The Health Shopper

On Sept. 1 the Obama administration will begin review of proposed premiums and rate hikes in 10 states, which currently do not sufficiently regulate health insurance rates. The federal government’s ability to broadcast and expose unfair or unreasonable rate increases under reform is expected to serve as a major protection for consumers, who saw rate increases of 20% or more last year.

Alabama, Arizona, Idaho, Iowa, Louisiana, Pennsylvania, Missouri, Montana, Virginia and Wyoming will all be subject to federal review of health insurance premiums. The government will review both individual and small group health plans for all but three states. Iowa, Pennsylvania and Virginia will be subject to review of only individual health plan rates
Oregon consumers have benefitted from similar federal rate regulation, with a recent proposed hike of 22% whittled down to about 12%.

Earlier this week we blogged about insurer-run retail clinics. A report from the Washington Post has pinpointed a new trend in insurer-run clinics: workplace health care. In the past, workplace clinics served a basic first-aid purpose for on-the-job injuries. Recently, employers have broadened the clinics to encompass more primary care oriented service. Of employers with 500 plus employees 15 percent already had on-site clinics with primary care services in 2010, according to consulting firm Mercer, and another 10 percent were considering the possibility.

What’s in it for the employer?

The employer’s motivation is twofold according to senior health researcher Ha Tu: providing immediate and consistent primary care could prevent potentially costly health issues in the long run; employees would also be given treatment that corresponds to their individual needs via evidence-based guidelines, leading to fewer outside tests and referrals.
According to physician Bruce Hochstadt at Mercer’s on-site clinic employers are also worried about adding a burden to the current strained health care system, especially in light of the addition of over 30 million health care recipients newly-qualified under the Affordable Care Act. Workplace health care may help alleviate some of the load. However, the future of on-site clinics after 2014 has been called into question – there is concern that health care and health care services may no longer be offered by employers in light of 2014’s health exchanges. But for now, on-site clinics are on the upswing.

What’s in it for insurers?

A large part of the draw for insurers is increased cost control and marketing opportunity. By providing care directly to the consumer insurers can get more hands-on with medical costs as well as begin marketing to the 30 million plus who will be required to purchase health care in 2014. According to CEO John Gorman of Gorman Health Group, insurers are currently more interested in controlling the spending of money as opposed to making money. “When you own the facility and you own the people who work there, it’s a lot easier to shape it in a way that conforms to the economic necessities of the local market,” Gorman said. The approach is akin to that of hospitals, which have recently begun to invest in clinics and primary care services alongside emergency care.

What’s in it for you?

For most working Americans, who spend 40 plus hours at the workplace per week according to the Bureau of Labor Statistics, on-site clinics are a practical option for basic health care services. Additionally, the clinics tend to have lower prices than community-based clinics. Provided services can range from basic annual physicals to long-term health management for chronic disease.

How would you feel about an on-site clinic at your workplace? Would you use one? Do you already have one? Let us know in the comments!

What is an unreasonable health insurance premium hike in your eyes? According to a new law instated under the Affordable Care Act by the Department of Health and Human Services, premium rate hikes of over 10% will be subject to scrutiny by state or federal regulators.
Insurers seeking double-digit rate increases will also be required to post explanations for the hikes on their websites and fully justify the increases to regulators, to help keep affordable health insurance within reach. However, the provision covers only individual and small group plans, leaving out large groups and major employer-provided plans, and HHS has requested feedback from policyholders on whether they would apply the law to insurance sold through organizations.

The new provision was prompted by WellPoint’s attempted rate increase of 39% in California last year, at which time HHS intervened and settled on a 14-20% hike instead. The new law aims to minimize these large-scale premium rate hikes and increase transparency. According to DeAnn Friedholm at Consumers Union, “This new rule sets an important standard for when rate increases are unreasonable and requires insurers to explain [the necessity of those hikes]. It will help consumers better understand why their rates are increasing and give them an opportunity to provide input to regulators when rate hikes are under review.”

While there’s been a fair amount of buzz about healthcare reform’s impact on children, patients with preexisting conditions, and even college kids, there are some uncertainties of reform’s role in Medicare.

According to Rick Ungar at Forbes, under the Affordable Care Act savings in Medicare will come from two main sources – a major clean-up of Medicare fraud which is currently costing the government up to $60 billion each year, and a stopper on funding to Medicare Advantage programs sold by private insurers.

It is the latter that has been the more controversial decision and it has opened the floodgates to speculation that Medicare Advantage programs will be weakened or cut, leaving senior citizens with gaping holes in essential aspects of their coverage. Already, Medicare Advantage government subsidies which have been in place since 2003 have been cut out as of 2010.

But there’s more to the issue than private Medicare Advantage programs being cut! Medicare Advantage typically offers free preventive care, fills the pharmaceutical donut hole, provides health club memberships, and sometimes dental and vision plans.

When reform kicked in last September, seniors were provided a yearly physical as well as all diagnostic tests totally free. This makes arguably the most important aspect of Medicare Advantage null. Now on to drug coverage— the donut hole is being slowly phased out, steadily becoming smaller until it is gone altogether in 2020, making another important component of Medicare Advantage irrelevant. While there will be a gap period between now and 2020, seniors will save more money simply buying pharmaceuticals as the need arises rather than paying for a monthly premium on Medicare Advantage. The same applies for dental and vision plans. Furthermore, as of 2009 Medicare Advantage premiums went up 15% to compensate for the 2010 cut off of the program’s subsidies.

Basic Medicare may not quite be replacing pricier Medicare Advantage, but it’s a step closer thanks to reform.

Related Link: Medicare Supplemental Insurance

The Wisconsin Association of Health Plans announced that many of the state's carriers will provide plan members with tools to estimate out-of-pocket costs before seeking treatment. Anthem Blue Cross Blue Shield, Humana, and UnitedHealthCare Wisconsin are among the 17 participating insurance carriers that will be rolling out this program by September 1. Association officials note that providing these estimates is becoming increasingly important as more people move to high deductible plans.

Consumerist has a useful item for health consumers about how to appeal denied insurance claims. After getting the exact reason for the denial, the industry expert suggests:

• Asking for a "1 time ‘pay and educate' exception," where the insurance company will pay for the claim on this one occasion.
• If the insurer says that the policy has an exclusion that prevents it from covering the expense, ask for the company to clearly point out the policy exclusion in writing.
• Work with your doctor and the office staff to collect evidence that you believe supports your position and present this evidence to your insurance company.

As the piece notes, following these steps and others listed in the piece can help consumers make sure they receive a fair hearing when interacting with their insurance companies.

California's Department of Managed Health Care has proposed rules that would prevent physicians from billing patients for additional charges beyond the costs of in-network care covered by insurance. Typically, billing disputes arise when patients go to in-network hospitals or emergency rooms for treatment but are inadvertently treated by an out-of-network physician who has not accepted the HMO's negotiated price. Physicians, in a process called balanced billing, can then directly bill the patient for the difference between the two fees.

According to the Los Angeles Times the department has been trying to work out a compromise between physician groups and HMOs on the issue for two years, but ultimately has proposed the rules to protect consumers from increased out-of-pocket spending. Under the proposal, consumers would not have to pay for any difference in billing. Instead, physician groups and insurance companies would have to resolve the disputes on their own.

Several insurance companies are placing restrictions on CT scans for policyholders and in many instances are requiring plan members to receive pre-authorizations before undergoing the scans. Insurers are following the lead of Medicare, which announced and then retracted restrictions on CT scans, due to limited clinical evidence supporting their use. At the time of Medicare's reversal, the New York Times noted that "The proposal to curtail payments met with fierce resistance from doctors who perform these scans and companies that make the equipment" who "strongly defended the scans." Medicare alone spent as much as $50 million on the scans in 2006, and in the past six years, their use has been increasing 13 percent annually.

Evidence in favor of their widespread use remains weak, however. A few months ago, Consumer Reports listed CT Scans as one of the ten most overused medical treatments in the United States. A month later, a group of researchers writing in the New England Journal of Medicine found that approximately one third of CT scans were unnecessary, exposing "perhaps 20 million adults and, crucially, more than 1 million children per year in the United States" to a radiation dose roughly equal to 85 to 200 chest x-rays.

The good news is that requiring pre-authorizations seems to work. According to a study by the Robert Wood Johnson Foundation's Center for Health System Change, a health plan that required pre-authorization of the scans successfully reduced the growth rate on scans while denying only 1.5 percent of scan requests. As one insurer said, "We're not saying ‘No' that much, but because people have to now justify what difference the test is going to make, they aren't requesting it as much."

Blue Cross Blue Shield of South Carolina has begun to seek partnerships with international hospitals in order to encourage policyholders to seek more cost-effective treatments abroad. The insurer has already established agreements with seven overseas hospitals and hopes to add another five within the year. Blue Cross officials are hoping that encouraging medical tourism for planned medical care will help control costs, since, as Business Week notes, "An insurance company could waive all deductibles and co-pays, offer to cover travel costs for the patient and family members, even throw in a cash incentive, and still save tens of thousands of dollars" without sacrificing quality.

Aetna has announced that it will be unveiling a set of online tools in August that combine personal health information with diagnostic tools to help plan members better understand their medical conditions. For example, the Wall Street Journal's health blog notes, a patient whose doctor had diagnosed him with a history of sinusitis would be told that a headache suggested sinus problems rather than something more serious, and would tools to let the user search for in-network ear, nose and throat doctors. Aetna's hope is that the tools, called SmartSource, will allow plan members to get more personalized information about their health status than they could find in standard online searches.