California Health Insurance Information and News

California health insurance companies are welcoming the second decade of the 21st Century with huge rate increases for small employers (2-50 employees). The largest rate increases are on the HSA (Health Savings Account) compatible plans. For their part, the health insurance companies blame the increases in the HSA plans on:

1) Increased utilization - meaning that many people are using a lot of medical benefits and the insurance companies are paying out more than they are taking in;
2) Improper pricing of the plan originally - Kaiser and Blue Shield of California both are having nearly 30% increases in their HSA plans and they claim that they "mispriced" the plans when they introduced them into the market place. (Skeptics might say that they intentionally priced the plans low to gain market share.)

On the HSA plans rate increases near 30% are not uncommon. Some groups will see nearly 40% increases. Small groups receiving increases less than 20% should feel lucky.

Some carriers like Anthem Blue Cross of California claim to have only single digit increases - which is true based on a comparison of rates the previous quarter. When compared to year ago rates, the increases are much higher.

Compounding the rate increases are the underwriting guidelines for many of the carriers (particularly Health Net and Kaiser) which automatically increase the Risk Adjustment Factor (RAF) to 1.1 for groups with fewer than 6 enrolled employees. Many employers have laid off employees and now fall below the 6 employee threshold and will see an additional increase in premiums.

Employers faced with these huge rate increases can change from one company to another and possibly offset the increase - there are anamolies that might work for certain groups. Call us 800-746-0045 if you would like to discuss your options.

Down grading to high deductible plans is also becoming popular - and these are HIGH deductibles. Anthem Blue Cross Solution plans with 2500, 3500 and 5000 deductibles might be an option. The HSA high deductibles may not be such a great deal.

We can only hope that the Federal health care reform will lower premiums - all indications however, are that premiums will actually INCREASE.

Aetna announced that on August 7, 2009 they will send a notice to former employees of their small business clients, terminated from employment between September 1, 2008 and May 10, 2009, advising them that they may be eligible for the Federal Subsidy for COBRA continuation of their health insurance. Aetna is using the California Department of Managed Health Care's model COBRA Subsidy Notice as their guide.

The notice informs employees that they may be eligible for a nine-month - 65 percent subsidy of the COBRA or CalCOBRA premium for medical insurance if they were involuntarily terminated from employment between September 1, 2008 and December 31, 2009. The subsidy is as a result of the American Recovery and Reinvestment Act (ARRA) signed into law February 17, 2009. Here is advice for employers wanting more information on the COBRA subsidy. Here is advice for employees seeking information on the COBRA subsidy.

Labels: cobra

In the California small group health insurance market Health Net's HMO plans are always well priced. Effective August 1, 2009 for groups located in Los Angeles their Elect Open Access HMO plan will be 5 percent less expensive than the Health Net Standard Option HMO.

The Standard and the Elect Open Access (EOA) plans have exactly the same benefits in terms of doctor office visit charges, hospitalization charges and prescription medicine benefits. In fact, the EOA plans have the additional benefit of allowing members to self-refer to any Health Net PPO provider for a consultation. The member pays $15 more than the primary care doctor office visit when seeing a PPO provider, but the member has the freedom to access this care.

So, the obvious question is how can the plan that allows access to PPO doctors for consultations cost less than the standard HMO? More benefits (almost)always means higher cost. There are two reasons the EOA plan costs less than the Standard HMO in Los Angeles:

1) Health Net filed the plan as a "POS" or Point-Of-Service plan which allows some cost sharing with the medical groups. This results in lower payments or "capitation" to the medical groups. The medical groups share in money from a reserve fund set aside to cover the out-of-network PPO services. If few people see PPO doctors for consultations part of the left over money goes back to the medical group and to Health Net. The members also benefit because they've paid a lower premium.

2) UCLA Medical Center does not participate in the Elect Open Access plan. UCLA Medical Center is a high-cost facility and apparently refused to accept the lower reimbursement rates.

So, if your Los Angeles based small business (2 - 50 employees) doesn't need to use UCLA Medical Center and you want a rich benefit HMO, Health Net's Elect Open Access HMO may be a very good choice. Click here to get a California Small Group Health Insurance Quote.

Labels: California Health Insurance, Health Net, Small Group Health Insurance

With summer and graduation upon us, we wanted to help people understand issues related to college health insurance.

Incoming freshmen have different concerns than recent grads; who have different needs than graduate students and we've written an article for each situation. Parents of these students will also find these articles helpful.

In addition, we've written an introduction to health insurance and an overview of college health plans - including specific steps to determine if enrolling in your college's health plan is a wise decision.

The learning curve to understand health insurance is often steep. We hope these articles will flatten the curve a bit.

Labels: College

Anthem Blue Cross of California announced that they will be making major changes to their small group health insurance plans effective July 1, 2009. Specifically, they will be adding 14 new plans. Beginning January 1, 2010, Anthem Blue Cross will discontinue 9 plans.

Anthem calls their entire portfolio of small business medical plans Employee Elect with additional portfolios referred to as Employee Choice and BeneFits. During the past 10 years the Employee Elect portfolio has grown from 12 plans to 29. With these changes Anthem Blue Cross will offer 34 plans in their Employee Elect portfolio, including 10 HMO plans. For many years Anthem Blue Cross only offered 3 HMOs: the 100%; Classic $250; and the Saver HMO.

According to Anthem Blue Cross, their research about consumer preferences indicates that people want many choices. The large selection of plans addresses this preference. A small business in California (2-50 employees) can offer all 34 plans to their employees at one time.

To help make sense of the many plans, Anthem Blue Cross has grouped the plans into "families" or "suites" of plans. The plans in each family function the same way but have different deductibles, copayments, and out-of-pocket limits. Here are the families of plans in the new Employee Elect portfolio:
* Premier PPO - rich benefit plans that pay "reasonable & customary" out of network;
* Copay PPO - Moderate deductible plans with Dr. Office visits before the deductible;
* Gen Rx PPO - comprehensive benefits but no brand medicine;
* Solution - High deductible PPO plans with Dr. Office visits & Rx before the deductible;
* Lumenos HIA+ - HRA style plans with first dollar coverage then a deductible, Rx after the medical deductible;
* Lumenos HSA (100/70) - plans pay 100% after the deductible with new 3-tier Rx benefits (previously there was no copayment for Rx after the deductible - but non-formulary medicine was not covered);
* Lumenos HSA (80/70) - lower premium HSA plans with co-insurance after the deductible;
* Elements Hospital - these are basic hospital only plans with very limited - if any out of hospital benefits and Rx benefits;
* EPO - in network only benefits suitable for "wrap products" that are like an HRA and pay expenses prior to the deductible; and,
* HMO - there are 10 HMO plans grouped in 4 categories: 100% hospital; Classic; Saver and Select.

You can obtain quotes for all of the new Anthem Blue Cross small group health insurance plans by clicking here. Don't hesitate to call us if you have any questions.