% MLR in that market. That means every company selling health plans in California by 2011 must be spending at least 80 cents of every dollar received in premiums on healthcare and related expenses.

I will save the reduction in administrative costs necessary for another post. Needless to say it certainly is probable that reduction in those expenses, including agent commissions, will occur.

My concern is if and how some carriers will be able to meet the new MLR.

I suspect that some carriers may choose to exit the market in California instead of trying to achieve 80% MLR on individual & family health coverage.
I will be curious to see who is left standing between now and 2014.

Health Insurance Reform Has Passed

2010-03-21T19:53:00.001-07:00

In a very close vote, HR 3590 was passed this evening 219-212.

Health Insurance Reform - What To Expect

2010-03-21T10:23:00.001-07:00

Happy Sunday to you all. I am watching the House vote and waiting for the final determination on the Health Insurance (Health Care) Reform Bill.

Since I have received many questions concerning changes I thought I'd quickly summarize here what to expect initially if/when this Bill is passed and signed into law today.

During the first year you can expect:

Pre-Existing Conditions - The Bill includes $5 billion in immediate support to provide temporary coverage to uninsured Americans with pre-existing conditions. The money would help until the new health insurance exchanges are created in 2014.

Elimination of Benefit Caps - New policies sold will not have annual caps on benefits nor lifetime caps on benefits.

Children with Pre-Existing Conditions - Children with pre-existing health conditions will not be excluded from purchasing health insurance coverage.

Preventive Care - New insurance policies will be required to offer free preventive care benefits.

Small Business Tax Credit - A tax credit for small businesses up to 50% of premiums to help small businesses purchase health insurance.

Help for Seniors - $250 towards drug coverage in the "donut hole" to help pay for prescription drugs.

Appeals Process - An independent appeals process will be set up for those who feel that they were unfairly denied a claim by their insurance company.

Other changes take place in 2014 and beyond.

Medicare You Can Buy Into Act - Grayson (D-FL)

2010-03-10T18:45:00.000-08:00

Congressman Alan Grayson of Florida has authored H.R. 4789. The Bill, titled "Medicare You Can Buy Into Act" or "Public Option Act", would open up Medicare enrollment to US residents of all ages 19 and above. The link below is for this bill, which is only four pages long.

Read The Bill Here

California HIPAA Dance (Redux)

2010-03-03T18:44:00.000-08:00

Another change for HIPAA in California.

Blue Shield of California, in response to Anthem's proposed premium payment arrangement (which is apparently not going to be fully implemented), has taken the following action with regard to HIPAA plan enrollments in California.

Effective 3/2/10, PPO enrollments from HIPAA plans will no longer offer any date of the month not before application receipt date. Now, 1st or 15th of the month following approval of the application.

From Wall Street Journal "The Wellpoint Mugging"

2010-03-01T18:21:00.001-08:00

A very interesting article from the Wall Street Journal.

The Wellpoint Mugging

Some parts of the article are quite telling.

He ought to subpoena California's political class because Wellpoint's rate hikes are the direct result of the Golden State's insurance regulations—the kind that Democrats want to impose on all 50 states. Under federal Cobra rules, the unemployed are allowed to keep their job-related health benefits for 18 to 36 months. California then goes further and bars Anthem from dropping these customers even after they have exhausted Cobra. California also caps what Anthem can charge these post-Cobra customers.

This next one hits home for me as one of the leading Anthem HIPAA producers in California. While I know that Anthem is taking losses on the guaranteed-issue side, I also am confident that my book of Anthem HIPAA business (which apparently is #2 in the state of CA right behind e-healthinsurance)is not creating losses. Yes, the whole pool is losing money and Anthem has been covering almost 80% of it for several years (same with MRMIP). However, I always strive to do proper case development before I pick the appropriate HIPAA plan for a client and find I have a fairly even spread between my three California major medical carriers. And no, Anthem has not invited me to lunch for my high HIPAA production LOL!

This explains why Anthem lost $58 million in California on its post-Cobra customers in 2009. If WellPoint didn't raise premiums amid these losses, it would soon be under assault from its shareholders, if not out of business.

The company presented its findings to California insurance commissioner Steve Poizner last November, who had a month to review the proposed increases and never objected. But recently amid the White House campaign, Mr. Poizner has joined the chorus claiming to be "skeptical" of the increases and demanding that Anthem postpone them while he conducts a review. Anthem has done so.

More HIPAA Dancing

2010-03-01T08:58:00.000-08:00

I have learned that Anthem Blue Cross California has again changed its position with regard to HIPAA enrollments.

Apparently they have backed off of the "no premium" with application design (which virtually guaranteed a 60-day minimum gap in coverage) and will allow premium submission with the application in the near future.

The current no premium program was only in effect on the HMO HIPAA plans, not the PPO HIPAA plans. Anthem had indicated a desire to have a unified HIPAA application with no premium pre-payment possible. Apparently this has been scrapped and HIPAA applicants will soon be able to pre-pay premiums for both HMO and PPO HIPAA plans with Anthem Blue Cross CA.

Part Deux: Is The California Individual & Family Health Insurance Market In Critical Condition?

2010-02-28T10:25:00.000-08:00

Having recently watched the "bi-partisan" meeting in Washington and many videos on youtube, I wonder if the problem is "un"-fixable.

Speaker Pelosi, in a recent youtube video answering questions on the meeting, pointed out two things which are absolutely of concern. 1, our health insurance system is employer-based in design and function. 2, there are many more people not covered under the employer-based system who choose to remain on the sideline than those who participate in the non-employer health insurance market.

I won't go through the numbers again since they are covered under part one of this topic below. Suffice to say, nearly two-thirds of those who should participate in the health insurance market in California for individual & family coverage do not. No employer-sponsored health plan, whether fully insured or self-funded, could operate at a participation level of 33% or less. Employer plans require 75% of all eligible employees to participate. I have worked in the past for employers who made it mandatory to buy a health plan through their fsa/cafeteria plan unless one had a valid waiver (so as not to mess up participation).

With rare exception, most every vlog I have seen, including the grilling of Anthem/Wellpoint CEO Braly in Washington, have had a nasty, negative tone. While it is without doubt that people are upset by the rate changes and popular press, there are implications to this notwithstanding the fact that my study below shows that even with the "massive" rate increase, Anthem prices below most of the other California carriers for like coverage (including 2 not-for-profits).

Now here's your "inside scoop" for the day, dear readers. I have it on good authority that a very large health insurance company in California (which shall remain anonymous), in the last six months, approached the state regulatory agency/ies to review the option of cancelling the individual & family market product and bailing out. To be clear as to what is at stake....

IN THE LAST SIX MONTHS, ONE OF THE LARGEST HEALTH INSURANCE COMPANIES IN CALIFORNIA ADDRESSED TO A STATE REGULATORY DEPARTMENT THE POSSIBILITY OF NO LONGER SELLING HEALTH INSURANCE TO INDIVIDUALS & FAMILIES IN CALIFORNIA.

The writing is on the wall across the spectrum of carriers. Sales of new plans are flat. HIPAA plans have been reformated to high deductibles and expensive HMO plans to stem the bleeding in that pool. Programs like Tonik for individuals and BeneFits for small group have experienced less-than-stellar sales.

The only two PPO programs (non-HIPAA) that are selling at all right now are SmartSense by Anthem and VitalShield by Blue Shield. Even in those cases, the sales of new plans is not keeping up with the cancellation of existing subscribers.

Anthem has launched three new product portfolios for IFP in the last six months--Core Guard, Clear Protection, and coming April 1, Premier. I will be curious to see whether or not new enrollments in these plans (lower cost) will overtake defections off of coverage as is the current trend.

Until and unless this trend shifts, the IFP market is going to be chaotic at best. Continuous premium increases will become the norm, and this in turn will drive more people off of coverage which will create a repetitive cycle.

So, Dave, you ask, what is your solution to the problem?

Well, I see two choices.

One, like Speaker Pelosi mentioned, mandate coverage and penalize those who do not participate. Increase participation to as close to 100% as possible, guarantee-issue health insurance coverage with no pre-existing conditions problems and create an incentive (tax or othewise) for people to participate in addition to a penalty.

Two, and this is one I may favor over the first one, kill off all non-employer coverage plans and go to a single payer exchange for coverage (with a mandate or incentive). The exchange could offer compliant private plans from carriers that wish to offer them and/or public plans like Medicare/FEHB or other plans designed under federal mandates. Allow carriers to sell private plans outside of the exchange to those who can qualify and wish to purchase outside of the exchange.

Make the exchange available to those who cannot obtain employer-sponsored coverage and do not wish to or cannot purchase a private plan outside of the exchange. Also, provide that any employer under 20 employees (2-19) who chooses the exchange over the group plan must pay a penalty per employee to the exchange, and any company over 20 employees must either provider group coverage or pay a payroll tax penalty per employee to the exchange.

Anthem: The Tale of the Tape in California

2010-02-14T17:28:00.000-08:00

I was curious about the impact of the now-delayed Anthem Blue Cross rate increase on premium levels. I could only think of one way to find out, so I ran quotes on myself in Gilroy for four comparative coverage plans from the four California health carriers. Kaiser and Blue Shield are not-for-profit, so they should win, right? The results may surprise you!

The rates below include the Anthem rate increase scheduled for March 1, 2010.

1500 Deductible HSA Plan (or closest match)

#1 Anthem Blue Cross Lumenos 1500 HSA...............$243.00
#2 Health Net CA 2500 HSA (closest).................$246.00
#3 Blue Shield CA 1800 HSA (closest)................$311.00
#4 Kaiser 1500 HSA..................................$349.00

3500 Deductible Traditional PPO (or closest)

#1 Health Net Value PPO 4000 (closest)..............$179.00
#2 Anthem Blue Cross 3500 PPO.......................$224.00
#3 Kaiser 3000 Plan (closest).......................$277.00
#4 Blue Shield CA Essentials 3000 (closest).........$352.00

$0 Deductible PPO/HMO RightPlan Clone with Comprehensive Rx (or closest)

#1 Anthem Blue Cross RightPlan 40 PPO...............$358.00
#2 Health Net NetFirst PPO..........................$383.00
#3 Kaiser HMO (closest match).......................$457.00
#4 Blue Shield CA Active Start 35...................$504.00

1500 Deductible HMO Plan

#1 Kaiser 30/1500...................................$365.00
#2 Anthem Blue Cross HMO (w/1500 deductible)........$654.00
#3 Health Net HMO 40................................$670.00
#4 Blue Shield CA Access+ HMO.......................$798.00

I have not included the SmartSense plans, nor the the Core Guard and Clear Protection plans offered by Anthem. However, those three portfolios all price even more favorably against the in-state competition.

Anthem Agrees To Delay Rate Increase in California

2010-02-14T12:43:00.000-08:00

On Saturday (2/13) Anthem agreed to hold off on the March 1 rate increases until May 1 at the soonest. This will give time for independent actuaries and auditors to determine if the increase in rates is appropriate.

Anthem to delay insurance rate hike amid criticism

Anthem Answers Sebelius

2010-02-11T19:13:00.000-08:00

Anthem President and CEO of Consumer Business, Brian Sassi, addressed his response to Ms. Sebelius regarding her inquiry concerning Anthem rate increases in California.

Click here to read Mr. Sassi's letter

Poizer Asks For Temporary Halt To Anthem Rate Increase

2010-02-08T21:05:00.000-08:00

California Insurance Commissioner Steve Poizner has sent a strongly-worded communication to Wellpoint/Anthem requesting that they hold off on the proposed 3/1 rate increase until 5/1 so that an independent actuary retained by the DOI can review Anthem's payout ratios.

Additionally, the Obama Administration has expressed serious concerns about such a large rate increase in California.

A link to Mr. Poizner's letter here.

Is The California Individual & Family Health Insurance Market In Critical Condition?

2010-02-06T10:02:00.000-08:00

With the recent LA Times article and notifications to approximately 800,000 CA residents by Anthem Blue Cross of California, the future of individual & family health insurance coverage is looking bleak. Anthem announced a rate increase for March 1, 2010 ranging between 30-39% on many private health plans.

I received information just yesterday that Aetna has now laid off the IFP staff support for northern California (and I supposed SoCal as well). The last time Aetna laid off people in these positions, they exited the market in California.

First a look at some "interesting" numbers and how they relate to this issue.

California population (2009) - 36,900,000 (probably 37,000,000 by now)

# California residents covered by private health plans - 2,100,000
# California residents on average uninsured - 6,000,000
# California residents covered under Group/Medicaid/Medicare - 28,800,000

Those numbers tell us a lot about what is going on. IFP (Individual & Family Plan) represents an average enrollment of 6% of the total population, and 7% of the total insured population of California. 76% of the total population is covered under an employer-sponsored health plan, Medicaid or Medicare and 93% of the total insured population is covered under an employer-sponsored health plan, Medicaid or Medicare.

Sadly, the uninsured population is nearly three times as large as those who have private health insurance.

Group plans (employer-sponsored) flourish in California. The plans are heavily mandated by benefit and also represent a true actuarial "pool" of risk. Carriers require 75% of all eligible employees to participate, thereby spreading the risk across a large and balanced company population. I have heard over the years that actuarily, group plans tend to run 20% using major benefits, 30% using some benefits and 50% using no benefits in any plan year.

While group plans will certainly experience rate increases due to health care costs, they are often minimized by mandated participation. So long as the actuaries do their job, group tends to be more stable.*

Individual plans have few if any mandates and there is no participation requirement. As such, plans react to utilization of benefits and increases in health care costs on a more radical scale than employer-sponsored group plans.

Also, plan benefit levels are continuously being adjusted to keep the utilization in check. Lower deductibles give way to higher deductibles, first-dollar benefits give way to services under deductibles first, co-insurance splits continue downward (Health Net has plans 50/50),and so on.

When I first started in health insurance in California, then Blue Cross of California (now Anthem) had a very impressive set of PPO plans. $10, $20, $30 and $40 co-pay plans with no deductible, low out-of-pockets and 80%-90% coinsurance levels. They also covered all normal benefits including maternity. The $40 co-pay plan was so inexpensive that it became a loss-leader. The plans were retired around 2000 to make room for plans with lower co-insurance levels, deductibles and higher out-of-pockets. This trend has continued since.

The bottom line is that slowly but surely IFP will become undesireable to consumers and carriers. Carriers will bleed money on accelerating health care costs and consumers will hate the plan designs. Every year the IFP carriers introduce "new" plans, all of which are stripped-down from the preceeding plan designs. Carriers will continue to retire plans that are no longer profitable (see Anthem Share PPO plans and Blue Shield Spectrum PPO plans). At the rate things are going, IFP plans in a few years will be completely catastrophic coverage with little or no preventive care, generic only drug benefits and deductibles in the 10-20,000 range. Oh, and you can pretty much forget about maternity on PPO plans in a few years, too.

HMOs will continue to offer richer and stronger benefits (with access restrictions), however, they will eventually price so high as to be unaffordable for many consumers.

* the exception was the major rate increase in the Lumenos HSA plans a couple of years ago for group. This was due to an actuarial error in terms of anticipated benefit utilization. Lumenos group HSA plans offer free no-cost preventive medicine. The utilization by the traditional 50% who normally don't use benefits in a plan year as almost 100% which totally blew the curve. Rates were increase between 25-39% at the first Lumenos plan anniversary to compensate.

Cal-COBRA under ARRA

2010-02-05T12:11:00.000-08:00

I have just received information from multiple sources that the ARRA extension through 2/28 for subsidy to 15 months does now apply to Cal-COBRA as well as federal COBRA.

The California HIPAA Dance

2010-01-26T11:06:00.000-08:00

For those who have been following the near-hourly updates on my HIPAA insurance page, the one word I would use to describe the recent activity is--CHAOS.

Anthem Blue Cross initiated what has essentially become a "you-know-what contest" between the two Blues concerning their respective HIPAA portfolios.

The chronology is as follows:

Fall, 2009 - Anthem retires the Share PPO portfolio (retired plans do not need to be offered in the HIPAA mirror of plans)

Jan 11,2010 - Anthem Blue Cross announces a complete HIPAA portfolio overhaul, replacing the 1500 and 2500 Share plans with HMO plan. DOI-registered PPO plans remain the same (5000 and Basic 1000)

Jan 15, 2010 - Anthem closes new enrollments on the 1500/2500 at end of business day

Jan 18, 2010 - Blue Shield CA advises an impending change to the HIPAA products, but cannot comment until 1/22

Jan 22, 2010 - In response to the Anthem HIPAA portfolio change, Blue Shield closes the Spectrum PPO portfolio and eliminates the Spectrum PPO 1500 and 2000 from the HIPAA portfolio. New plans will be available effective Mar 2, 2010 and include an HMO plan, 5500 PPO, 5000 PPO and 4000 HSA-compatible PPO

Jan 25, 2010 - Anthem indicates that a new enrollment requirement applied to the HMO plans will go into effect on Feb 8 in regard to the PPO plans as well (DOI plans). This new requirement will, in effect, guarantee that all Anthem Blue Cross HIPAA enrollees will experience a minimum 30- to 60-day gap in coverage between expiration of group (COBRA/Cal-COBRA) and enrollment in the HIPAA plan.

Please stay tuned to my blog and HIPAA page for further updates as information becomes available.