Illinois Insurance News

The Affordable Care Act, passed in 2010 and is being rolled out in stages. Many reforms, most notably the individual health insurance exchanges, won’t go into effect until 2014, but some small-business owners are experiencing sticker shock already and blame the new law for the rising health insurance rates they’ve seen over the past 2 years.

Supporters of insurance exchanges argue that they can be a game-changer for small-business owners in particular. Insurance exchanges can offer new options for covering employees at competitive and more realistic prices, they argue. Currently, small-business owners typically pay much higher premiums than large employers because they don’t have a large enough pool to spread out risk and reduce the cost of coverage.

Here are a few options small businesses can consider as they wait for healthcare reforms to kick in:

1. FIND OUT IF YOU QUALIFY FOR A SMALL-BUSINESS TAX CREDIT.

Businesses with fewer than 25 full-time employees paying staffers an average annual salary of less than $50,000 may now be eligible for tax credits of up to 35% of the cost of their premiums. Employers need to pay more than half the premium to qualify. It is difficult for many employers in a higher-wage market such as Chicago to qualify, but for those smaller businesses that fit the narrow definition, pursuing the credit may be well worth the effort. Tax experts estimate only half of small businesses even realize there’s a health care tax credit that they could qualify for.

2. ANALYZE WHETHER YOUR BUSINESS SHOULD CONTINUE OFFERING COVERAGE UNDER HEALTH REFORM.

Under the new law, employers with staffs of 50 or more could face penalties of $2,000 per employee if they don’t provide insurance. Some business owners say their coverage already exceeds that, so a penalty could be a more affordable option. If you run a mid-sized business, start analyzing whether it would make sense to continue offering coverage or to pay the penalty and send employees to a state exchange.

Illinois is among 17 states that have made significant progress toward developing health insurance exchanges, the new markets on which individuals seeking insurance will be able to purchase it that begin January 1, 2014, according to the AP analysis. Thirteen states have already adopted a plan, but are home to only 25% of the uninsured. The 20 states lagging behind account for the biggest share of the uninsured, 42 percent.

3. ADOPT A WELLNESS STRATEGY.

While a wellness incentive plan for employees may not pay big dividends right away, the plans help employers qualify for significant discounts on overall coverage. By providing employees with tools, resources, and incentives to make and maintain healthy lifestyle choices, health insurance premiums become lower over time as the overall health of the company improves. Insurance companies such as United Healthcare, Humana, and BlueCross BlueShield are also trying to provide a more robust solution around wellness by offering rewards-based programs to their members. Members have to do something for a healthy lifestyle to earn an incentive. For example, if a smoker attends a smoking cessation program, an insurance company may reward them with a gift card.

4. LOOK CLOSELY AT STATE-RUN HEALTH INSURANCE CO-OPERATIVE PLANS.

The ability of states to develop non-profit, member-run health cooperatives that could compete for better rates is part of the health reform legislation, and some advocates feel this aspect of reform hasn’t gotten the spotlight it deserves. While cooperatives have produced mixed results in the past, they can reduce costs when done right, particularly for small-business owners. Health cooperatives are a great opportunity, and hardly any small businesses know about this option. For small group employers, this could mean finding whole new ways to bring competitiveness to the table.

Tags: 2012 Small Business Health Care Reform, Illinois small business health insurance mandates 2012, Illinois small business health insurance options, Small Business health insurance laws, small business healthcare laws

The Obama administration defended its healthcare overhaul law before the U.S. Supreme Court on Friday, rejecting arguments by critics who warned that if the government can require people to have health insurance, it might next make them eat broccoli.

Administration attorneys, in court filings and at a briefing, said Congress was within its constitutional powers in requiring Americans to buy insurance by 2014 or pay a penalty, a centerpiece of the law known as the individual mandate.

The law’s opponents have argued that Congress overstepped its authority and have raised the hypothetical question of whether Congress next could require that all Americans eat broccoli because of the nation’s obesity crisis.

The Supreme Court has scheduled three days of oral arguments in the legal battle for March 26-28, with an election-year ruling expected by the end of June.

The law, Obama’s signature domestic policy achievement, seeks to provide health insurance to more than 30 million previously uninsured Americans. His prospective Republican presidential opponents all have strongly opposed the law.

A Supreme Court ruling striking down the law would be a major political and legal setback for Obama ahead of the election, while a decision upholding it would be vindication. Polls show Americans deeply divided over the law.

A senior administration official, who declined to be identified, told reporters that Congress, in adopting the law, responded appropriately to a national crisis after years of debate.

The broccoli hypothetical has “no relevance to the case at hand,” the official said, maintaining that the insurance purchase requirement was “not the same” as mandating that people eat or buy broccoli.

The healthcare law has been challenged by 26 of the 50 states and by an independent business group as an unprecedented move by Congress that exceeds its constitutional powers.

The states involved in the challenge, in a Supreme Court brief, on Friday said the entire law, which President Barack Obama signed in March 2010, should be struck down.

“The individual mandate is the centerpiece of the entire federal health care act,” said Attorney General Pam Bondi of Florida, a state that has led the legal challenge.

“If the court removes the individual mandate, the main hub of the act, the entire health care law must be invalidated.”

The administration’s arguments in its brief backing the law largely mirrored those previously made in its initial appeal to the Supreme Court filed at the end of September.

The attorneys said the law was an attempt by Congress to address a crisis in the national health care market, capping nearly a century-long effort to expand access to health care by making affordable health insurance more widely available.

They cited statistics showing that healthcare accounts for 17 percent of the nation’s economy and argued that the law was a valid exercise of Congress’s power under the Constitution to regulate economic activity affecting interstate commerce.

The brief also cited a law that Massachusetts adopted in 2006 when Mitt Romney was governor. Romney is the frontrunner for the Republican presidential nomination to face Obama in the November elections.

The brief said Congress cited the Massachusetts law as a model for key provisions, including the provision requiring that individuals purchase insurance or pay a tax penalty.

Opponents of the law also filed briefs with the Supreme Court on Friday.

The conservative American Center for Law and Justice filed a brief on behalf of 117 Republican members of the U.S. House of Representatives and 100,000 of the center’s supporters urging the justices to declare the entire law unconstitutional.

Thirty-six Republican U.S. senators said in a separate brief the entire law must fall if the individual mandate is struck down.

The Supreme Court cases are National Federation of Independent Business v. Sebelius, No. 11-393; U.S. Department of Health and Human Services v. Florida, No. 11-398; and Florida v. Department of Health and Human Services, No. 11-400.

For National Federation of Independent Business: Michael Carvin of Jones Day.

For Sebelius and the Department of Health and Human Services: Donald Verrilli Jr, Solicitor General of the United States.

For Florida: Paul Clement of Bancroft.

(Original Source from Reuters)

Tags: Healthcare Law, Healthcare Reform 2012, Obama Healthcare Reform Supreme Court, Obama Lawyers Defend Healthcare Law In Supreme Court

(Reuters) – The breakdown of deficit talks in Congress will exact little pain on the U.S. healthcare industry, but it’s a temporary reprieve from steeper cuts that could be put back on the table in 2013.

The failure of the congressional “super committee” to reach a deal triggers a 2 percent across-the-board cut to Medicare, the government program that provides coverage to millions of older and disabled Americans.

That translates into about $123 billion over the next decade — far lighter than the $500 billion to $700 billion in cuts that could have hit hospitals, doctors and beneficiaries, as well as insurers, drugmakers and nursing homes, if the panel had reached a deal.

But the writing is on the wall for deep healthcare cuts, as the nation’s population ages and draws on federal benefits.

If nothing changes, Medicare, Medicaid and Social Security will devour 100 percent of all tax revenues by 2047, according to the non-partisan Government Accountability Office.

“Congressional staffers and members have been pretty direct with healthcare industries: If you’re not on the list now, you probably will be later,” said Washington-based financial analyst Ipsita Smolinksi.

For the time being, the automatic cuts slated to begin in 2013 will be little more than a nick for both the health industry and politicians loathe to pull back Americans’ health benefits ahead of elections next year.

“Two percent is not a lot for Medicare to absorb. About all that happens is a few more providers, like doctors and hospitals, stop accepting new Medicare patients,” said Joseph Antos of the conservative American Enterprise Institute.

“It’s light compared to what we’ve seen with really big pieces of deficit reduction legislation in the past, particularly in the 1990s,” he added.

HOSPITALS, DOCTORS HIT BY CUTS

As stipulated, automatic cuts are likely to hit hardest among hospitals, which are the biggest recipients of Medicare payments and account for nearly 50 percent of program spending, federal statistics show.

Hospital company stocks including HCA Holdings (HCA.N) and Health Management (HMA.N) moved lower with the broader market in trading on Monday.

Doctors suffer a double whammy from the collapse of the super committee. Physicians and clinics receive about 25 percent of Medicare spending.

Further, the breakdown in negotiations quashed hopes among doctors that the panel would eliminate an almost 30 percent cut in Medicare payments scheduled to go into effect in January under a 1997 balanced budget law.

A so-called permanent “doc fix” would have cost nearly $300 billion in lost savings, making it unlikely at a time of deficit reduction.

Analysts said the best healthcare providers can hope for is another short-term fix to stave off the payment reductions.

The automatic cuts would also reduce funding for insurers that participate in Medicare Advantage, a program segment that allows senior citizens to purchase private insurance.

PUNTING THE MAJOR CUTS

Analysts and lobbyists said the deeper pain for the healthcare sector is expected after the 2012 elections, when many expect Congress and the White House to face new calls to contain the deficit and the growing U.S. debt.

“There is no doubt that this will mean there will be enormous pressure in 2013,” said Ron Pollack of Families USA, a healthcare consumer advocacy group.

That could give new life to proposals to save more than $100 billion by raising copays, premiums and private insurance costs for beneficiaries of Medicare’s fee-for-service system.

Higher beneficiary costs could reduce the ability of millions of Americans to seek care from doctors, hospitals and nursing homes. But analysts say it could also benefit private insurers by making traditional Medicare less affordable.

If revived, a $135 billion proposal to extend Medicaid drug rebates to Medicare beneficiaries would mean a 2 percent to 7 percent hit to drug company revenues, according to a recent report from Moody’s Investors Service.

Hospitals could again face $9 billion in cuts to Medicare spending for medical education and another $20 billion in reduced federal support for coping with bad debts.

Tags: 2013 Healthcare Changes, Healthcare Reform Changes

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

2012 Highlights:

Most elderly Americans covered by the U.S. government’s Medicare insurance program will see a smaller-than-expected rise in their monthly premiums next year, health officials said on Thursday.

Standard premiums for Medicare Part B, which covers doctor visits, outpatient services and some home healthcare, will be $99.90. For most Part B beneficiaries, that means paying just $3.50 a month more, compared to the $10.20 that was expected.

The annual Part B deductible will decrease by $22 to $140, U.S. Department of Health and Human Services officials said.

For newer and higher-income Medicare enrollees, the new standard premium represents a drop of $15.50 a month from $115.50 a month they have been paying in 2011.

A majority of Part B beneficiaries have had their premiums frozen since 2008 at $96.40 a month because the federal government-run Social Security retirement plan made no cost of living adjustments (COLA). A special provision links Part B payments with the checks from which they usually get deducted.

Last week, U.S. seniors found out their COLA checks will see a 3.6 percent bump in 2012, and many worried that the awaited increase would get gobbled right up by an expected Medicare premium hike.

Instead, the return of COLA payments means the new Part B costs are again spread among all Medicare members, not just newer and higher-income beneficiaries.

“More people are sharing in the smaller-than-expected increases in costs,” said Dr. Don Berwick, the Centers for Medicare and Medicaid Services administrator, who said the healthcare reform passed last year also helped limit costs.

The surprisingly modest premium increase announced on Thursday could lift some pressure from President Barack Obama and fellow Democrats in Congress as they seek to win over U.S. seniors ahead of the 2012 election.

“Millions of America’s seniors are struggling with higher expenses … and this small increase is welcome news,” AARP legislative policy director David Certner said in a statement.

AARP, the leading lobby group for American seniors, still fears deep cuts to Medicare and Social Security may emerge from a Congressional “super committee” tasked with finding ways to cut U.S. debt.

Some 44 million Americans were enrolled in Medicare Part B in 2010 when the program’s benefits spending reached almost $210 billion, according to the 2011 Medicare Trustees’ report. The U.S. government covers about three-quarters of Part B benefits, while the premiums paid by seniors cover the rest.

Tags: 2012 Medicare Part B premium rise, 2012 Medicare Premium Increase, Medicare increase 2012

(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

On August 31, 2011, the COBRA continuation premium subsidy ended. Former employees who want to maintain their COBRA coverage during any remaining COBRA continuation coverage period will now be responsible for the full 100 percent of their premium payments.

The American Recovery and Reinvestment Act of 2009 signed into law on February 17, 2009 provided a government subsidy to COBRA participants. The government subsidy of 65% of the monthly COBRA premium amount (including the 2% administrative fee) for up to 15 months was available to any individual involuntarily terminated from employment between September 1, 2008 and March 31, 2010. Since that time, the COBRA subsidy has been extended to individuals involuntarily terminated through May 31, 2010. No congressional acts for extending the COBRA subsidy have been proposed. As a result, the last subsidy-eligible COBRA participants who were involuntarily terminated on May 31, 2010 will see their government subsidy ending on August 31, 2011.

Here are a few things you can do to stay covered while you make your transition to your next job:

Short term insurance: These kinds of plans allow you to choose between 1-12 months of coverage. You can extend it if you need to. They also offer different deductibles, which enable you to work with the price, the higher the deductible the cheaper the premium. A family of 4 living in and (parents in their middle 30′s and two children under 10) might pay $120-$556 in monthly premiums for a six month plan.

Individual health insurance: If you are not sure how long you need coverage or may need coverage for more than 12 months, you can purchase an individual health policy. These plans never expire and there is no contract so you can cancel them at any time.

Here is our link that provides individual plan options, quotes, and applications:
Quoting Link

If you have a pre-existing condition: You may qualify for the your state’s high risk pool. In Illinois, http://www.chip.state.il.us/default.htm for more information. These premiums are significantly higher. Those who qualify might purchase an individual plan for themselves and apply for a less expensive, short term plan for other family members.

Tags: 2011, 65% COBRA subidy, COBRA Subidy ending August 31, COBRA Subidy exipration options, COBRA Subsidy expiring, what to do after COBRA subsidy ends

The Department of Health and Human Services has issued new guidance stating that plan sponsors of all stand-alone Health Reimbursement Arrangements (HRAs) with rollover of unused funds in effect prior to September 23, 2010 will no longer be required to seek waivers from federal rules that restrict annual dollar limits on coverage of essential benefits.

Due to this new exemption, plan sponsors won’t have to apply for waivers from the annual minimum dollar limit of $750,000 in 2011, $1.25 million in 2012 and $2 million in 2013. As a result, large group plan sponsors will be able to continue to provide significant HRA benefits to their participants.

The good news is that through 2013 you can have a stand-alone HRA. The bad news is you can’t after 2013.

The latest guidance builds on an earlier notice in which HHS said that HRAs that are integrated with group plans would be exempt from the annual limit requirements as long as the plan to which it was linked met the annual limit requirements.

Truth be told, stand-alone HRAs are relatively unusual. They have, though, been used by employers to meet requirements set by a San Francisco law that requires employers to spend a minimum amount of money on health care coverage for employees in the city.

HRAs also have been used by employers to help retirees pay for health care coverage, though federal regulators made it clear earlier that annual limit requirements do not apply to retiree-only plans. As a result, stand-alone HRAs for retiree-only plans are not affected by the annual limit requirements.

Tags: 2011 HRA annual minimum dollar limit exemption, health reimbursement arrangement exemptions, HRA minimum dollar limits

Many large U.S. employers intend to increase employees’ in-network deductibles and employees’ share of the premiums in 2012.

The National Business Group on Health (NBGH), Washington, has reported those findings in a summary of results from a recent survey of 83 large employers that employ about 4 million people.

Half of the employers are assuming the increase in medical trend — the expected increase in the underlying costs — will be 7.5% in 2012. That’s down from a median increase assumption of 7.7% used in 2011 benefits budget estimates, but the increase will come at a time when the economy is still soft.

About 25% of the participants identified increasing employee cost-sharing as the best way to cut costs, and 23% cited offering a high-deductible health plan that incorporates a personal account as the best approach.

Only 13% are expecting to increase in-network deductibles more than 10%, but 39% are expecting to increase the in-networks at least a little.

Similarly, only 10% of employers are expecting to increase employees’ percentage contribution to the premium cost by 10% or more, but 53% are expect to impose some increase in the percentage contribution.

Employers told the NBGH their health plans already are starting to face the effects of the Patient Protection and Affordable Care Act of 2010 (PPACA). PPACA has created a “grandfathered plan status” for plans that have undergone no major changes since the date PPACA became law. Having grandfathered status protects a plan against some of the new PPACA mandates. But only 23% of the employers said they are certain to have any grandfathered health plans in place in 2012.

Tags: 2012 Employee health insurance premium increase, 2012 Employer Deductible Increase, Employers Plan to Increase Deductibles 2012

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