General Insurance Issues

Three Notable Employer Health Coverage Factoids In The News This Week……

…… that may be of interest only to me.

Amazon, Berkshire Hathaway and JPMorgan Chase Finally Has a Name

It only took eight months. The new nonprofit healthcare company founded by Amazon, Berkshire Hathaway and JPMorgan Chase finally has a name. It will officially be known as “Haven”. (Maybe it’s just me, but with all the introductory splash and all the money being thrown at this thing, but ”Haven”? Conjures up visions more of a retirement home or maybe an RV resort somewhere just of I-95 rather than healthcare innovator.)

Not much is known about Haven. Data, technology, improving employer healthcare, and not-for-profit is about all we know at this point and that’s according to Haven head guy Atul Gawande.

Two unrelated but interesting things to note about Haven:

  1. The nation’s largest health insurer, UnitedHealthCare, views Haven as a competitor. And,
  2. It wasn’t that long ago (last summer) that billionaire leader of Berkshire Hathaway and Haven co-founder, Warren Buffett, indicated that a single payor healthcare system may be the most effective system for cutting healthcare costs.

Not sure what to make of it or how it will ultimately affect the group health market but it’s still interesting.

Is Health Market Fragmentation the Culprit? The Main Driver of High Costs?

Following up on Buffett’s take, I read this week that the fragmented nature of the U.S. healthcare system (from employer-sponsored group coverage to the individual market to Medicare, and Medicaid, and the V.A., and coverage for Native Americans – is primarily responsible for today’s high cost of healthcare coverage? Could that be an over simplification? How would simply merging those lead to lower costs?

We’ll leave that for others to figure out.

In the meantime, we’ll just keep working hard on finding new and meaningful ways to mitigate the high cost of coverage for our employer groups and their employees.

Buying and Selling Health Insurance Across State Lines

The Interstate sale of health insurance is back in the news this week with the government’s release of a fifteen-page document requesting commentary. Some see this as surefire way to increase competition and ultimately lower the high cost of health coverage. Others see it as simply adding more chaos without much gain. My sense is maybe both. Some short term gain as well as adding to the chaos. Overall, seems like at best it may temporarily treat a symptom but doesn’t won’t move the needle much toward a cure.

We’ll see if it gets traction.

If it does get traction it will be interesting to track the unintended consequences as, sure as shootin’, there will be some.

65Plus Is The Hottest Labor Market Demographic. Here Are Key 2019 Medicare Costs That Employees And Employers Should Know.

Some say it’s the hottest demographic in the labor market — men and women ditching traditional retirement age to work into their 70s, 80s and sometimes beyond.   According to the Bureau of Labor Statistics the 65 and over crowd will make up the fastest-growing segment of the workforce over the next decade.  With that in mind, over the next few months we’ll be providing key bits of information that employers and employees may find helpful as they navigate the best and most cost effective options for health coverage for the 65Plus workforce and their dependents.

First off, 2019 cost considerations for “traditional Medicare”:

2019 Medicare Costs + Coverage

PART A PREMIUM (Hospital Insurance)
Most people don’t pay a monthly premium for Part A (paid Medicare taxes for more than 39 quarters.  If 39 or fewer quarters worked they’ll pay a premium of up to $437).

PART A DEDUCTIBLE + COINSURANCE
– $1,364 deductible for each benefit period
– Days 1-60: $0 coinsurance for each benefit period
– Days 61-90: $341 coinsurance per day for each benefit period
– Days 91 and beyond: $682 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
– Beyond lifetime reserve days: all costs

PART B PREMIUM (Medical Insurance)
The standard Part B amount is $135.50 (or higher depending on your income).

PART B DEDUCTIBLE + COINSURANCE
– $185 deductible per year
– After deductible is met, enrollees typically pay 20% of the Medicare-approved amount for most doctor services, outpatient therapy, and durable medical equipment (DME).

2019 PART B + PART D (Prescription drug coverage) INCOME-RELATED MONTHLY ADJUSTMENT AMOUNT (*IRMAA PREMIUMS)
An additional amount that some individuals whose modified adjusted gross income (MAGI) is above certain thresholds will pay for their monthly Part B and Part D premiums.

  • 2019 Medicare Part B (Medical Insurance) Income Related Adjustments
FILE INDIVIDUAL TAX RETURN FILE JOINT TAX RETURN FILE MARRIED + SEPARATE TAX RETURN MONTHLY PREMIUM IN 2019
$85,000 or less $170,000 or less $85,000 or less $135.50
above $85,000 up to $107,000 above $170,000 up to $214,000 Not applicable $189.60
above $107,000 up to $133,500 above $214,000 up to $267,000 Not applicable $270.90
above $133,500 up to $160,000 above $267,000 up to $320,000 Not applicable $352.20
above $160,000 and less than $500,000 above $320,00 and less than $750,000 above $85,000 and less than $415,000 $433.40
$500,000 or above $750,000 and above $415,000 and above $460.50
  • 2019 Medicare Part D (Prescription drug coverage) Income Related Adjustments
FILE INDIVIDUAL TAX RETURN FILE JOINT TAX RETURN FILE MARRIED + SEPARATE TAX RETURN MONTHLY PREMIUM IN 2019
$85,000 or less $170,000 or less $85,000 or less your plan premium
above $85,000 up to $107,000 above $170,000 up to $214,000 Not applicable $12.40 + your plan premium
above $107,000 up to $133,500 above $214,000 up to $267,000 Not applicable $31.90 + your plan premium
above $133,500 up to $160,000 above $267,000 up to $320,000 Not applicable $61.40 + your plan premium
above $160,000 and less than $500,000 above $320,00 and less than $750,000 above $85,000 and less than $415,000 $70.90 + your plan premium
$500,000 or above $750,000 and above $415,000 and above $77.40 + your plan premium

 

Next Up:  The eligible employee’s three main options when it comes to their employer-sponsored plan and/or Medicare coverage.

 

2019 Medicare_and_You_2019

 

$19,616.00. Yes, You Read It Correctly — $19,616.00.

$19,616 — that’s the average cost nationwide of an employer-provided family health plan in 2018 according to recent employer study conducted by the nonprofit Kaiser Family Foundation and reported in today’s Wall Street Journal.  It’s pretty staggering to think about the fact that $19,616 is only the average and that there are more than a few folks across the country paying a lot more than the average.

The dirty little secret that’s fast becoming less of a secret is that hospitals charge health plans anywhere from 2 to 5 times more for hospital services than they charge Medicare.

Health Insurance Multiple Choice Question

Per the WSJ article,  a “major driver of employer premium growth over the years has been the prices that insurers and employers pay for health care”.

For several years now, and possibly even more so today, the increasing prices for hospital-related services and hospital stays have been the major cost driver of insurance premiums for private insurance coverage.  The prime drivers for the hospital price hikes include hospital pricing for emergency-room visits, surgical hospital admissions and administered drugs.

Hospital pricing is especially crazy.  This is particularly true as it relates to the health plans that employers provide to the approximately 150+ million Americans that rely on employer-sponsored health plan coverage.    The dirty little secret that’s fast becoming less of a secret is that hospitals charge health plans anywhere from 2 to 5 times more for hospital services than they charge Medicare.

We’ll be reporting more about this conundrum that is hospital pricing and what’s being done to combat or rein in the crazy pricing in upcoming posts.  

$19,616.

Coupons for Prescription Drugs: The Good, The Bad and The Ugly

Drug Coupons Explained

We encourage and help anyone we can to obtain a coupon for their prescriptions.. We know, however, that there are emerging issues with them.

Some background 

Drug manufacturers have some amazing but expensive medications. They have created coupon programs that help the consumer pay for the prescriptions up until that consumer reaches their insurance company deductible (most coupon programs require the consumer has insurance).

For the consumer, that appears to be fine.  That is the good.

Once the member meets their deductible (even though they may not have actually paid that full amount, due to the coupon), the insurance company is hit with the cost.  For the remainder of the year the carrier is paying the full cost on refills for that prescription.  That is the bad (at least for the insurance company).

The battle between the manufacturer and insurance company is now heating up. The manufacturer wants to let the consumer off the hook for the cost (so they will use their product) but wants to get to the carrier reimbursement portion. Some insurance carriers have concluded that since the consumer did not actually pay for the prescription, deductible credit should only be given for what the consumer actually paid. We assume more carriers will follow suit.

We are beginning to see the consumer caught in the middle. The manufacturers do not want to keep filling the prescriptions for free.  If they see that the member was not given deductible credit from the insurance carrier, the member is then billed for the full cost.  The consumer assumes the coupon will work and does not find out it was rejected until after the prescription has been filled. The consumer then gets billed.  And, that is the ugly.

We at BBG still see the coupon option to be worth researching and using.  However, we are urging our clients’ employees and dependents to research this and reach out to us for help. We know a lot about these options and are learning how get ahead of being blindsided.

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