Medical Insurance Blog

Medical Insurance Rate Increase Filing Clarified by Anthem Blue Cross

Last March, Anthem Blue Cross had filed rate increases with the CA Dept. of Insurance that was declined due to miscalculations on Anthem's part.  Originally, medical insurance rates were expected to be increased by as much as 39%. 

Since then, Anthem Blue Cross has revised and resubmitted their rates for October 1, 2010.  These new medical insurance rates have been approved, and rates will be increased by 14% up to 20% for their members that were scheduled to have rate increases is March, April, May, June, July and August. 

According to Anthem, they have said that there is a lot of misinformation in the media regarding their rate filings.  They clarified that the miscalculations were mostly related to the way that they had estimated future medical costs, and that their original March rate filings met the requirements of CA law for 7 out of 8 of their products. 

Going forward, Anthem has taken many steps to improve their internal rate review processes to make sure that their rate filings are accurate.  They have enhanced the outside 3rd party evaluation, and have enforced a meticulous internal evaluation process by actuaries that are independent of Anthem Blue Cross's individual business.  They have also been helping people to understand what goes into their rates, by publishing information on their website at www.anthem.com/ca, to improve transparency. 

With these new rates, Anthem expects to lose at least $100 million in 2010, following another loss in revenue that occurred in 2009. 

Anthem Blue Cross & Insurance Reform Relating to Preventative Care

The new health care reform law includes a provision that requires medical insurance companies to provide preventative services without any member cost sharing. 

 

Non-grandfathered plans issued or renewed on or after September 23, 2010 will not include member cost sharing or copays for the following preventative care services provided in-network:

• Items or services that have an A or a B rating in the current recommendations of the United States Preventative Services Task Force.  You can see a list of these services at: http://www.ahrq.gov/clinic/uspstf/uspsabrecs.htm.
• Immunizations for routine use in children, adolescents, and adults that are recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention.  You can see a list of these immunizations at: http://www.cdc.gov/vaccines/recs/acip/default.htm
• Evidence-informed preventative care and screenings provided for in comprehensive guidelines for infants, children and adolescents that are supported by the Health Resources and Services Administration.  You can view more information at: http://www.hrsa.gov/
• Evidence-informed preventative care and screenings for women not otherwise addressed by the U.S. Preventative Services Task Force recommendations that are supported by the Health Resources and Services Administration.

This impacts non-grandfathered plans issued or renewed on or after September 23, 2010, and it only applies to in-network services.  Out-of-network services will have the same cost-sharing requirements as they do today.

Most of the recommended screenings, immunizations and exam services are already on Anthem's preventative services list.  They are adding the new, required preventative services to this existing list.  One example of a new preventative service is counseling for aspirin use, tobacco cessation, obesity and alcohol use.  In addition, some services that are currently covered as a maternity benefit, such as recommended pregnancy screenings for pregnant women, will now be covered as a preventative service.

Anthem Blue Cross Health Care Reform Update

While most of Health Care Reform's provisions will go into effect in 2014, there have been some provisions of the Health Care Reform Act that will come into effect this year.

For example, children up to the age of 19 will no longer be declined health insurance beginning with plan years (or a policy year) of September 23, 2010 and later.  However, grandfathered individual medical insurance plans are exempt from this provision, but there may be limited exceptions to this exemption.  A grandfathered medical plan is a plan that you had in place on March 23, 2010 when the health care reform bill was signed.  Grandfathered group health insurance plans are not exempt from this provision.

Another provision is that insurance companies will no longer be allowed to rescind policies unless there is evidence of fraud or intentional misrepresentation of material facts.  An insurer will only terminate someone's coverage if it's due to a mistake in eligibility, without any fraud or misrepresentation on the member's part.  If the policy is rescinded, the insurance company must notify the member 30 days ahead of the rescission.  This provision is applicable to non-grandfathered and grandfathered plans.

Anthem Blue Cross is also making changes to their annual and lifetime dollar limits.  They are removing the limits, and will no longer have any annual dollar limits on certain "essential health benefits".  The definition of "essential health benefits" has not yet been determined. 

Members of Anthem Blue Cross who have already reached their annual or lifetime maximum will be offered a special enrollment time to re-enroll in benefits.  Anthem will let their members and terminated members know who are no longer receiving benefits for this reason, so that they can take advantage of the special re-enrollment period.  The enrollment period for groups will commence during the group open enrollment at the time of the group's renewal.  This provision only applies to pharmacy and medical benefits and does not impact vision or dental coverage.

Anthem Blue Cross will be adopting all patient protection provisions for all of their plans, including grandfathered plans.

For example, for all of Anthem Blue Cross plans that require primary care physicians, including grandfathered plans, Anthem will allow the member to choose any available in-network primary care physician, including participating pediatricians for kids.  Also, Anthem will allow individuals to obtain care from an in-network obstetrician/gynecologist without any pre-authorization or a referral.  However, pre-authorization for certain obstetrician/gynecologist services will still be allowed.

Another patient protection provision applies to emergency room services.  For instance, a pre-authorization will not be required for ER services, in-network or out-of-network.  Also, Anthem will be covering out-of-network emergency room services, and the copays and coinsurances for these services cannot be more than those for in-network emergency room services.  However, deductibles and out-of-pocket limits will be allowed for out-of-network ER services if it's the same used for other out-of-network benefits.

We will continue to pass along Health Care Reform information as we receive it.  Please feel free to call us at 1-877-812-5111 if you have any questions.

Insurance Regulators in CA Cracking Down On Medical Insurance Rate Increases

Anthem Blue Cross, Blue Shield of California, Health Net and Aetna will now be subject to an additional review of their proposed rate increases by actuaries that are independent of these medical insurance companies.

These four medical insurance companies cover approximately 90% of the individual medical insurance market in California.

This is in response to Anthem Blue Cross's proposed rate increases of up to 39% this past March.  The California Department of Insurance had sent the rate increase filing to an actuary outside of the insurer, and discovered errors in its filing.  They found that Anthem Blue Cross had tried to bill customers 50% more than the state of California allows.  Because of this, Anthem Blue Cross did not go through with the proposed rate increases.

Auto and homeowners insurance plans need to have approval by the state insurance department before adjusting its rates, yet in California, medical insurance companies have not been required to get approval.  However, the law in CA requires that each insurer maintain a 70% loss ratio, which means that 70 cents of every dollar that is obtained through premiums is to be used on medical benefits.

Medical insurers state that the premiums that they charge are in direct correlation with the increasing cost of medical care.  Research organizations in California that are non-partisan have said that there is a huge market power of hospitals which are driving the costs up.

Legislation Pending to Further Regulate Medical Insurance Companies

Proposition 103 has passed the state Assembly, advancing it to the California Senate.  Proposition 103 seeks to have medical insurance companies justify overhead costs and proposed medical insurance rate increases before increasing medical insurance premiums, co-payments or deductibles.

The restrictions would mostly apply to Blue Cross Blue Shield plans, and health maintenance organizations.  Now, they are regulated by the Department of Managed Health Care and the Department of Insurance.

The vote was 43-28, and the only party that voted in favor of the bill was the Democrats.  A similar bill was previously introduced twice, but never passed.  With the passage of medical care reform, it gave this legislation more support than it had ever had.  Plus, with Anthem Blue Cross's recent rate hikes of up to 39%, this bill had more of a reason than ever to pass.

The medical reform law has set aside $250 million to states to assist in rate reviews.

Medical insurance companies are insisting that the medical reform bill does not address the core issue of higher rates, which is the increasing cost of medical care.

New Anthem Blue Cross Medical Insurance Rates and What They Mean for Consumers

To go up, or not to go up: That is the question. At least, that has been the question as of late regarding the potential impact that health care reform will have on Anthem Blue Cross medical insurance rates as well as the other insurers.

For ordinary American consumers, the question is a pertinent one. On average, the annual premium in the United States for a person was $2,985; and for a family, $6,328. While this cost varies depending on several factors, including location, one can easily see how paying for medical insurance can be a burden. This possibility is why many Anthem customers are wondering if Anthem Blue Cross medical insurance rates will increase or decrease with the new health care reform.

Are Anthem Blue Cross Medical Insurance Rates Going Up?

In February 2010, Anthem Blue Cross surprised its customers, the government, and many in the industry by announcing that its premiums were going to be increased by up to 39% across the board. After a lively public debate over the increase, Anthem Blue Cross reexamined its data with an independent actuary and withdrew the rate increase proposal.

Anthem has yet to formally file a new proposal - so will rates go up, stay the same, or decrease? It is unlikely that rates will go down for the average consumer. The Patient Protection and Affordable Care Act (PPACA), signed into law in March 2010, contains many provisions that could result in an increase in premiums for insurers; which means that Anthem Blue Cross medical insurance rates will likely rise.

What Higher Rates Mean For Consumers

Although those who are currently affected by Anthem Blue Cross medical insurance rates will likely be subjected to rate increases, they may benefit under the new law as well. For example, insurers under PPACA will not be allowed to reject potential subscribers for pre-existing conditions or charge higher rates - and will not be permitted to charge higher rates for current illnesses. Also, Anthem Blue Cross medical insurance rates will be held down by the use of accountable care organizations (ACOs), founded on research that shows that as much as 30 percent of health care spending can be eliminated without sacrificing quality of care. Anthem, California's largest insurer, is establishing an ACO to reduce costs and moderate rates for its customers.

In short, even if Anthem Blue Cross medical insurance rates increase, the average consumer will likely be spared the full brunt of rising costs through healthcare reform.

Where Do Your Medical Insurance Premiums Go?

According to Anthem Blue Cross, 87 cents of every medical insurance premium dollar they receive from their members goes towards covering medical care and services that members receive, like doctor visits, hospital costs, prescription drugs, and more.  When costs for these services go up, Anthem's medical insurance premiums must go up (current Anthem Blue Cross medical insurance rates).  10 cents of every premium dollar goes towards services they provide for their members, such as claims processing, enrollment and billing services, provider credentialing and complying with government regulations.

The 3 cents of the premium dollar that is left is profit. 

3 cents of every dollar!  To put that into perspective, if you combine the annual profits of the top 10 medical insurance providers in America, that would be equal to just 2 days worth of national medical care expenditures!

Why are medical care expenditures and medical insurance premiums so high?  Technology is the key force behind medical care spending, accounting for an estimated 2/3 of spending growth.  After that comes inflation.  What we spend for the same medical services we had received years ago is a lot more expensive today, driving 51% of the growth in medical care spending.  Next comes cost shifting.  Cost shifting is what happens when government programs like Medicaid and Medicare underpay for medical services that patients receive.  Medical insurance companies have to pay for this shortfall.  In 2008, an independent medical research firm estimated that the total annual cost shift from Medicare and Medicaid to private medical insurance companies is more than $88 billion!  To break it down even further, for a typical family of four, that represents an additional $1,788 in annual medical care costs due to cost shifting.  Next is government compliance.  Medical insurance companies spend over $339.2 billion in order to comply with government medical regulations.  More than half of that money is spent on filing and reporting requirements. 

The last, and perhaps the most avoidable reason why medical costs and medical insurance premiums are increasing is because of American's lifestyles.  There is an increasing number of patients who are obese, conduct a sedentary lifestyle, and have poor nutrition...all of which contribute to chronic diseases, which account for 75% of the money spent on medical care in the U.S. each year.  Did you know that the percentage of obese adults now exceeds the percentage of healthy weight adults?  Also, almost 1/3 of adults do not get enough regular exercise, and 1/6 of adults have high cholesterol.

America's usage of medical services is staggering.  One half of all adults in the U.S. take at least one drug a day, while 7% of all adults in the U.S. take at least 5 drugs a day.  2/3 of people who go into a doctor's office come out with a prescription.  Between 1997 and 2007, prices for prescriptions grew 2.5 times faster than inflation.  And Americans have been receiving tests and treatments at an alarming rate...sometimes receiving tests that they already have had, other times undergoing a treatment that hasn't proven to work, and other times staying in the hospital unnecessarily.  On average, 1/3 or more of all medical procedures performed in America appears to be inappropriate, or offers questionable benefits, according to a RAND study.

Last but not least is medical care fraud.  Medical care fraud is conservatively estimated to be at about 3% of all medical care spending, which translates to more than $180 million per day!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Please feel free to post your comments. 

 

Wellpoint Responds To Allegations Of Rescinding Medical Insurance

In a shocking recent news release Reuters accused health care giant Wellpoint of rescinding medical insurance policies for women who have been diagnosed with breast cancer. Wellpoint firmly denies such a policy and defends itself against the allegations.

In its own statement, Wellpoint underlines the fact that it has worked and continues to work diligently to prevent breast cancer. It promotes early detection of the disease through regular testing and are proactive about getting treatment started quickly for those who have been diagnosed. Wellpoint goes on to discuss how claims are monitored and possible fraud is investigated when warranted. The in-house statistics state that fewer than 10% of Wellpoint's individual medical insurance policies were rescinded in the past year.

Wellpoint also addressed the issue that its parent company lobbied against having a third-party verify rescission decisions. This was in fact false. The company actually began such practices on its own in 2008 and was the first health insurance company to do so. They also created an application review committee, a single point of contact for those in danger of rescission and an appeals process to help deal with the issue of rescission.

Wellpoint reiterates its commitment to research in the field of breast cancer. Its guidelines recommend mammograms for all women over 40. Wellpoint even makes telephone contact with female clients to encourage them to undergo the preventative screening tests that are recommended for their age.

It is important to bring dubious and dishonest policies to light in the medical insurance world, but accusations should be proven without a doubt before such allegations are made public, potentially damaging the reputation of medical insurers who do take good care of those with serious illnesses.

Wellpoint has done an excellent job of confronting the allegations made by Reuters and has reaffirmed confidence in many when it comes to their treatment of those with breast cancer.

Medical Insurance Plans 2-Year Rate Guarantee Expires Today! Act Now!

Anthem Blue Of California 2-Year Rate Guarantee On Some Medical Insurance Plans Expires Today!

If you have been considering getting a new medical insurance plan, you should look at these medical plans today, before the 2-year rate guarantee expires. Having a 2-year rate guarantee is a great way to lock-in 2009 rates for the next 2 years...you could save hundreds or even thousands of dollars!

The 2-year rate guarantee is offered on these medical insurance plans:

• Smartsense 5000 Medical Insurance Plan
• ClearProtection 5000 Medical Insurance Plan
• ClearProtection 3300 Medical Insurance Plan
• PPO 3500 H.S.A. Compatible Medical Insurance Plan
• PPO 3500 Medical Insurance Plan

The effective dates have to be in April; therefore, the last day to request an effective date in April is today.  Effective dates of May 1, 2010 and later will only have the medical insurance plan rates guaranteed for 1 year.

Blue Cross Raising Their Medical Insurance Rates

If you are insured by Anthem Blue Cross you do have options to help you to lower your medical insurance costs. If you have been putting off applying for health insurance, now would be a good time before the rate increase takes effect.

Your options are:

1. Anthem Blue Cross has a website at www.changemycoverage.com. It is very easy to use and you can compare all of their plans and rates to your current plan. If you find a plan that meets your needs at a lower premium, you can apply online to change to the new plan.

2. Go to www.BestHealthcareRates.com where you can compare all of the medical insurance plans offered by all of the major insurance companies. Compare plans from companies such as Blue Shield, Anthem Blue Cross, Aetna, UnitedHealthcare, PacifiCare, Kaiser, Celtic, Assurant, Health Net and many more. You can apply online for any of these plans at www.BestHealthcareRates.com .

3. Call us at 877-812-5111 and we would be happy to help you find and apply for a plan that would better suit your needs. I hope you find these sites useful. If you have any questions, please do not hesitate to contact us. We are here to help!

Have a great day!