How are health insurers going to keep employer insurance premiums increases lower? One way that we are already seeing is by limiting network access. Health insurers negotiate terms directly with providers such as hospital systems, physicians and other health providers. Each contract has different levels of discounts and terms.
The costliest plan can only be as inexpensive as the most expensive provider contracted with. For example, in the Sacramento area, with 4 major health systems (one staff model HMO plan and 3 fee-for-service), insurance plans with all 3 fee-for-service networks included are the most costly for a given level of copay, deductible and maximum out of pocket (MOOP).
As network access is reduced to 2 or even 1 provider network that is accessible, premium costs start to decrease. One local HMO offers two networks and is very price competitive. The staff model HMO (self-contained provider and insurer) and is also very cost effective.
Carriers that had been offering all 3 of the major networks are now realizing that to be cost competitive they must reduce premiums and one approach is to reduce the number of networks offered. Premiums are not quite yet approaching the limited access HMO plans, but hopefully will.
The implication for employers is that they must decide between network access for their employees vs premium. Many employers don't want to inconvenience their employees forcing them to change doctors or other providers, but as employers continue to feel premium price pressure, they will have to make these difficult choices.
Wednesday, February 16, 2011
Monday, February 14, 2011
Health Reform's Evolution
Don't believe everything you hear. Various pundits will have you believe that the law is all but dead and that the Supreme Court is ready to throw the whole thing out. While that is one possibility, one must open themselves up to the many other possibilities that may ultimately occur:
1. People begin to like the law and how it helps them. How about the person who's child is not in college but needs insurance but couldn't qualify for an individual plan? The law has already worked for them.
2. People who will have access to insurance in 2014 simply don't buy it until they need it, happily paying the penalty instead.
3. Companies drop coverage because it's too much of a hassle to administer and pay penalties instead.
4. Companies use health insurance to snare the best talent with better benefits vs. those that don't offer them.
5. Congress cuts funding for key organization expansions necessary to administer and implement the law.
It would be easy to go on for days in this vein trying to run by the hundreds of scenarios that might unfold. It all might work, might not work or fester for many years to come. The law is the law for now, so learn as much as you can to help you make good decisions for yourself, your family and your company.
Stay tuned!
1. People begin to like the law and how it helps them. How about the person who's child is not in college but needs insurance but couldn't qualify for an individual plan? The law has already worked for them.
2. People who will have access to insurance in 2014 simply don't buy it until they need it, happily paying the penalty instead.
3. Companies drop coverage because it's too much of a hassle to administer and pay penalties instead.
4. Companies use health insurance to snare the best talent with better benefits vs. those that don't offer them.
5. Congress cuts funding for key organization expansions necessary to administer and implement the law.
It would be easy to go on for days in this vein trying to run by the hundreds of scenarios that might unfold. It all might work, might not work or fester for many years to come. The law is the law for now, so learn as much as you can to help you make good decisions for yourself, your family and your company.
Stay tuned!
Thursday, February 10, 2011
Health Insurance for Uninsured California Children
Please review this important information regarding new health care options for uninsured children. The open enrollment period for the new health care options for children who are uninsured ends on March 1, 2011. If individuals wait and apply for coverage after March 1st, they could face much higher premium costs since there are no limits on premiums outside the open enrollment period. Thank you.
http://www.insurance.ca.gov/0100-consumers/0020-health-related/CAOpenEnrollment.cfm
http://www.insurance.ca.gov/0100-consumers/0020-health-related/CAOpenEnrollment.cfm
Tuesday, February 8, 2011
The D Word
What word strikes fear in the hearts of people and simultaneously makes their eyes glaze?
Deductible.
I recently challenged myself to do an open enrollment meeting with a client and their employees and NOT mention the "D" word. I succeeded. Barely.
It's all so simple. Deductible means YOU PAY FIRST. You pay first, then the insurance company begins to share the burden with you.
Some plans have low ($250-$500) "you pay firsts" and some plans have high ($1000-$3000) "you pay firsts".
The less you pay first, the more insurance costs. The more you pay first, the less insurance costs.
Why? Because when you pay more first, it takes longer for the insurance company to start sharing with you.
Stop reading here if you don't want your eyes to glaze. But there is more technical knowledge for you to consider in deductible parlance.
1. Family deductibles can be aggregate or embedded. Aggregate means that one person must meet the full family level "you pay first" before insurance shares the cost with you. Embedded means that one person must only meet the single level "you pay first" before the insurance shares the cost with you.
2. You pay firsts are accrued on a CALENDAR year for most health plans. This applies even if your open enrollment date is 5/1.
3. In some cases, the deductible applies to your annual out-of pocket maximum (MOOP), and sometimes it doesn't. Make sure you consult your health plan summaries.
Deductible.
I recently challenged myself to do an open enrollment meeting with a client and their employees and NOT mention the "D" word. I succeeded. Barely.
It's all so simple. Deductible means YOU PAY FIRST. You pay first, then the insurance company begins to share the burden with you.
Some plans have low ($250-$500) "you pay firsts" and some plans have high ($1000-$3000) "you pay firsts".
The less you pay first, the more insurance costs. The more you pay first, the less insurance costs.
Why? Because when you pay more first, it takes longer for the insurance company to start sharing with you.
Stop reading here if you don't want your eyes to glaze. But there is more technical knowledge for you to consider in deductible parlance.
1. Family deductibles can be aggregate or embedded. Aggregate means that one person must meet the full family level "you pay first" before insurance shares the cost with you. Embedded means that one person must only meet the single level "you pay first" before the insurance shares the cost with you.
2. You pay firsts are accrued on a CALENDAR year for most health plans. This applies even if your open enrollment date is 5/1.
3. In some cases, the deductible applies to your annual out-of pocket maximum (MOOP), and sometimes it doesn't. Make sure you consult your health plan summaries.
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