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Healthcare Reform 2011: The Good, the bad and the ugly
Healthcare Reform 2011: The Good, the bad and the ugly
Healthcare Reform 2011: The Good, the bad and the ugly
Healthcare Reform 2011: The Good, the bad and the ugly
Healthcare Reform 2011: The Good, the bad and the ugly
Healthcare Reform 2011: The Good, the bad and the ugly
Healthcare Reform 2011: The Good, the bad and the ugly
Healthcare Reform 2011: The Good, the bad and the ugly
Healthcare Reform 2011: The Good, the bad and the ugly
Healthcare Reform 2011: The Good, the bad and the ugly
Healthcare Reform 2011: The Good, the bad and the ugly
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Healthcare Reform 2011: The Good, the bad and the ugly


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Interpreting these new laws and regulations are complex but their affect on insurers, employers, medical professionals, and patients is even more confusing. Join HOW for a unique look at these changes …

Interpreting these new laws and regulations are complex but their affect on insurers, employers, medical professionals, and patients is even more confusing. Join HOW for a unique look at these changes and their influence on healthcare decisions for the coming years.

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  • Intro Welcome to today’s webinar: Health Care Trends and Employers: New Strategies for a Changing Marketplace. This event is being sponsored by Health Options Worldwide, a healthcare IT company that provides a tailored network of global medical facilities to employers and insurers.   My name is Chris Peterson, vice president of sales at Health Options Worldwide.     During the webinar I encourage you to ask questions via the chat feature on your screen. I will do my best to answer all of these questions prior to conclusion. I anticipate this event lasting 30 minutes. I know we all have busy schedules and I hope you all find the discussion beneficial. Webinar technology is amazing isn’t it? We have over 100 attendees from around the world joining us today which is fantastic. It’s a good thing we are on the call together today…Healthcare is changing and the companies that understand and take advantage of the latest trends in HC will reduce costs and have healthier and happier employees. Click
  • Looking at this agenda my goal is to provide each of you with a better understanding of which statistics are directly impacting healthcare and what all of this means to employers. Once we are clear on some of the trends, we will talk about the solutions employers are adopting to counteract many of these negative forces And as Matt mentioned please send us any questions and we will do our best to get to them at the end of the presentation. Transition: So lets jump right in and get a grasp of our current healthcare situation with some statistics.
  • We’re all familiar with health care and the statistics, but I can’t get over these figures. Isn’t it amazing, in the U.S., we spend more than 50% on HC than any other country in the world. In fact, at $3.0T/yr, we spend more money on HC than the ENTIRE GDP of France. For every 1$ spent in the U.S. economy, 16 cents goes toward HC. HC costs are increasing at 8%/year…more than TWICE the Consumer Price Index…which is why Total HC spending will CONSUME about 20% of our economy within the next 6-7 years. Many people we work with at HOW either work for employers directly or represent an employer’s group. They have seen it first hand, with employer’s costs increasing 80% since 2001, which is why many employers have either lowered plan benefits, eliminated coverage altogether, OR , are looking for better cost solutions. Another group who is experiencing dramatic rate increases are employees, who are struggling to keep up. Not only have their out of pocket expenses qruadrupled over the past 5 years, but for many of them they have also lost many covered procedures. Transition : Its easy to see that employers and employees are hurting, and costs are only going to increase. That’s not good. In order to better understand where our health care dollars are being spent lets take a look at a breakdown
  • The topic you have all been waiting for…HC Reform…its on everyones mind and we are all asking the same question…what is going to happen? The answer is…we don’t know exactly, but we have a pretty good idea. Costs Will Rise. Now, we could spend the entire day discussing the Reform Bill, for this webinar’s purpose, we simply want to highlight a few mandates and examples that will become important to employers. Now, The goal of HC Reform was to insure more Americans and increase their benefits. However, if you examine the new legislation and look at the mandates, it will also increase their premiums. For example, let’s take a look at the Elimination of Annual & Lifetime Limits & the Waiving of pre-existing Conditions, it’s great for patients but not so great for insurance companies: The way insurance companies work, which I’m sure most of you already know, is that they pool together premiums that can someday pay for claims. Take car insurance for example, I pay my premiums every month, and if I ever get into an accident, there’s enough money built up in the reserves from my payments and everyone else’s payments for the insurance company to pay my bills. The problem with the new Reform Bill, is that people will be able to opt in and out at will. Yes, they’ll have to pay a fine if they aren’t covered, but that fine will be minimal compared to the cost of premiums. Example : If I’m a good driver with no accidents in the last year, but my sister is a bad driver with 5 accidents, the new law says that we have to be charged the same premium. In order for the insurance company to stay in business, they’ll have to raise my rates to equal my sisters high risk To make matters worse, my sister could continue to opt out of the insurance pool while she’s not getting into car accidents and then jump back in when she needs the insurance and then out again – granted, in the car insurance world a person’s rates will go up if they have accidents and traffic violations – in the Reform Bill, I will pay the same as my sister even though she is a bigger health risk. Financially and economically speaking, there are no rewards for people to make themselves healthier. By the way, while we’re talking about mandating coverage, car insurance is required in all but 2 states…..yet 15% of drivers drive without auto insurance…. Taking it one step further, the new law states the sick cannot be charged more than the healthy. Said differently, the healthy will have to subsidize the sick. Medical Loss Ratios - Click DG: As I’m sure most of you have noticed, the Health & Human Services Dept (HHS) calls for insurance companies to spend at least 80 cents of the premium dollar on medical care and quality. Insurers that fall short of the mark will have to issue their customers a rebate. Part of the new health care law, the MLR rule is meant to give consumers a better deal. The idea behind it was to prevent insurers from wasting premiums on administration, marketing and executive bonuses. However, many insurance companies, especially the smaller ones won’t be able to remain in business under those margins. In fact, we’ve already seen some carriers close their doors as a result, leaving many people without health coverage. McDonald’s, Universities, and other mini-med plans were given a 1 year waiver from the HHS because their collapse would’ve resulted in a few million people losing their entire health coverage. As we all know, simple economics teaches us that with less competition in a market (in this case the insurance market) prices tend to go up, not down. Online Healthcare Exchanges - Click Through the new law a large group – perhaps as many as 16 million uninsured Americans – will get access to private health insurance plans they currently can’t get or can’t afford. As of 2014, each state will have to set up an online insurance exchange. The new law says that each exchange should offer 5 different levels of coverage plans in manner that is easy for consumers to understand. In 2014, employers that choose to drop coverage will pay a fine, and direct employees to the online exchanges where they will comparison shop for their healthcare needs. Now, Insurance companies are not going away…Insurers will be providing plans for the exchanges, but at drastically reduced rates, while having to comply with a lot of regulations. Insurers don’t want employers dropping coverage. They can make more money selling ER sponsored group plans and other offerings in the open market. Because of this, insurers are going to need to be more transparent, more friendly, and provide greater value or employees are going to demand their employer drop existing plans so they can go to the exchanges! To sum up, Healthcare Reform will result in costs rising because of 16 million newly insured and because of MLR’s - in the short term at least. The online exchanges however, should end up making costs lower over the long term. Transition: Many of these mandates are causing changes with healthcare providers that are interesting for employers to understand
  • About 60 percent of Americans under 65 get health insurance through an employer -- about 157 million adults. Of that, about 100M people have their health insurance through a self-funded ER, which, since they’re paying most, if not all of the medical bill, need to find ways to cut HC costs. Because of this, high deductible plans with employer supplemented HRA’s are becoming more popular. Here’s a fairly new wrinkle on self-funding – in an effort to reduce costs and incent EE’s to be more healthy, some ER’s are even tying the amount of HRA supplement offered to an employee based on participation in company sponsored wellness program. Another interesting trend we’re seeing amongst employers, as a result of the new HC legislation, is that many companies are considering dropping coverage for their employees, and instead, providing them with subsidies for them to buy insurance through the new exchanges. One company in particular that looked into this, which I’m sure many of you have heard of is AT&T. With the new healthcare law, it will cost AT&T around $2.2billion/year to insure their employees If they eliminated coverage and paid the government fines, they’d pay $600 million/year They would SAVE $1.8billion/year by eliminating employee health insurance While AT&T considers dropping coverage, Hannaford Brothers, a New England Supermarket Chain with 18k EEs, made an agreement to send employees to a Nengland Hospital for joint replacements EE’s have no out-of-pocket expenses & Hannaford covers any travel expenses They estimate it reduces costs by at least 20%/procedure Transition: What I’m hearing from many different sources, is most companies will not drop coverage and send employees to the exchanges for a number of reasons, but most companies WILL seek alternative solutions to keep costs down and increase the overall health of employee populations. One of the areas getting the most attention are preventative health solutions – but with a new focus on technology.
  • Transcript

    • 1. The good, the bad and the ugly Healthcare Reform in 2011: Presented by Health Options Worldwide
    • 2.  
    • 3. Health Care Reform Current Issues
      • Implementation will occur in three waves
        • 2010
        • 2011-2013
        • 2014 +
      • Court Cases
        • 26 states have filed suit
        • Equal protection under the law
        • Commandeering
      • House repeal- What’s it mean
        • Ongoing debate
    • 4.  
    • 5. New Changes in Healthcare Reform
      • National Coverage Requirement (2014)
        • Pros
          • Access to health insurance
          • Ability to change jobs
          • Open competition and increased transparency
        • Cons
          • Effects on computer systems
          • Federal money disappears (2014)
          • Different states, different rules
          • Fines and penalties
            • Year 1: $95
            • Either $695 or 2.5% of a person’s income
    • 6.
      • End of preexisting conditions
        • Initially only applies to children
        • Extended to adults (2014)
      • FSAs/HSAs/HRAs
        • Over the counter medications
        • 20% tax penalty
        • Maximum contributions of $2,500 to FSA (2013)
      New Changes in Healthcare Reform (Cont)
    • 7. 2011-2018: Employers are Going to Feel the Impacts of Healthcare Reform
    • 8. Implications for Employers
      • Coverage for dependents up to 26 years old
      • 1099 tax provisions for employers
        • Transactions of $600 +
        • Why hasn’t this been repealed?
        • $17Billion-$19 Billion
      • Tax credits for small businesses
        • Form 8941
        • Eligibility requirements
          • Average annual wages under $50,000
          • Less than 25 full time employees
          • Employers must cover at least 50% of the cost
    • 9.
      • W-2 requirements of value of health benefits
        • Cadillac Taxes
          • $10,200 per individual or $27,500 for families
          • 40% excise tax
          • Verizon: $255 million per year
      • Pay or Play: employers with 50+ employees
          • Fines
          • Full time employee?
          • Affordable?
          • Employer must pay 60%+
          • Employees that use exchanges: $250 fine
      Implications for Employers (Cont)
    • 10. Implications for Employers (Cont)
      • AT&T
        • Savings of $1.8B
        • “ 87% think they will continue to offer health care benefits because they are critical to employee recruitment, retention and remaining competitive.” –IFEBP
        • “ Nearly 65% of the largest employers strongly disagree that it would be better to pay fines.” – Workforce
        • “ 45% would drop coverage or consider options based on other employers’ actions” – Hewitt
      • Ongoing Debate and evolution of health coverage during next decade
    • 11. Question & Answer
      • For additional information:
      • Phone: 1-877-234-1345
      • Email: [email_address]