Blue Cross and Blue Shield of Illinois (BCBSIL) announced a first year renewal rate cap of 9%* for groups with 51-100 employees.

New groups with 51-100 insured employees sold with Jan. 1, 2012 – July 1, 2012 effective dates can take advantage of this offer if they meet the eligibility requirements below, which include completing individual medical applications.

Group Eligibility Criteria

• Groups must have 51-100 enrolled employees selecting products within the BluePrint product portfolio.
• The group will need to include our BlueChoice Select® and/or BlueAdvantage HMO network in the benefit offering to their employees. There will not be minimum enrollment requirements in these networks.
• The Illinois Small Group Standard Health Application including Section F (Health Statement) and Section G (Additional Information) must be completed by each participant applying for coverage.

*Please note that demographic adjustments between +/-3.0 percent will be included in the cap. However, if the demographic adjustment is outside this range, the non-demographic adjustments will be capped at 9.0 percent and the full demographic adjustment will not be included in the cap.

Tags: bcbsil small group rate cape, BlueCross BlueShield Illinois 2012 group health rate cap

(Crain’s) — After surging earlier in the year, profits of the parent of Blue Cross & Blue Shield of Illinois dropped sharply during the second quarter, to a still hefty $270 million, as benefits rose and membership shrank.

Chicago-based Health Care Service Corp’s net income fell nearly 23% during the second quarter compared with almost $350 million in the year-earlier period. The fourth-largest insurer in the U.S. has a tight grip on the health insurance market in Illinois, making its performance a matter of keen interest to employers, employees and people who buy individual insurance policies.

“They’re far and away No. 1,” said Joel Peyton, an analyst who studies the Illinois insurance market at Nashville, Tenn.-based research firm HealthLeaders-InterStudy. “I don’t see that changing anytime soon.”

Health insurance profits are expected to come under increased scrutiny because of a new law—part of the federal overhaul of health care—that requires the companies to pay a fixed percentage of revenues on medical care and activities that broadly improve health care, such as patient education.

Quarterly fluctuations in net income are not unusual for health insurance companies. Health Care Service’s second-quarter showing was offset by the insurer’s strong first quarter, when profits soared to nearly $437 million.

As a result, Health Care Service’s net income rose 13.2%, to $706.3 million, during the first half of 2011, compared with $623.9 million during the first half of 2010, according to a second-quarter statement the company filed with the National Assn. of Insurance Commissioners, which is a clearinghouse for insurance financial information.

For Health Care Service, rising benefit expenses are inherent in having a large claims base, and the company’s membership continually changes, a spokesman said.

He added that the drop in net income was partly caused by a lower rate of return on short-term investments, which he declined to provide.

The financial reports only cover Health Care Service’s insurance operation. Not included is its low-margin, fee-based work administering health plans for self-insured clients.

“It’s very difficult to look at our filing and get a full picture of the business,” the spokesman said.

Health Care Service is a mutual company, owned by its policy holders.

Insurance companies report their financial results on a cumulative, quarterly basis. Crain’s calculated Health Care Service’s second-quarter results by subtracting its first-quarter results from those for the first six months.

Profits plummeted in the second quarter even though revenue rose 4.5%, to $4.93 billion, compared with $4.72 billion for the year-earlier period. Benefit expenses, money spent on health care, climbed 3.6%, to a little more than $4 billion, in the second quarter, compared with $3.9 billion in second-quarter 2010.

Membership slipped 1.5%, to about 7.62 million, in the second quarter, compared with 7.73 million members in second-quarter 2010, when the company’s enrollment was boosted by Unicare Inc.’s exit from Illinois and Texas, states where Health Care Service is strong.

“Given the current economic and competitive environment, (Health Care Service) and the health insurance sector as a whole will continue to be challenged with organic membership growth over the next year,” according to a report by Moody’s Investors Service issued on July 12, before the company released its second-quarter results.

Health Care Service’s net profit margin tightened to 5.5% during the second quarter, compared with 7.4% for the year-earlier period.

The company wrote 54.1% of all small group plans and 71.9% of all large group plans issued in Illinois in 2010, according to a report earlier this year by the National Assn. of Insurance Commissioners, which is based in Washington, D.C.

During the second quarter, Health Care Service paid off $400 million in debt.

That loan was essentially replaced with $500 million in unsecured notes that the company issued earlier this year. Those notes, at an interest rate of 4.7% a year, come due on Jan. 15, 2021, according to Health Care Service’s second-quarter filing.

Tags: BCBS 2011 profits, BCBS profits, BCBSIL profit drop, Health Care Service Corp proftis 2011

Blue Cross and Blue Shield of Illinois (BCBSIL) announced the launch of 2 new child-only health insurance policies: Blue Pathway^SM and BlueChoice Pathway^SM. These new products provide coverage for children ages 1 through 18, who do not have other major coverage available to them for purchase.

The plans are designed to give children access to affordable health insurance in Illinois and is the only child-only policy available in the state. This product also complies with the requirements of the Affordable Care Act.

Blue Pathway and BlueChoice Pathway are “guaranteed issue” products. Children who are eligible for these plans will be approved for coverage, regardless of their health status. Applicants must still meet any non-health related eligibility criteria and must not have other major medical coverage available to them for purchase.

2011 Initial Open Enrollment Period

Beginning on July 15th through August 15th, 2011, individuals interested in the BluePathway plans can enroll on the BCBSIL website at www.bcbsil.com/coverage/individual/bluepathway.html.

Biannual Open Enrollment Periods

Beginning in 2012, enrollment in Blue Pathway will be open every January 1 to January 31, and July 1 to July 31.

Tags: bcbsil child health insurance, bcbsil child only plans, blue cross and blue shield of illinois bluepathways child health insurance, bluechoice pathway health plan, bluecross blueshield of illinois child only plans, bluepathways health plan, illinois blue pathway child health insurance, Illinois child only health plans

On May 12th, Aetna announced the discontinuation of new business sales for our Aetna Advantage Plans for Individuals, Families and the Self Employed in Indiana. Online quoting and application submission for these plans has been disabled.

We are writing today to advise of Aetna’s decision to withdraw from the individual health insurance market and the impact to our existing members.

Note: Aetna will continue to offer AARP® Essential Premier Health Insurance Plans, insured by Aetna and Small Group Plans (groups with 2-50 employees) in Indiana.

Impact to existing members
Our withdrawal will occur in steps over a 6 to 18 month period.

Members do not need to take any action at this time. They will be able to maintain coverage under their current Aetna policy until at least December 2011. Depending on the date of their annual policy renewal, their coverage will end between December 1, 2011 and December 1, 2012.

From June 1, 2011 through November 30, 2011: All existing policies will remain in effect. An existing policy may be renewed if the date of the annual policy renewal occurs by November 30, 2011. The renewal period will be one year.

From December 1, 2011 through December 31, 2012: All outstanding policies will end on the date of their annual policy renewal. For example:

* If a policy renewed on February 1, 2011, coverage will end February 1, 2012.
* If a policy renewed on August 1, 2011, coverage will end on August 1, 2012.

We will continue to allow existing Aetna Advantage Plan members in Indiana to add spouses and dependents to their plans until their coverage ends. However, existing members will not be able to change plans.

How will individual members be notified of this change?
All existing policyholders will be notified by mail on or about June 1, 2011.

While Aetna will continue to administer their individual health plan for at least six months, policyholders are strongly encouraged to seek alternative health insurance coverage prior to their policy termination date indicated above. Members may be eligible for coverage under either Indiana Comprehensive Health Insurance Association or under individual Indiana Health Plan. More information on these two coverages is available at www.indianahealthagents.com.

Tags: Aetna withdrawing from Indiana

As previously announced in the Feb. 9, 2011 issue of News from the Blues, Public Act 96-1513, the Illinois Religious Freedom Protection and Civil Union Act, was signed into law on Jan. 31, 2011. Effective June 1, 2011, the law’s intent is to provide procedures for the certification and registration of a civil union in Illinois. Any person who enters into a civil union in Illinois consents to the jurisdiction of the courts of Illinois for the purpose of any action related to a civil union.

Also defined are prohibited civil unions and the process for dissolution as dictated by the Illinois Marriage and Dissolution of Marriage Act. Illinois residency is not an explicit requirement for an Illinois civil union. Illinois will offer “reciprocity” and recognize as a civil union any same-sex marriage, civil union, domestic partnership or substantially similar legal relationship, other than common law, entered into in other states. Additionally, the law does not link domestic partnership to civil union.

Since this is not an insurance law, Blue Cross and Blue Shield of Illinois (BCBSIL) has made the following business decisions:

• Spouses of civil unions will be eligible for coverage if the policy covers spouses in marriage for BCBSIL fully insured individual and group business, including HMOs, as well as self-funded state municipalities, school districts and counties, just as most insurance laws would typically apply to these entities.
• The law will extend to BCBSIL contracts issued and delivered in Illinois, regardless of where the member resides.
• Although the law provides religious organizations the freedom to choose not to officiate or solemnize a civil union based on their religious practices, as an employer, religious organizations are required to extend benefits as mandated by law. Therefore, if the religious organization is fully insured or offers fully insured products (such as HMO), the law will also apply to them.
• * All other self-funded ASO business will have the option to choose to provide coverage to a civil union spouse and dependents. The ASO Benefit Program Application (BPA) will be updated to accommodate this selection.

For insured business, coverage will be offered to a civil union spouse and dependents upon the qualifying life event of the BCBSIL member entering into a civil union on or after June 1, 2011. If the member does not elect to change their coverage within 31 days of entering into a civil union, the next opportunity will be upon the employer group’s open enrollment period. For group coverage, it is the employer group’s responsibility to determine eligibility, just as it is currently.

ASO municipalities, counties and school districts and ASO customers that choose to do so, should offer coverage to a civil union spouse and dependents upon their renewal as of June 1, 2011 and thereafter.

Existing BCBSIL members who have previously entered into a civil union as legalized by another state are able to add their civil union spouse and dependents upon the employer group’s next open enrollment.

Certificate language is under review in order to determine any applicable or necessary changes. With the exception of the ASO BPA, there will not be any changes to any other business forms or collateral materials (such as highlight sheets, product reference guides, enrollment guides, etc.). There are no changes to any of our health, dental or life products and/or benefit plans. Generally, civil unions will be treated the same as traditional marriages.

The Illinois Department of Insurance (IDOI) is expected to issue an insurance FAQ on the law in early spring 2011 and BCBSIL will make any appropriate adjustments based on the IDOI’s direction.

Tags: BCBS Illinois Civil Union Eligibility Guideslines, bcbsil civil union act, How the Illlinois Religious Protection and Civil Union Act affect health insurance, Illinois Civil Union Health Insurance Eligibility

Republicans in the House of Representatives on Friday accused the AARP of gaining financially from President Barack Obama’s healthcare overhaul, which the powerful advocacy group for older Americans supported.

Republican members of a House Ways and Means subcommittee grilled AARP Chief Executive Officer Barry Rand and AARP President Lee Hammond on the nonprofit organization’s health insurance operations.

Rand defended the group’s public policy positions and said money received from insurance licensing agreements was used to fund social-welfare programs for AARP’s 37 million members.

Republicans argued that the group would gain financially by cutbacks in the law to the Medicare Advantage program that delivers Medicare health benefits through private insurers.

“The facts show AARP no longer operates like a seniors’ advocacy organization,” said health subcommittee Chairman Wally Herger, a California Republican. “Instead, it more closely resembles a for-profit insurance company.”

Herger was referring to a report on AARP finances and operations that he wrote with fellow Republican Representative Dave Reichert and which was released this week. They have asked the Internal Revenue Service to investigate AARP’s tax-exempt status as a nonprofit organization.

Democrats questioned the motives of Republicans for holding the hearing, saying it was political payback for supporting Obama’s healthcare restructuring.

“Your sin … is that you backed the Affordable Care Act,” Democratic Representative Jim McDermott said to Rand.

LOSING MONEY

Rand challenged the Republican report’s findings saying: “We reject the allegation that our public policy positions are influenced by our revenues.”

He said that it was more likely the group would lose money under the law, as AARP-branded insurance plans for people between 50 and 64 become obsolete when insurance companies in 2014 can no longer exclude people from coverage because of medical history.

The healthcare law also beefs up the Medicare drug benefit for the elderly and limits how much more insurers can charge older people for coverage compared to younger people.

UnitedHealth Group Inc. (UNH.N) offers supplemental health plans, called medigap plans, using the AARP brand. The plans fill in the coverage gaps left by traditional Medicare. The company also offers a Medicare Advantage plan, which offer more comprehensive coverage, through AARP. Aetna (AET.N) offers AARP-licensed health plans to the 50-64 age group.

The Republican report said that Aetna plans represent a small portion of the $657 million in insurance royalties received by AARP in 2009. Sixty-five percent of AARP royalties come from medigap products that stand to gain from the healthcare law, the report said.

Reichert said that the report pointed to “a direct conflict of interest between AARP’s advocacy for eliminating the Medicare Advantage program … and the massive profits AARP receives from sponsoring medigap plans.”

Rand said the money was used to support AARP’s social welfare programs, which include helping older Americans find jobs, providing information on financial security and aiding the hungry.

It is not the first time AARP’s nonprofit tax status and its insurance affiliations have been questioned. In 1995 then Republican Senator Alan Simpson, who served as co-chairman of Obama’s deficit commission last year, probed the organization’s business practices.

The group came under fire from Democrats in 2003 for its support of the Republican-backed Medicare prescription drug plan. (Reporting by Donna Smith; Editing by Xavier Briand)

Tags: AARP in trouble, AARP insurance revenues, AARP medicare supplement kickbacks

The nation’s top five health insurers made $11.7 billion in profits in 2010, according to a release from Rep. Pete Stark (D-Calif.). 



That made the top five health insurers more profitable than the top five energy companies, construction companies, airlines, motor vehicle and part manufacturers and food and drug stores.

Here is a breakdown:

UnitedHealth Group. It made $4.63 billion in profits last year and collected $6.09 billion more in premiums over 2009, while only spending $3.55 billion more on medical care.

WellPoint. It made $2.89 billion in profits last year and spent $637 million less on medical care compared with 2009, while collecting $545 million less in premiums.

Aetna. It made $1.77 billion in profits last year and spent $1.34 billion less on medical care compared with 2009, while collecting $633 million less in premiums.

Cigna. It made $1.35 billion in profits last year and collected $2.35 billion more in premiums over 2009, while only spending $1.64 billion more on medical care.

Humana. It made $1.10 billion in profits last year and collected $2.79 billion more in premiums over 2009, while only spending $2.31 billion more on medical care.

Tags: 2010 Health Insurance Company Sales, Health Insurance Companies 2010 Profits, Health Insurance Profits

Group insurance benefits experts have long used Guardian for their clients’ dental, vision, disability and life insurance needs. Guardian never became a heavy hitter in the group medical insurance arena as shown by the comparatively small number of employees covered by their group plans.

It is a good move by UnitedHealthcare to acquire these groups. But since this change in carriers is being thrust upon these groups, it would be wise for them to look at other carriers and not assume that they will be getting the best plan for their group with this transition.

Here is the original report:

Guardian Life Insurance Co. of America is exiting the group medical insurance market and has reached an agreement with UnitedHealthcare to renew coverage for Guardian clients. In a memo to brokers prepared in a question-and-answer format, New York-based Guardian said “its modest medical market share and its use of rental networks significantly hampered its ability to compete in the group medical sector that has frequently favored large national medical carriers.”

As a result, “Guardian has determined that continuing in the medical insurance business is no longer a strategic fit,” the memo said.

Guardian Life will withdraw its medical insurance product line in all states, and will wind down its existing business over the next two years. The decision was announced in a Jan. 25 e-mail to brokers from Scott Dolfi, Guardian’s E.V.P. of Business Operations.

The carrier will drop its group medical plans, both self-funded and fully insured, as well as its prescription drug plans and individual medical coverage. The move will not impact Guardian’s non-medical product lines, according to Dolfi. These include dental, disability, life, critical illness, voluntary worksite, retirement plans and individual life and disability offerings.

As part of the transition, Guardian is working with UnitedHealthcare to provide comparable health care plans for clients. UnitedHealthcare has entered into an agreement to renew medical insurance coverage for The Guardian Life Insurance Company of America’s medical plan customers and will broaden choice and access to care for Guardian medical customers through one of the largest local and national networks in the country, highly integrated clinical programs and a full range of affordable products.

The following is a quick overview of what Guardian individual and group clients can expect:

• As Guardian’s medical customers reach their renewal dates, dedicated UnitedHealthcare sales representatives will work to enroll these customers in a comparable UnitedHealthcare plan.
• Guardian medical customers are also welcome to transition to a new medical plan with UnitedHealthcare ahead of their renewal date. 
• Until members are enrolled in a medical replacement plan with UnitedHealthcare or Guardian’s withdrawal becomes effective, their current benefits remain in effect under their existing contract with Guardian. 
• During this process, it is business as usual. Guardian is committed to ensuring continued service, medical coverage and payments for its customers during the transition period.  

Guardian intends to continue to offer other benefit coverages, including dental, life, disability and vision care. Guardian’s group health care business primarily comprises small and midsize employers, and most of the plans it offers are preferred provider organizations, the Guardian spokesman said.

Tags: Guardian Insurance Company Exits Health Insurance Market, United Healthcare and Guardian, United Healthcare buys Guardian, United Healthcare Takes over Guardian health insurance

Effective November 15, 2010, Advocate BroMenn Medical Center and Advocate Eureka Hospital and their employed Advocate physician partners will be participating with UnitedHealthcare® and UnitedHealthcare of the River Valley commercial lines of business.

These new agreements with Advocate significantly expand access for UnitedHealthcare commercial membership in the Bloomington, Normal and Eureka communities of Illinois. Please note because these providers are effective November 15, 2010, they will not yet reflect participating status in systems or directories.

Tags: Advocate BroMenn Now Part of United Healthcare PPO Network, United Healthcare and Advocate BroMenn Medical Center, United Healthcare and Advocate Eureka Hospital, United Healthcare Illinois PPO Network Updates

-UnitedHealthcare and Silver Cross Hospital in Joliet, IL, today announced they have signed a new multi-year network agreement. The contract includes all Silver Cross inpatient and outpatient services. The Free-Standing Emergency Center in Homer Glen, IL, the Center for Women’s Health in New Lenox, IL and the hospital’s three dialysis centers– Silver Cross Renal Center in Morris IL, and Silver Cross Renal Center East and Silver Cross Renal Center West, both in Joliet are all covered by the contract.

This new agreement, effective Dec. 1, expands UnitedHealthcare’s network hospitals in the greater Joliet area, and covers all commercial products.

“Our new network relationship with Silver Cross Hospital gives our customers greater access to high-quality medical facilities and skilled physicians closer to where they live and work,” said Tom Wiffler, president & CEO of UnitedHealthcare of Illinois. “Silver Cross is an important provider of health care services in the area. We believe this agreement strengthens our shared commitment to deliver broader access to quality, affordable health care for consumers.”

“The UnitedHealthcare agreement is a major addition to our health insurance offerings,” said Paul Pawlak, President and Chief Executive Officer with Silver Cross Hospital. “This strategy is part of our commitment to expand the number of insurers in our network in direct response to the growth in our community and the feedback we have received from residents. We are very pleased to offer this new choice to area employers and patients.”

Tags: Silver Cross Hospital and United Healthcare, Silver Cross Hospital and UnitedHealthcare Enter in to Multi-Year Agreement, Silver Cross Hospital Now Part of United Healthcare PPO Network