Tag Archives: uninsured

Ovation Shines a Light on the Newest Players in the Connecticut Health Plan Market

Executives representing more than 60 Hartford-area companies joined the Ovation team for a thought leadership event last week. The event was the third in the organization’s Chief Executive Series which takes place in May and November each year. The focus was on “Emerging Market Forces in the New World of Connecticut Health Plans” and featured a panel of leaders from Harvard Pilgrim Healthcare, HealthyCT, ProHealth Physicians and Rogers Benefit Group. Ovation Managing Principals Bill Carew and Brian Driscoll acted as panel moderators.

Continue reading Ovation Shines a Light on the Newest Players in the Connecticut Health Plan Market

How Will the Affordable Care Act Benefit Health Plans, Costs and Employees? With the Advent of Private Marketplaces!

Over the past two years, employers and their advisors have been working to digest, decipher, strategize and adjust to the impact the Affordable Care Act (ACA) has and will have on their company, its health plan and their employees.  For most, this has created additional work, confusion, cost and anxiety. However, despite all of the real and potential negative impacts to employers, the insurance industry is on the precipice of a transformational change that will benefit employers and employees – Private Marketplaces.

The “bad [extra work/cost]” stuff:

The regulatory impact on employers is dramatic. Here is a sample list of challenges:

exchangeClearly the ACA has complicated the sponsorship of an employer health plan. Despite all of these changes and the availability of Public Exchanges in the market, the new requirements in and of themselves wouldn’t necessarily transform the employer sponsored health plan arena. However, the same cannot be said for the insurance industry and specifically–insurance carriers.

The “good” stuff:

Aside from the introduction of Health Maintenance Organizations (HMO) and the development of Consumer Driven Health plans (CDHP), the sleepy insurance industry has been plodding along without significant change for 30+ years. It was in need of a shake up and that time has arrived.

The ACA has been the transformational catalyst that has forced insurance carriers to:

  • Upgrade or change antiquated legacy technology
  • Expand their ability to provide and support an increased number of plan options
  • Shift their focus and support structure toward the individual as a consumer
  • Increase their ability to be flexible with third parties

The Private sector is now poised to take advantage of the labor expended in response to ACA in the form of Private Marketplaces. The individual as the consumer is the concept that will dramatically change the social contract between employer and employee forever.

If you would like to learn more about the Private Marketplace phenomenon and how it may help your company and its employees, please join us for an experiential look at our Digital Benefit Marketplace at one of our upcoming scheduled seminars:

THE PRIVATE MARKETPLACE:
How the Rise of the Consumer Will Transform the Future of Employer-Sponsored Benefit Plans

Ovation’s Corporate Offices
5 Batterson Park Rd, Farmington, CT

Thursday, February 6
REGISTER

Thursday, February 20
REGISTER

THURDAY, March 6
REGISTER

Join Ovation’s Pia Brown and Brian Driscoll for an in-depth look at how the rise of the consumer is transforming the development and delivery of employer-sponsored benefit plans.

With the advent of the Affordable Care Act and Insurance Marketplaces, employees now have more options than ever before. In the past, employers have navigated their employees through their health insurance choices–now they can hand that challenging task to the team behind a Marketplace.

Attendees will learn the ins and outs of public and private marketplaces, what these options mean for their bottom line, and ultimately how to leverage the opportunity that the rise of the consumer now offers. Learn more.

The Fate of Obamacare – It Will Fall vs. It Will Survive: Part 2

As an organization built to service employer-sponsored-health plans, we have spent the last three years researching, interpreting and developing strategies to deploy in response to the Affordable Care Act. Unlike most of the population who is just now experiencing its impact and providing direct feedback, we have been debating the direction of this landmark legislation almost on a daily basis.

At our November C-Suite Series- A Chief Executives’ Guide to Thriving in the Chaos of Health Care Reform, our Managing Principals surveyed the audience regarding their forecast of the fate of ACA. The two most popular positions were:

  • The ACA will survive, but will be significantly modified
  • The ACA will fall under its weight

Though time will produce the final answer, we asked Bill and Brian to provide thoughts and arguments for these possible outcomes. Brian’s response was posted earlier this week.  Bill’s is below:

The ACA Cannot Succeed Without Substantial Restructuring
–Bill Carew, Managing Principal

First things first: I think the ACA is an incredibly bad law. The only reason that it became law in its current form is because it was rammed through the Senate via a procedural maneuver made by Democrats called “Reconciliation.”  Had Scott Brown not won the old Ted Kennedy seat in Massachusetts, the law would have been reconciled between the Senate and House versions and a cleaner law would have emerged.  But since Scott Brown won, the ACA was passed via Reconciliation and we are stuck with one sixth of the economy now being shaped by a bad law.

We cannot go back to the pre-ACA—there is no putting the toothpaste back in the tube. Pre-ACA, there was universal agreement that the cost problems and medical trend that drove the market were huge challenges for employers and consumers alike.  On top of that, we all know that new entitlements are incredibly hard to take away, and the insurance reforms (pre-ex, dependents to age 26, etc.) have been successful and enjoy (largely) bi-partisan support.

BillC_Headshot

So the question is this:  how can the existing law be amended to fix the major structural problems in the new system?  Or can it ever be fixed, or must it fail altogether?  To answer the question, we need to define the structural problems, which are clear and unambiguous: COST.

It is really just about the money. The fiscal problems created by the ACA will ultimately drive the need for change.  Over the next two years, the cost of insurance is poised to increase–potentially dramatically–which will force carriers out of the exchanges in many markets (reducing competition) and increasing the cost of subsidies exponentially (creating enormous fiscal pressure).

First the how, then the what…

Realistically, the bill cannot be fixed anytime soon with this President and this divided government:

  1. Either the Democrats win the house and keep the Senate in the 2014 mid-terms (not going to happen) and the Democrats pass whatever fixes are necessary; or
  2. There is a new President after 2016 and the government is united and a single party fixes the major problems (it will be too late for full repeal); or
  3. The fiscal problems of the ACA are so big that the tone and tenor changes and bipartisan compromise prevails.

So what fixes are required to make the law successful? Very simply, reduce the cost of insurance premiums for younger participants.  There are four  separate changes that can be implemented:

  1. Reduce the cost shift to younger individuals, thereby increasing the premium cost for older participants
  2. Provide more flexibility in benefit design, including buy-down options that will be more attractive to younger individuals
  3. Reduce burdens on carriers to reduce the cost of administration and compliance
  4. Cap or reduce the total amount of government provided subsidies

Attracting younger and healthier employees is the secret to lower costs:  85%+ of cost is driven by healthcare claims, and the less healthcare consumed on average, the lower the cost.  The fountain of youth, my friends, is the secret to the survival of the ACA.

The Fate of Obamacare – It Will Fall vs. It Will Survive: Part 1

As an organization built to service employer-sponsored-health plans, we have spent the last three years researching, interpreting and developing strategies to deploy in response to the Affordable Care Act. Unlike most of the population who is just now experiencing its impact and providing direct feedback, we have been debating the direction of this landmark legislation almost on a daily basis.

At our November C-Suite Series–A Chief Executives’ Guide to Thriving in the Chaos of Health Care Reform, our Managing Principals Bill Carew and Brian Driscoll surveyed the audience regarding their forecast of the fate of ACA. The two most popular positions were:

  • The ACA will survive, but will be significantly modified
  • The ACA will fall under its weight
csuite
Bill Carew and Brian Driscoll poll attendees at a recent c-suite seminar on Health Care Reform.

Though time will produce the final answer, we asked Bill and Brian to provide thoughts and arguments to support both viewpoints. Brian’s response is below and Bill’s will follow this Thursday.

Please note that these views are published for the sake of argument only, and are not the expressed views of Ovation DBA or the Managing Principals.

The ACA Will Fall Under Its Own Weight
–Brian Driscoll, Managing Principal

“In theory, theory and practice are the same. In practice, they are not.” –Albert Einstein

If we were to look back on polling surveys four years ago, public opinion ran strongly in favor of the concept of affordable healthcare for all—the theory.  Though a noble mission, the mechanics and impact of transforming one sixth of the economy weren’t likely factored into most people’s response—the practice.

Applying an analogy; if we were to run a survey regarding an environmentally sensitive alternative energy program, most folks might agree with the idea. However, if you let them know that part of the program would include construction of a large wind turbine in their backyard, they would likely have a significantly different response.

That is where we are with the ACA. The theory part is over and the practice part has arrived. After discussing and debating the impact of the ACA for more than four years, the country is finally beginning to personally experience this sweeping legislation. The early returns are troubling—so much so, that one could strongly argue that this public policy will fall under its own weight.

Let’s take a look at the potential winners and losers:

Potential Winners:

Previously Uninsured:  the primary goal of ACA was to expand access and affordability to a target uninsured population of 47 million. Those that can now enroll in coverage either for free or highly subsidize will benefit.

Pre-existing Conditions:  anyone who previously did not have access to employer-sponsored healthcare and may have been denied individual coverage due to a pre-existing illness.

Medicaid Expansion Eligible:  25 states have expanded the definition of eligibility to include in most instances income levels up to 133% of the Federal Poverty Level.

35+ Demographic:  The underlying economic model of ACA requires the younger population to subsidize the older population.

Premium Subsidized: The population that receives a significant premium subsidy will find the program financially beneficial.

Insurance Companies:  With a target of adding 30+ million new subscribers insurance companies will recognize an advantage.

Dependent Age 26:  Expanding the definition of dependent in employer’s plans allows dependents to remain on their parents/ plans longer.

Potential Losers

Cancelled Individual Plans: Though all states have yet to report their data, 6+ million individual policies have been cancelled around the country. Though states have been authorized to reinstate policies, some significant portion of this population will be negatively affected.

Enrollment Struggles:  With the website problems continuing, there are likely to be folks who fall through the cracks and do not have coverage for January 1, 2014.

Rate Shock:  This will largely occur on a state by state and demographic segment basis, but there will be a sizable portion of the population that will find their prices increasing significantly.

Doctor Loss:  Some exchange models are offering plans with significantly reduced provider networks. We anticipate this will be a growing issue moving forward as carriers struggle to control costs, they will have to consider shrinking their networks. Losing access to one’s doctor is a highly emotional event and will affect a large number of individuals. Recently, United Healthcare removed 2,000 providers from their Medicare Advantage programs a move that was hugely disappointing to their senior members.

Security Violations:  Though at some point this will be less of an issue, the general lack of security surrounding the federal website will expose users and their personal information to improper use.

Medicaid Gap:  Since almost half of all states have decided not to expand the eligibility definition, there will be a segment of the population who are lower income earners but will not qualify for either Medicaid or a Premium Subsidy.

Spousal Subsidies:  If a husband or wife has access to affordable coverage, the other spouse is not eligible for a premium subsidy regardless of whether their combined household income would qualify.

18 to 34 year-olds:  Insurance is a risk sharing game and the only way the economic model works is to load up pricing on this population, which arguably is the most adversely affected group of all.

Religious Groups:  There continues to be a disgruntled Christian population that is fighting the law on reproductive concerns.

Insurance Companies:  We have the companies on both lists.  Since the twist and turns of the law continue, there is a large concern that the demographic mix in the exchanges may lead to a “death spiral,” meaning more of the old and sick vs. young and healthy. This could lead to large losses.

Since public opinion often informs public policy, the balance and size of the winners vs. losers will determine whether the law succeeds. There is a strong argument to be made that the “losing” groups will continue to grow in both number and volume. A recent Rasmussen poll illustrated that 55% of respondents want the law repealed and this was largely before some of the 2014 implementation impact hit.  These numbers will continue to worsen.

By the middle of next year and as a run up to the mid-term elections, the public outcry and pressure on politicians to stop this well-intentioned leviathan will be so severe that the legislature will be forced into taking corrective action to stop the law and the President will reluctantly sign on to dismantling his signature legislation.

Remember to check back in on Thursday for Bill Carew’s response in support of the ACA (but with major modifications).