September Newsletter


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September Newsletter

  1. 1. Einstein meet Watson!!Remember Dr. Albert Einsteins famous quote "In the middle of every difficulty liesopportunity"? We are seeing this unfold this week in healthcare with the introduction of theJeopardy -playing computer Watson which will be used to suggest patient care andtreatments. It was only a matter of time before we would see private sector entrepreneursmaking their mark on the fast changing, chaotic healthcare world. They did so yesterday wheninsurer WellPoint signed an agreement with IBM to use their Watson technology.WellPoint believes the technology will help improve the quality of patient care and help reducecosts. According to the Wall Street Journal, Watson will be introduced next year and willinitially be used by nurses who review treatment requests from doctors and manage patientcases. WellPoints Chief Medical Officer, Sam Nussbaum, says that the project is "not aboutlimiting care: its about assuring the right care is given."IBM claims the Watson technology can process about 200 million pages of content in less thanthree seconds, hows that for a quick diagnosis? For more information click here....I hope you find this months newsletter helpful in staying abreast of legislative updates, markettrends, new technologies and strategies that will enhance your organizations financialwellbeing. Our mission is to offer solutions that will control healthcare costs, increase theperceived value of your benefit programs and improve the health, safety and productivity ofyour employees.Mike ph: (708) 845-3126 •
  2. 2. Market Trends, Surveys and StrategiesThe National Business Group on HealthA survey conducted by the National Business Group on Health, a trade group for largeorganizations, projects 2012 health increases to be 7.2% above their 2011 costs which aretrending 7.4% above 2010 costs. Due to a multitude of challenges including the weakeconomy, to address the rising cost, more than half of the companies surveyed said theyllincrease the percentage that employees contribute to premiums, while 39 percent said theyllincrease deductibles for workers who stay in-network for their healthcare.In addition it is expected out-of-pocket maximums will rise and plans will move away fromfixed-rate co-pays to cost sharing models that require employees to pay a percentage of allrising costs, "making certain employees have more reasons to be cost-sensitive health careconsumers," says Helen Darling, President and CEO of the National Business Group onHealth. To further the point, nearly three in four employers will offer employees at least oneconsumer-directed health plan (CDHP) in 2012 up from 61% in 2011.On a side note, if they have not done so already, the changes projected by these employerswill cause most of their plans to become "Non-Grandfathered" under the Affordable Care Act. Irecall it was originally projected that within the first three years of the new law most plans willconvert to "Non-Grandfathered" status out of necessity to change benefits or cost sharing. Itappears we are running ahead of schedule.Legislative Updates and ImpactsMichigan Lawmakers Approve 1% Tax on Health Care ClaimsA story to watch....Business Insurance Magazine reports a new tax will take place in Michiganon January 1, 2012 assessing health plans 1% on paid health care claims. The tax, intendedto help fund the states Medicaid programs, would be paid quarterly starting April 30, 2012.The tax would apply to fully insured and self-funded plans; however, exempt MedicareAdvantage plans Medicare prescription drug plans and plans covering federal employees. In ph: (708) 845-3126 •
  3. 3. addition, the tax would not be assessed on services provided in Michigan to non-Michiganresidents.The tax is expected to generate $400 million annually. Any amount over that would becredited to the plans assessments the following year.Gov. Rick Snyder is expected to sign the bill but may face a legal battle threatened by the Self-Insurance Institute of America who notes such measures are pre-empted by the federalEmployee Retirement Income Security Act, (ERISA). Specifically, ERISA preempts stateregulation, either directly or indirectly, of self-insured plans.We will keep you posted on the outcome.Update Healthcare Reform Timeline and Q&A ResourcesConfusion still prevails from the many requirements of the Patient Protection and AffordableCare Act (PPACA). Hundreds of pages in guidance poured out the past several months fromthe Department of Health and Human Services and the interpretation is not always clear.Please find a most recent Health Care Reform timeline for your reference (click here). Withexception of the Voluntary Long-Term Care Insurance program- Class Act, which has yet to beaddressed, we are confident in the Timeline guidance.For additional information please refer the Health Care Reform section of the Horton Groupwebsite which includes an excellent Q&A section provided by the Council of Insurance Agentsand Brokers and their legal counsel, Steptoe & Johnson from Washington D.C. You can clickhere for a copy of our last webinar presentation titled "Healthcare Reform Update".CBO Expects Delay in Class ActIn its latest budget and economic outlook the Congressional Budget Office (CBO) projected theCommunity Living Assistance Services and Supports Act (CLASS) will likely be delayed forone year. The voluntary long term care insurance program designed as part of the Patient andProtection Affordable Care Act originally was slated to start collecting premiums in2012. Stakeholders still question as to whether the program will ultimately be able to sustainitself. Officials in the Health and Human Services Department acknowledged concerns about ph: (708) 845-3126 •
  4. 4. the CLASS program and said theyre considering changes to ensure itssolvency.Summary of Benefits and CoverageRecently, The Department of Health and Human Services (HHS), Department of Labor (DOL),and the U.S. Treasury Department proposed new rules under the Affordable Care Act that willenable consumers to easily understand their health coverage and determine the best healthinsurance options for themselves and their families. Likewise, these proposed rules will assistemployers in finding the best coverage for their business and their employees. Under theproposed rules, health insurers and group health plans will provide consumers with clear,consistent and comparable information about their health plan benefits and coverage. Pleaseclick here to read the entire news release.The proposed rule will not impact your health plan until next year, so at this time you are notrequired to do anything. However if you would like to read more please click on the linksbelow.Who must comply?Insurers and self-insured employers will need to provide a Summary of Benefits and Coverage(referred to as a SBC) to individuals who apply for and enroll in medical plans. For fullyinsured plans and HMO, the insurer is responsible for producing and distributing thesummaries. For self-insured plans, the responsibility lies with the employer. The SBC is arequired document that must be provided in the standard format.When must you comply?The proposed summary must be provided to all individuals enrolling in a medical plan on orafter March 23, 2012. The penalty for willful non-compliance is up to $1,000 per enrollee foreach failure to comply. ph: (708) 845-3126 •
  5. 5. What does the proposed rule require?The SBC is a required document that must be provided in the standard format. Summariesare required when employees first become eligible and again 30 days prior to reissuance orrenewal and may be delivered in paper and/or electronic format. There are four standardcomponents:A four-page, double-sided Benefit Summary Coverage examples which must include three pre-defined medical scenarios: Maternity, Breast Cancer Treatment and Managing Diabetes.Standard Glossary of medical and insurance terms, a phone number and website whereindividuals can get additional information including documents such as a certificate, summaryplan descriptions (SPDs) and policies.More information about the proposed regulation is available by clicking here.To view the proposed template for the Summary of Benefits and Coverage, click here.Other technical information is available by clicking here.Insurance Carriers and Healthcare Providers In The NewsHospitals Shift Rising Healthcare Costs to InsurersAs healthcare costs continue to rise, hospitals and providers are likely to shift more of thosecosts onto private insurers, a trend identified by the latest Healthcare Economic Indicesrelease by Standard & Poors.The average cost of healthcare services covered by private insurance companies increased by7.48% for the year ending June 2011. By comparison, the average cost of services coveredby Medicare increased on 2.5% for the same time period.We have seen the cost shift from Medicare to the private market for some time. Ultimatelythese costs are passed along to employers, who then pass them along to workers throughplans, through higher deductibles, coinsurance and premium sharing. Another trend will be amove away from co-pays. ph: (708) 845-3126 •
  6. 6. As the battle to lower Medicare reimbursements to providers and hospitals continues underhealthcare reform, this will warrant more watching. For more information click here......Telemedicine - The Answer to Physician Shortage and Cost Control?Hospitals and health systems are exploring ways to get providers to curbexpenses. Telemedicine which includes telecare and telemonitoring might offer greateraccess to specialists in a timely manner, according to a July 2011 article in the magazineRT: For Decision Makers in Respiratory Care. "Telemedicine represents an exciting shift inthe delivery of health care, a shift that will transition patient care from the physicians office orclinic into the patients home". It will allow urban providers to reach rural areas.In the United States alone, 78% of health care costs are associated with the treatment ofchronic disease. Demand for health care is on the rise and increasing at an uncontrollablerate. Today there is a supply and demand problem facing health care - supply of health careworkers is down and is projected to remain until about the year 2030. This warrants a changein the delivery system and the way individuals and populations receive health care.Telemedicine holds the promise of being able to provide services to urban and ruralpopulations using technology in the field of both health care and communications. Readfurther.Human Resource CenterHealthcare Online TrendsLucky Timing?There is strong movement from providers and payers to expand Web-based and otherelectronic solutions to increase efficiencies. At the same time healthcare consumers are usingonline platforms to increase their plan knowledge and to handle more of their medical needs.Most Americans (77.6%) have access to the Internet, in Illinois that number is at 74.2%. Withrecent advances, it is becoming common for members to obtain physician information, lab andtest results, make appointments, pay bills and even communicate with providers online. TheThomas Reuters 2010 Pulse Healthcare Survey shows that although there is room for ph: (708) 845-3126 •
  7. 7. improvement, the number of users and services are growing at a fast pace. Click here formore information.Wellness InitiativesImmunizations Every year the Centers for Disease Control and Prevention (CDC) and other expert panelsrelease new recommendations for immunization schedules for childhood and adult. Accordingto the Association of State and Territorial Health Officials, every $1 spent on immunizationssaves $16. For more information, click here.Confused about which vaccinations to get this fall? In review of the topic I found a veryinformative publication provided by United Healthcare titled "Immunizations". It can serve as auseful guide for employees to share with their doctors. For the full article click here.Topics include: 1. Unfounded Vaccine Fears 2. Vaccinations for Flu Season 3. Immunizations for Adults - including a CDC chart detailing immunization schedules. 4. Immunization for Children - including CDC charts detailing immunization schedules.Keep in mind under the Affordable Care Act, if your plan is considered Non-Grandfathered,many of these preventive services can be covered at 100% - check your summary plandescription for details.Childhood Obesity- Is it an Employers Responsibility?Difficult financial times have many employers reconsidering corporate programs geared towardpromoting healthier employees and families. This is contrary to the fact we know that futurehealthcare cost trends will be driven by employee and dependent risk profiles.This comes at a time when we learn more than one third of children age 2-19 are obese oroverweight. Two thirds of children and teens do not meet daily exercise guidelines and 10% ph: (708) 845-3126 •
  8. 8. do not participate in any physical activity at all. Additionally, 80% fail to meet daily fruit andvegetable consumption guidelines. In addition, an obese teenager has a 70% chance ofbecoming an obese adult. It is also predicted most of these children will become diabetic.Care for obesity related diseases currently costs employers $150 billion annually, a price thatcould become unaffordable if changes arent made.The National Business Group on Health produced a toolkit in response to these trends"Childhood Obesity. Its Everyones Business" is linked here. Their goal is to provideemployers with a range of options that can be implemented relatively easily to combat thisgrowing problem.Horton Webinars & Seminars (Reminders) Upcoming Horton Events.... Read More ph: (708) 845-3126 •