Applied behavior analysis standard coverage to be for autism

Applied behavior analysis therapy is one step closer to becoming the standard of care for children with autism as a judge in Philadelphia granted class action lawsuit status to lawsuits against health insurance company Cigna that continued to claim that it was experimental treatment. We expect this legal step will make it impossible for Cigna and other insurers to continue to resist the trend. Generally, the medical community believes that behavioral therapy provides greater results at a lower cost that other types of traditional therapy. The insurance companies listed on the individual health insurance exchanges already cover applied behavior therapy where coverage for children with autism is included by law.

We applaud S&P downgrades of US and its insurance companies

Following the downgrade by Standard & Poor’s of the U.S. sovereign credit rating on Friday, the credit rating agency also announced rating actions today on 10 U.S. life and health insurance companies. The following actions were announced by S&P on Monday August 8:

Five of the largest U.S. life insurance companies were downgraded from AAA to AA+ and removed from credit watch negative, with outlook remaining negative: Knights of Columbus, New York Life, Northwestern Mutual, TIAA and USAA.

Five U.S. life insurers had their ratings affirmed and outlooks revised to negative:  Assured Guaranty, Berkshire Hathaway, Guardian, MassMutual and Western & Southern.

S&P’s view of these companies’ fundamental credit characteristics has not changed. The actions follow as a result of the downgrade of the U.S. sovereign credit rating on Friday from AAA to AA+ with negative outlook. Additional insurance company credit rating downgrades could follow. We applaud the actions of S&P simply on the basis that it would be a disservice to consumers and users of S&P credit information for S&P to continue to send the message that all is rosy in financial world.

 

The contraceptive/insurance controversy

This is a short brief in bullet format on the story behind the “contraceptive controversy” that sparked so many comments yesterday.

• The federal law known as the “Affordable Care Act” passed in 2010 requires insurance plans to cover preventative care at 100% without co-pays or deductibles.
• The effective date of this provision of the law will most likely be the insurance plan’s first anniversary following December 31, 2011.
• The Obama Administration instructed the Department of Health and Human Services (HHS) to draft he specific regulations of this provision. The public was largely unaware that their instructions were to include preventative services in the regulation without regard to the cost effectiveness of the required coverage. Apparently even some of the medical professionals charged with preparing supporting data for the regulations disagreed with the final results.
• Health insurance is regulated by state law as well as federal law. Some states have stated they will not allow the provisions of the federal law and more than half of the states have filed suit against the federal government to prevent the implementation of these changes. The case is not expected to be heard by the Supreme Court until late 2012 or 2013. It is not clear what impact this ongoing controversy will have on health insurance plans next year.
• Public outrage was triggered by the specific requirement that health insurance plans cover contraceptives including the controversial “morning after pill“.
• Employers generally oppose the measure because the cost of this regulation is expected to be about $1.40 for each $1.00 of actual care provided under the provision. This is because of the added costs of the administrative process as opposed to simple cash payment for these relatively inexpensive medical items. It simply does not make economic sense to cover preventative care under insurance plans, even after adjusting for the savings achieved by early detection of medical conditions.
• “Grandfathered insurance plans” are exempt from the regulation but we expect few of these to survive. In fact, none of our thousands of small business group insurance clients, to our knowledge, will have qualifying exempt insurance plans. It is possible that a few large corporations might be able to preserve their insured health plans from modifications required under the current law. In short, we believe that the “grandfathered health plan” is simply a myth for the large majority of Americans.
• Many other types of insured and uninsured health plans are exempt from the regulation including short term medical, mini-med, limited benefit, catastrophic illness, self-insured, discount PPO plans, etc. Industry research indicated that more employers planned to utilize these exemptions even before yesterday’s announcement so we expect away from major medical insurance will be further fueled now.
• Insurance companies are expected to take the easiest route through this maze. Since their operations are most directly controlled by state insurance regulators, we anticipate that insurance companies will abide by the wishes of local regulators in the event of a conflict with federal law.

Freedom Benefits will continue to work with businesses and individuals to customize their health plans with or without the provisions of the Affordable Care Act. We continue to believe that in most cases there is enough flexibility in the market and existing laws to exercise significant control over coverage and costs.

In summary, we don’t expect that the new regulation on contraceptives will have significant impact on you or your business unless you allow it. However, if you want to avoid any impact, it might be necessary to take affirmative steps to modify your health insurance before December 31, 2011.

Exploding obesity rates linked to health care crisis

The nation’s exploding rate of obesity has come under focus as the target of efforts to control our nation’s health costs. In 2006 only on state has an obesity rate over 30%. In 2011 there are ten states with this alarming rate of obese residents. This could be interpreted as a ten-fold explosion of a crisis-level situation. Obesity has been tied to a number of the most costly and disabling medical conditions and chronic treatment routines including diabetes, cognitive degeneration and heart disease. In earlier publications Freedom Benefits has also tied the effects of obesity to the inability to find health insurance. This issue  is not fully publicized because no large-scale study has examined the causal relationships between obesity, socio-economic status, lack of insurance and health initiatives at the individual level.

Since the 1960s, the association between medical costs and human-controlled behavior has been apparent. The commonly cited metric is that 80% of our total medical costs are directly impacted by five behaviors: overeating, lack of exercise, abuse of drugs and alcohol, lack of stress management and smoking. Recently the federal government published a study that revealed that more than half of the nation’s health care costs are attributable to the 15% least healthy members of the population.

A survey published by BenefitsPro titled “The ten fattest states in America” listed ten states with obesity problems now at crisis level. Mississippi, Alabama, West Virginia, Tennessee, Louisiana, Kentucky, Oklahoma, South Carolina, Arkansas and Michigan all have adult obesity rates of more than 30% of adults. Obesity rates for children are also growing at alarming rates. While only half of these states have a higher than average overall rate of uninsured residents, we suspect that the problem would be more severe among adult obese residents.

Employers have taken the leading role in addressing the obesity issue as more become aware of lost productivity. Employee benefit consultants and brokers have focused on delivering research-based management solutions to employers to enhance behavioral change. Large employers increasingly emphasize employee wellness programs and charge higher insurance rates to those who do not meet self-determined behavioral criteria goals. Freedom Benefits establishes similar programs for smaller firms.

The problem with free medical care

We’ve noticed that Medicare spending on doubtful procedures has gone well beyond the “out-of-control” stage. Virtually everyone we talk with who works with Medicare recognizes the problem yet no one has the motivation or political courage to make a change. This comment comes from the Pittsburg Post Gazette:

Medicare excesses

The debate on raising the debt ceiling has been an interesting exercise about
the future role of government. While I have always considered myself left of
center, I feel strongly that we need to address the excesses of Medicare.

Recently, a friend canceled a cochlear implant surgery for her 91- year-old
aunt. Her aunt wanted the surgery because it was “free” and she wanted to hear
better. I just found out that my 75-year-old father had this same surgery! His
doctor recommended it and my father trusted him. The surgery required cutting
into his skull and weeks of recovery — and it didn’t work. He lost all of his
hearing. It was free, though.

Three years ago, Medicare also paid for a very expensive surgery to remove my
80-year-old stepfather’s intestine as he was in the last stage of bladder cancer
with a few weeks to live. He never woke up from surgery.

Is this really how we want our very scarce resources spent? Open up Medicare
for change — or is Big Pharma that influential?

Trends and opportunities in small business employee benefits

Despite this week’s rosy press report by the Department of Health and Human Services, our convservations with clients and the majority of long term insustry indicators tell us that most small businesses continue to have severe difficulties managing employee benefits for employees. The percentage of employers who sponsor employee health plans declines each year even though employers strongly beleive that a health plan is key to employee satisfaction and retention. Eastbridge Consulting Group published the results of a study CDHC Solutions™ for Solutions Outlook 2011 that includes a number of useful observations. We considered these in relation to Freedom Benefits efforts and applicability to the small business employee benefit plans.

• The number of employees who leave their job voluntarily has surpassed the number of employees who leave involuntarily according to Bureau of Labor Statistics’ Job Openings and labor turnover Survey, October 2010. This was considered to be one signal of the end of the recession. Voluntary employee walk-outs add additional costs for employers and may have the effect of lengthening the financial effects of the recession for these firms.
•  88% of employees said that choices are “important” or “extremely important” when it comes to benefit packages. Large employers almost always offer employee choices but other industry studies show that less than 1 in 4 small businesses offer a choice in employee benefits. Adoption of a Freedom Benefits flexible benefit plan helps to address this concern by giving the legal and practical framework to expand benefit choices.
•  Most Americans still get their financial security products through their employer. There is no reason to believe this will change as the Patient Protection ans Affordable Care Act (PPACA) is implemented over the next few years.
• Only 23 percent of employees said they owned insurance (other than auto and homeowners’) outside the workplace. This result is surprising in light of another recent report of double-digit growth of long term care insurance ownership in many parts of the U.S. and the report that this expansion is not coming from employer-sponsored plans. A provision of the 2010 health reform law known as CLASS is expected to dramatically affect these figures in coming years although it is not clear whether consumers will continue to rely on salary-deducted voluntary methods for this type of insurance. In the end, the combination of the effects of PPACA and other financial reforms will increase employee reliance on employer-sponsored and voluntary salary-deducted products for their financial planning.
• Medical, drug, dental and vision insurance are seen as more important types of employer-sponsored benefits today while other types of benefits have taken a step back in importance. Employees became more conservative during the recession, focusing on what they perceive as the core coverages. It appears that the only obstacle to making all four a standard feature of employer-sponsored health plans is cost. Medical is considered the most important of the four and the other three are offered is budget allows. The largest growth in perceived importance by employees over the 2006-2010 period is vision insurance.
• 37% of employers expect to increase the employee contribution toward benefit costs this year while 29% expect to increase deductibles, copay, or other point-of-service benefits costs this year. In many cases small businesses may feel as if this was forced upon them by changes introduced unilaterally by their insurance company.
•  14% of employers expect to cap their total benefit costs by going to a “defined-contribution” approach. This is where Freedom Benefits expects to have the greatest impact with a range of defined contribution plans, including the most popular choice, the small business Health Reimbursement Arrangement (HRA) plan.

Considering all of these factors, it seems likely that a significant portion of small businesses could achieve greater employee satisfaction and improved retention at a lower overall cost of benefits by incorporating some of these concepts into their benefit plan design. Adaption of today’s best practices in employee benefit plan design and administration tends to maximize employee participation and  increase the small business employer’s and employee’s realized payroll tax savings.

Freedom Benefits offers low-cost small business employee benefit plans customized for each employers’ unique requirements. Emphasis is placed on reducing payroll taxes, capping employer expense and offering employees the widest possible range of benefit choices. A free proposal is available upon request. Send an email to Tony Novak at tnovak@freedombenefits.net or call (800) 609-0683 to schedule an exploratory interview and request a free proposal.

HCC repositions to expand self-funded health plans

HCC Insurance Holdings, Inc. (NYSE:HCC) today announced that effective July 1, 2011, Perico Life Insurance Company, a
subsidiary of HCC Insurance Holdings, Inc., is combining its operations with HCC Life Insurance Company (HCC Life). This strategic consolidation of operations
will allow HCC Life to better utilize its capital and improve its efficiencies  in providing the premier medical stop loss product to the self-funded
market. HCC Life will continue to provide superior services.  As a result, all  in force accounts and underwriting requests for proposals will be redirected to
the appropriate HCC Life regional office.

“This combination demonstrates HCC Life’s increased commitment to the self-funded market,” said Craig J. Kelbel, HCC Life’s President and Chief
Executive Officer. “We have an opportunity to combine our resources to benefit our producers and policyholders while maintaining the superior service for which
we are known.  For more than 30 years, we’ve been making sound business decisions to grow our company and the industry, and we are anticipating
continued growth through this combination.”

HCC Life Insurance Company has a financial strength rating of “A+ (Superior)” from A.M. Best Company Inc. and is backed by the financial strength of its
parent company, HCC Insurance Holdings, Inc.

Headquartered in Houston, Texas, HCC Insurance Holdings, Inc. is a leading international specialty insurance group with offices across the United States
and in the United Kingdom, Spain and Ireland. As of March 31, 2011, HCC had assets of $9.3 billion and shareholders’ equity of $3.3 billion. HCC’s major
domestic and international insurance companies have financial strength ratings of “AA (Very Strong)” from Standard & Poor’s Corporation, “A+ (Superior)”
from A.M. Best Company Inc., “AA (Very Strong)” from Fitch Ratings, and “A1 (Good Security)” from Moody’s Investors Service, Inc.

IMG Patriot Travel Insurance announces improvements

The following products will be updated to include new benefits. The official notification of the rollout date will be coming soon.

• Patriot Travel Medical Insurance^®
• Outreach Travel Medical Insurance^SM
• Patriot Group Travel Medical Insurance^®
• Patriot Green^SM Travel Medical Insurance
• Patriot Platinum Travel Medical Insurance^SM

In summary, the following updates will be made:

• Sudden and Unexpected Recurrence of a Pre-existing Condition (all plans):

  U.S. Citizen
  – Up to age 65 with a Primary Health plan – URC up to certificate maximum
  – Up to age 65 without a Primary Health plan – $20,000 lifetime maximum
  – Age 65 + with or without a Primary Health plan – $2,500 lifetime maximum

  Note: Primary Health plan must have existed prior to effective date and during coverage of the
  IMG plan and the pre-existing condition must be covered under the Primary Health Plan.

• Evacuation Plus Rider: Provides coverage for emergency medical evacuation for medical conditions that are non-life threatening and evacuations as a
  result of a natural disaster. Patriot Platinum Non Life-threatening Medical Evacuation – Up to a maximum of $50,000. Disaster Evacuation – Up
  to a maximum of $10,000. Requirements: Up to age 65. Available with a minimum of 3 months of coverage regardless of the minimum number of days
  being traveled.
• Patriot Group Travel, Patriot Green same additional base changes as Patriot Travel
• Rate Hold - We are holding rates on these plans with the exception of Patriot Platinum America; however, it will now include an additional benefit for non-U.S.
  citizens.
• Platinum Only Enhancement – Coverage up to $20,000 for a Sudden and Unexpected Recurrence of a Pre-existing Condition for non-U.S. citizens up to age 65.

most popular search terms on Freedom Benefits insurance exchange

The five most popular search terms on the Freedom Benefits insurance exchange this month were:

United States Fire Insurance Company

Celtic Insurance

extending cobra beyond 18 months

Core Health Insurance

can cobra be extended

American Medical Association supports individual insurance mandate

 

The American Medical Association reaffirmed its support for the individual mandate provision of the Affordable Care Act that requires every American to buy insurance. The measure is opposed by 26 states that have brought legal action against the federal government. The AMA released this statement today:

The American Medical Association (AMA) voted today at its annual meeting to continue its policy supporting individual responsibility for health insurance with assistance for those who cannot afford it.

"The AMA has strong policy in support of covering the uninsured, and we have renewed our commitment to achieving this through individual responsibility for health insurance with assistance for those who need it," said AMA President Cecil B. Wilson, M.D. "The AMA’s policy supporting individual responsibility has bipartisan roots, helps Americans get the care they need when they need it and ends cost shifting from those who are uninsured to those who are insured. Important insurance market reforms, such as an end to coverage denials based on pre-existing conditions, are only possible by having broad participation in the health insurance market."

The AMA reviewed alternatives and concluded that any approach to covering the uninsured that is in line with AMA policy cannot be fully successful in covering the uninsured without individual responsibility for health insurance.

The policy was reaffirmed by the AMA House of Delegates (HOD), which includes physicians representing all state and medical specialty societies. The HOD also reaffirmed support for AMA policy supporting health insurance tax credits and health insurance market regulation, health savings accounts, and direct subsidies for the coverage of high risk patients.

The AMA position is certainly reasonable in light of its interests in ensuring that every patient has a source of revenue for the medical service providers. Yet many Americans do not believe that they should be required to buy health insurance and therefore oppose the new law. The U.S. House of Representatives voted to repeal the 2010 health care reform law and the U.S. Senate may reconsider repeal this year. If still unresolved, the issue will likely be heard by the U.S. Supreme Court in 2012.

Freedom Benefits opposes the measure but believes that the law will ultimately be upheld and become effective in 2014.