California Health Insurance Blog - by David Fluker

California Healthy Families Back In Business

2009-12-08T18:44:00.000-08:00

In the summer I blogged about the closing of new enrollments in the Healthy Families program for children (SCHIP). Recently the program received additional funding and has re-opened to new enrollments. This is very good news for thousands of California families who need this low-cost health insurance coverage for their children. For current information on the California Healthy Families program, follow the link below.

California Healthy Families (SCHIP)

Closer on Healthcare Reform

2009-12-08T18:41:00.001-08:00

It looks like we are getting very close to a final version of the Senate reform bill. Broad agreement has been reached on the Senate version, which is very close to the already-passed House version.

CNN Story Dec 8th

Politicians Are Out Of Touch

2009-08-04T11:27:00.001-07:00

Business as usual I guess.

In the Boston Globe (8/4), columnist Derrick Z. Jackson notes House Speaker Nancy Pelosi's (D-CA) comments on the insurance industry last week, during which she called them "the villains in" the healthcare reform debate "with their 'exorbitant profits.' She charged, 'they have been immoral all along how they have treated the people that they insure."

Great sound bite and certainly it will get some people's blood boiling. But let's look at some truth here.

In Ms. Pelosi's home state of California, there are currently seven health insurance carriers selling individual & family plans to the public state-wide. They are:

Anthem Blue Cross (formerly Blue Cross of California)
Blue Shield of California
Health Net of California
Aetna
Kaiser Permanente
Assurant Health
PacifiCare (UHC)

Of those seven carriers, four are not California-based carriers (Aetna, Anthem BC, Assurant and PacifiCare/UHC (now owned by UHC))

That leaves 3 domestic health insurance companies in the state of California (Blue Shield, Kaiser and Health Net).

Of those 3 carriers, 2 are NOT FOR PROFIT carriers--Kaiser and Blue Shield CA. So, it looks like in Nancy Pelosi's home state, 2/3 of the domestic health insurance carriers (and 1/3 of all carriers) are no allowed to operate and take "exorbitant profits".

When 2/3 of domestic health insurance carriers in a state are operating without profit motive, I fail to see how they can be labeled as "villains" who are taking "exorbitant profits".

Health Net Sells Northeast Operations

2009-07-23T12:13:00.000-07:00

Health Net Inc. has announced that its northeast operations will become part of United Health (UHC) upon regulatory approval. Health Net has stated that they intend to focus exclusively on their western US operations.

Healthy Families Imposes Waiting List

2009-07-22T10:06:00.000-07:00

The California SCHIP program, Healthy Families, has now officially added a waiting list for new enrollments going forward into the new fiscal year. Shortfall for the program is $90M in the general fund with a total underfunding of $270M for the childrens health insurance program.

http://www.mrmib.ca.gov/MRMIB/HFP_Wait_List_Effective_7-17-09.pdf

AB 98 Update

2009-05-20T18:52:00.000-07:00

Looks like AB 98, the mandatory maternity bill, is being shelved for the remainder of the year. I will be curious to see if it is resurrected in the future.

AB 23 Signed Into Law

2009-05-14T16:35:00.000-07:00

California Assembly Bill 23 was signed into law today by Governor Arnold Schwarzenegger.

AB 23 legalizes the continuation subsidy for Cal-COBRA beneficiaries, which is intended to mirror the federal COBRA subsidy.

According to my information, this subsidy is to be provided directly by the health insurance carriers and only the carriers are allowed to take the tax credit to offset the subsidy.

I will blog with more details in the next few days. AB 23 was created and signed into law because the state mini-COBRA law needed a correction to approve the subsidy.

California AB 98 & Individual/Family Health Plans

2009-05-07T11:00:00.001-07:00

Happy Thursday! One more day to go then the weekend.

The California legislature is currently working on a new bill, AB 98, which, if passed and signed into law, will make a significant change to California individual health coverage.

The bill would require all individual & family health insurance plans in California, whether registered with the DMHC or the DOI, to contain mandatory maternity benefits. As I interpret the bill, any plan sold in 2010 would have to contain maternity benefits, and any plan sold prior to 2010 would be adjusted to include maternity at plan renewal.

Many Californians currently covered on individual & family plans have chosen plans without maternity benefits to save premium. Maternity benefits on a health plan are assumed at 100% utilization, meaning that all plans with maternity benefits are priced with the expectation that every subscriber will use the benefit. Those who do not need maternity coverage would lose the choice of purchasing a non-maternity health plan and the premium savings that go along with it.

I will update as this bill moves through the Assembly.

Mini-COBRA Expansion States

2009-05-05T18:32:00.000-07:00

Hope everyone is having a great spring. Just wanted to update on the increase in mini-COBRA state continuation coverage programs going on currently.

Last month Viriginia added a state mini-COBRA program which went into effect in early April, 2009. I found out today that Pennsylvania is also finishing legislation to add a mini-COBRA program. Virginia's program runs 9 months to coincide with the subsidy. I expect Pennsylvania to go 9 or 18 months, again with the first 9 being subject to the subsidy.

For those who are not aware, a part of the ARRA legislation requires state mini-COBRA programs to provide the same 65% subsidy to qualified beneficiaries as the federal COBRA program.

In California, we have a program called "Cal-COBRA" which is the state mini-COBRA program with a special feature not found in other states.

Cal-COBRA applies to groups 2-19 employees which fall below the federal COBRA size. Additionally, Cal-COBRA contains an extension of coverage provision under AB 1401 which can apply to groups of any size, not just 2-19. This was signed into law by Gray Davis when he was still the governor. Under AB 1401, certain groups above 20 are eligible for an extra 18 months on Cal-COBRA after the first 18 months of federal COBRA. Generally, the groups must be fully insured (not self-insured/self-funded) and must be covered by a carrier domiciled in California. Plans outside of California, like self-funded plans, are exempt.

For more information on Cal-COBRA extension and AB 1401, visit this page on my site.

For more information on Cal-COBRA and California mini-COBRA, visit this page on my site.

Before I forget, Happy Cinco de Mayo!

COBRA Subsidy (and Cal-COBRA)

2009-04-07T09:50:00.000-07:00

The new COBRA subsidy is getting an enormous amount of press. In brief, individuals & families who qualify for the subsidy (must be involuntarily terminated from employment between September 2008 and December 2009 and meet an income guideline) are eligible to receive 65% of the COBRA premium as a subsidy from the former employer for the first 9 months.

In addition, the same rules will apply to California state mini-COBRA (Cal-COBRA) program as well. The final answer to exactly who will provide this subsidy is still being worked out. It appears most likely that the subsidy will be paid by the health insurance carrier, itself, and not the employer.

In general, state mini-COBRA programs are intended to some degree to replicate federal COBRA for groups which do not fall under the federal COBRA size requirement (20+ full-time employees (part-time to count fractionally) for at least 1/2 of the previous calendar year). In California, Cal-COBRA is the state program of continuation for groups between 2 and 19 employees.

HIPAA Versus Underwritten: Premium Issue

2008-12-19T08:02:00.001-08:00

Hope everyone had a good Thanksgiving and we are now heading into the Christmas season.

I ran across something interesting a few weeks ago and I wanted to share it with you. It forms the basis for the order in which I help people enroll in individual & family coverage in California.

As I mentioned in an earlier blog post, CA PPO plans are able to be rated up from the standard premium in increments determined by each carrier. Some carriers offer more tiers, meaning more chances to get coverage approved.

Anthem Blue Cross (CA) Level 1 (standard), +20%, +25%, +50%, +75%, +100% (6 tiers)
Blue Shield CA Tiers 1-5 (1 being 80% of standard cost which is not always realistic) (5 tiers)
Health Net CA standard, +25%, +50% (3 tiers)
Aetna A (standard), B and C (3 tiers)

As you can see, Anthem offers the best range with 6 full tiers, Blue Shield next with 5 (as stated, Tier 1 is less than likely in the majority of cases), and Health Net and Aetna have less at 3 tiers before decline.

With all of that out of the way, here is something to consider for those who are HIPAA-eligible:
There are cases where a rated premium on an underwritten plan can exceed the premium of the duplicate HIPAA plan. If you are approved say Level 1 + 50%, that premium may in fact be higher than the HIPAA PPO.

Now it gets sticky. Since you are enrolled in an underwritten plan, you have lost HIPAA eligibility (perhaps). There is a way around this if you are working with a good, head's up agent. During the 10-day free look period, you can cancel as never effective and retain HIPAA eligibility. It is a very short little window there.

The advantage of working with an agent (besides not costing you anything) is that we can see how the policy was rated before they even mail anything out to you. You won't know how you were approved until you receive the information in the mail if you bought direct.

Since this situation can and does happen, I prefer to enroll in HIPAA first then follow up immediately with an underwritten application. That way the HIPAA coverage is secured and we can try to get you a better offer through underwriting and make the switch.

Underwriting Tip (Individual & Family California)

2008-10-16T15:30:00.000-07:00

I wanted to address an issue with regard to underwriting for individual and family health insurance plans in California. A little tip to help you determine what plan rates to target and whether or not you would be considered for coverage.

Ignoring for a moment any health conditions that are ongoing (these are dealt with separately), we need to talk about your Rx and how it affects underwriting.

Here is a simple formula for you:

Take you monthly retail brand Rx costs and multiply them by four.

This is the minimum premium amount that you would need to target before a carrier would even consider underwriting your case.

So, let's say you have the following brand drug costs per month (you can go to drugstore dot com and get average retail pricing):

1 brand drug at $131.00
1 brand drug at $97.00
Total brand = $227.00
Minimum target premium = $908.00 (4x brand drug cost)

That means that the approximate minimum premium rate that a carrier might consider to underwrite would be over $900 per month. If you choose a $120 per month plan, since the maximum rate increase on PPO plans (there is no rate up on California HMO plans) is 2x standard premium, you would be declined for coverage right off of the application since the max rate for that plan would be $240.00 at the top rate-up.

If you can't find any PPO plan in the carrier's options that costs at least 1/2 of $908 ($454), then there is no point in even applying for coverage.

Remember this is a tip regarding Rx usage. And be aware that carriers check through services like Intelliscripts to verify every fill you've had for any Rx over the last few years. If there are further health conditions beyond the Rx, even if you can find a plan that meets this basic rule, you might (and probably will) still be declined for coverage.

Underwriting and Declines (Individual & Family)

2008-10-15T18:46:00.001-07:00

I wanted to talk a bit about something that has come up quite a bit recently concerning declined coverage and health insurance underwriting in California.

I always maintian that, with the exception of MRMIP enrollments which require a decline, generating a decline unnecessarily is never a good idea. Many people have called me in the last few months who have been advised by another agent to submit an application for health insurance even though the health history appears to be problematic. This is never a good idea and is, truthfully, not necessary to determine within a reasonable degree the outcome of the underwriting.

We, as agents, are able to call into the carrier's underwriting departments and, anonymously request and underwriting "review" for any prospective applicant. In most cases, given a reasonably accurate history, that underwriter can tell us whether or not the application would be declined for coverage. Also, agents have an underwriting guideline for each carrier they represent and often the answer can be found there without the need to even call an underwriter. No need to expose you to a decline that will be on your record for 10 years.

Now, some will say "yes, but each carrier does its own underwriting without regard to another carrier's decision" and this is absolutely true. However, if a person is declined for coverage, for the next 5-10 years, depending on the question in an application, that person MUST indicate that he/she was declined for coverage. This will be an instant red flag to the new underwriter who will likely take a very thorough approach to the applicant. This question will appear on both individual and employer-sponsored group applications. It's a stigma that should be avoided whenever possible. Kind of like a ding on your credit rating.

Let your agent do the work up front, look at all of your options, and make your decision based on the most accurate probability, not just flinging an application into underwriting and hoping for the best.

Welcome!

2008-10-15T18:40:00.000-07:00

I would like to welcome you to my California Health Insurance weblog. Unlike other insurance blogs, which are sales-oriented, the intention of this blog is to provide the reader with pertinent and important information about health plans, benefit provisions, peculiarities, underwriting, and many other topics not frequently disclosed to the public.

If you visit my web site (www.davefluker.com), you will find that I am a non-traditionalist as an independent agent. I work primarily with individuals, families, seniors and very small businesses (mostly spousal) who have difficulty in obtaining quality health insurance and may be unaware of programs available or protections under the California law.

I hope that you will find this weblog and my web site of value and I welcome feedback and comments.

Dave