Healthcare Issues

Open Enrollment is Over. So Now What?

Media outlets have been buzzing since Tuesday about the passing deadline of open enrollment and what the next phase of implementing the new health care system will bring. There is a lot of “noise” about whether the 7.1 million number of new enrollees reported by the White House is an inflated number, mostly because many believe there is a large percentage of enrollees who have yet to pay for their insurance. Also, there is a great deal of speculation that insurance companies will raise their rates next year along with reports that indicate the implementation of the new health care system will weigh heavy on large employers, causing their expenses to rise [additionally] by nearly 6% [over and above what they would already spend] over the next ten years.

Kaiser Health News offers a round up of commentary from several sources in
Open Enrollment is Over — What’s Ahead for the Health Law Now?

Meanwhile, Marketwatch by Wall Street Journal reports ADP just released it’s 2014 ADP Annual Health Benefits Report. This is their second annual report, based on actual, aggregated health benefits data from U.S.-based companies with 1,000 or more employees. According to a press release by ADP, “…the report provides employers with benchmarks to better gauge the effectiveness of their current strategies and to help plan for changes on the horizon.”

The data was collected by a survey of employees (anonymous) from a group of employers spanning from 2010 to 2014. Key findings of the report include:

  • Premium increases are leveling off
  • Employers are contributing slightly less
  • Overall participation is steady, but varies with age
  • Costs vary by state

You can download a free copy of the ADP report here.

Your employees. Are they medicaid eligible?

There are many opinions about Medicaid expansion and my post is opinion free.

Employers across all sectors of the economy are likely to have Medicaid eligible employees/dependents in their population. Many do not know they are Medicaid eligible and some may be on the employer plan.

What does this mean?

Like anything, researching it may be the best first step. Simply finding out if this exists in an employer population may make sense.

Then what?

Some employees will be delighted to know they qualify, some may be upset. Some employers will take advantage of Medicaid expansion to reduce the rolls on the employer-sponsored plan while others may hate the idea and avoid it all together.

We respect all opinions but we also are developing a tool to determine eligibility and — if the employer would like — assist in the enrollment process. We will be launching it next month.

We want to help any employer that wants to know who in their population is eligible for Medicaid and then listen to find out if there is anything the employer would like to do about it.

What is Medicaid?

  • Medicaid is funded largely by the federal government but run by the states
  • Unlike Medicare, Medicaid eligibility is based on income.  The Affordable Care Act expanded medicaid to reach well beyond prior eligibility pools (it will now 133% of poverty level).
  • Medicaid operates as nearly 100% coverage for all medical expenses.
  • Medicaid networks are more restrictive than Medicare or commercial policy networks
Medicaid used to be accessible only to children and low (really low) income parents with dependent children. Single people did not qualify. Parents with eligible children did not qualify often. Eligibility now is much much wider.
In the next few weeks we will be rolling out a tool to assist any employer/employee evaluate Medicaid eligibility.

Insurance policies are like pay-day lending.

Some insurance policies remind me of pay-day lending. People are strapped for cash and prescriptions are expensive. So, we buy insurance policies with “baked-in” prescription co-pay plans. Is it efficient? NO. Is it expensive? YES!

It is like pay day lending. You can’t afford the short-term cash flow challenge (the copay solves that) so you end up buying a much more expensive policy than what you really need.

Employers often do the same thing because they don’t want to impose on their workforce the worry or challenge of paying the full cost for their prescriptions at the point of sale.

This is a real problem.  So we developed a solution.

Several years ago we partnered with our clients and a group of pharmacies. This partnership allows employees to pay ONLY their share of the costs at the time of purchase. The employer pays the balance using a program we developed called SharedFunding. SharedFunding has worked great for our clients.  Why?

  1. The employer saves a substantial amount of money by purchasing a high deductible plan where even prescriptions are subject to the high deductible. They then promise to cover a set portion of the prescription for the employee (a copay, for example).
  2. The employee has the option to fill a prescription at one of our partner pharmacies and only pay their share when they pick up their script.

I was naive at the beginning, but then I learned:

  1. People tend to be terrified when the hear they have to pay up front for prescriptions…. even if they are going to get reimbursed.
  2. Some people are in a tight financial situation and cannot deal with any float — it is embarrassing to them and many end up NOT getting the prescriptions they need.
  3. Employers want to save money and offer smart strategies, but they don’t want to inject anxiety into their workforce.
  4. The total financial equation saves everyone a lot of money and no one gets hurt.

We can’t help you much with payday lending, but we CAN help you with the equivalent scenario baked into some health plans.

Another Delay Leads to More Certainty, More Uncertainty

In the coming days, HHS will announce another change in the health care roll out. This time, they are going to allow carriers to keep and issue policies that do not meet ACA guidelines. This adds to the recent pushback on the employer mandate to 50-100 employee companies AND the lessening of enrollment requirements on larger employers.

The Certainty. 

Groups and individuals that embraced the “early renewals” last December will now have the choice to keep those plans for another year. This will make the late summer and early fall less noisy as many will likely sign back on for another year.

The Uncertainty.

Will new products emerge?  If carriers are allowed to issue policies that do not conform with ACA, will some move to issue less expensive policies or even offer lower rates to underwritten non-ACA plans? Employers and Individuals may buy these plans if they are less costly, even if they may be available only for a year.

Will this push back the “individual mandate?” Since the mandate requires one to have a “compliant plan,” how will the IRS enforce this when HHS allows non-compliant plans to be offered?

ACA’s goal, in large part, is to regulate the market. While this and other adjustments to ACA may make the short term more quiet, it raises questions about how they will enforce the law down the road. At some point HHS is going to have to decide what they are going to stand behind (and enforce) and what they are going to abandon.

As the law gets tweeked, it increases the chances that companies will do whatever makes sense to them and stop focusing on what they need to do in order to follow the law. If employers conclude that the law is a moving target, they may just create their own strategy, their own certainty.

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