Two Minute Drill

IRS Changes 2018 HSA Family Contribution Limit

On March 5, 2018 the IRS announced in it’s IRS HSA Bulletin that the 2018 contribution limit for Health Savings Accounts (HSA) linked to family coverage is now $6,850 from the previously announced $6,900.  For more information regarding these changes please see the attached IRS HSA Bulletin or linked SHRM article

 

 

Warren Buffett on the Amazon/Berkshire/Chase health venture — “Don’t Expect Any Miracles Out Of Us”

A month and change has now passed since the great splash of January’s big Amazon/Berkshire/Chase health venture announcement. It certainly was successful in disrupting the news cycle. The initially sky-high healthcare “Richter Scale” readings are returning to normal. And, it’s pretty safe to say that any substantive changes, major disruption, and any new normal that may be triggered by this venture on big healthcare (20% of the economy), other employers – big, small and in between, and everybody else are not on the immediate horizon.

Like the CVS/Aetna venture announced last December, real change is likely to be More Tortoise Than Hare.

A sampling of Warren Buffett’s comments in some of his recent interviews with Bloomberg, CNBC, and KHN may provide you with a little more insight and a glimpse of some of his expectations.

Here are a few sound bytes from recent Buffett interviews:

He said that the goal of the business is “better care, lower costs,”and, that it will take time.”

This is not easy. If it was easy, it would have been done.”

It would be very easy I think to go in and shave off 3 or 4 percent just by negotiating power. We’re looking for something much bigger than that.”

He spoke of health-care spending taking up an increasing proportion of the U.S. economy, and a indicated that the goal of the venture is to “at least” halt that ascendant trend.

Buffett also stated that he hopes “we could find a way where perhaps better care could be delivered even at somewhat lesser cost.”

To read more go to Bloomberg: Buffett-Dimon Health Venture To Go Beyond Just Squeezing The Middlemen 

Could 2018 End Up Being a Year of Improved Health Insurance Market Stability? Here are Five Reasons It Could Be the Case.

With healthcare seemingly out of the political crosshairs for the moment and any tectonic shifts emanating from a new Amazon/Berkshire Hathaway/J.P. Morgan Chase superpower health entity a ways down the road, employers may get to experience some at least temporary market stability in the way of more choices, more consistent rates, less volatile renewals, and more opportunities to innovate (e.g. SharedFunding).

Employers have grounds for hope, at least for the next year or so.

Here are five (5) reasons that may lead to at least some temporary stability and have positive impact on cost and selection in the group market:

  1. The total number of people insured is holding steady or possibly even increasing despite the repeal of the individual mandate.
  2. Interest and energy in employer sponsored plans is up. More employers are offering health coverage. Many are also trying to improve their health coverage in order to compete for and retain talent in a more robust job market and a stronger economy.
  3. Much of the market activity for both insurance carriers and healthcare providers is geared toward gaining scale while building a better mousetrap (eg. Aetna/CVS, Unitedhealthcare and other carriers acquiring providers, etc). Strategic M&A activity is expected to continue.
  4. More states are experimenting by exercising the state waiver option (more info here and here). While tinkering with the individual market and Medicaid will get most of the headlines, more control on the state level should spawn more innovation and new options in the group market especially for small and mid-size employers.
  5. Health systems are now focused on vertical integration and improving their overall value proposition. They’re jockeying for market position and attempting to win over patients and payors alike.

 

 

Health Coverage By the Numbers (vol 2): The Cost of Coverage and Employer Contributions

Job-based health insurance is still far and away the largest single source of health care coverage in the U.S. As we continue to work on behalf of clients to drive new and better ways to stem the tide of health care costs, here are some key stats from 2017 to ponder:

1.)  Average annual premium nationally for single coverage — .$6,690 (or $557 per month)

2.)  Average annual premium nationally for family coverage — .$18,764 (or $1,564 per month)

3.)  Generally speaking, most employers cover at least 50% of the employee’s cost of premium. Nationally, employers cover on average 81% of the cost of single (employee only) premium.

4.)  Not all employers contribute to family coverage. Employers that do contribute to family coverage, cover on average 69% of the cost to cover dependents.

Source: Kaiser Family Foundation

Health Coverage By the Numbers

Job-based health insurance is the largest single source of health care coverage in the U.S.

1.) Employer-sponsored insurance covers more than 157  million workers and their dependents.

2.) The next largest source of coverage, Medicaid, insures less than half as many, 63 million.

3.) Medicare enrolls 45 million;

4.) Individual market (on/off Marketplace) provides coverage for about 21 million.

Source: Kaiser Family Foundation (KFF.org)

 

In Acquiring Aetna, CVS Health is Aspiring to Become “the Trusted Front Door to Health Care”. What’s the Impact on Current Aetna Customers?

In a letter to the broker community Aetna CEO Mark Bertolini provided a glimpse of where the combined CVS/Aetna entity hopes to head once everything is completed. If approved, the blockbuster transaction is expected to close late in 2018.

Here’s what Bertolini had to say:

“CVS Health and Aetna are joining to become the trusted front door to health care. Nearly 70 percent of the U.S. population lives within three miles of a CVS Health retail store and nearly five million Americans visit CVS Health every day. We will use CVS Health’s 9,700 retail locations to establish entirely new community health hubs dedicated to improving consumer wellbeing and answering questions about health, prescription drugs and health care benefits.

Our company will deliver care by utilizing CVS Health’s network of 1,100 in-store clinics, which are significantly less expensive than traditional health care delivery settings. Further integration of our pharmacy operations will help offset some of the projected increases in prescription drug prices, resulting in cost savings for employers and consumers.”

How Does This Week’s Announcement Impact Our Employer Clients Currently on Aetna Plans? And, Should You Be Concerned?

If you have an Aetna plan in place now or are considering switching to an Aetna plan in 2018 there’s no cause for any immediate concern.

According to Bertolini the pending transaction would have no immediate effect on the Aetna products already in place or any Aetna products offered in the market in 2018.

Or, as the title of a recent Wall Street Journal article analyzing the effects of the acquisition proclaimed CVS-Aetna Is More Tortoise Than Hare.

Health Savings Accounts: The Metrics You Need To Know For 2018

In case you missed the IRS announcement in May, here’s a snapshot of the key inflation-adjusted limits for next year as we roll toward 2018.

Health Savings Accounts (and the IRS compliant health plans that must be paired with HSA’s) are subject to annual dollar limits that are periodically updated for inflation.

 

BBG Snapshot: HSA’s By-The-Numbers 2018

Pharmacy Coupons and Insurance Companies Making Adjustments

This is an example of one Ohio company adjusting how they administer coupons people use at the pharmacyThe program helps make sure members’ out-of-pocket cost for prescription drugs are properly applied to deductibles and maximum out-of-pocket amounts.

The benefit of the coupon is easy to grasp.  Someone on an expensive brand medication can obtain it at low or no cost.

The problem can be that the carrier processes it as a paid claim and the member never pays what the plan requires.  There are reasons both employers and carriers want real out of pocket to be met by the member.

The carriers now are adjusting and working on ensuring that the member is not given credit or given a reimbursement for something they never paid for personally.  Members can use the coupons, but the carrier will credit only what the member actually paid.

This seems like a reasonable solution.  It will likely become a normal way coupons are processed.

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