IBM's Watson technology will be used by WellPoint to help improve patient care and reduce costs. Watson will initially be used by nurses to review doctor treatment requests and manage patient cases. WellPoint believes Watson can process medical information quickly and help ensure patients receive the right care.

1. Einstein meet Watson!!
Remember Dr. Albert Einstein's famous quote "In the middle of every difficulty lies
opportunity"? We are seeing this unfold this week in healthcare with the introduction of the
Jeopardy -playing computer Watson which will be used to suggest patient care and
treatments. It was only a matter of time before we would see private sector entrepreneurs
making their mark on the fast changing, chaotic healthcare world. They did so yesterday when
insurer 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 reduce
costs. According to the Wall Street Journal, Watson will be introduced next year and will
initially be used by nurses who review treatment requests from doctors and manage patient
cases. WellPoint's Chief Medical Officer, Sam Nussbaum, says that the project is "not about
limiting care: it's about assuring the right care is given."
IBM claims the Watson technology can process about 200 million pages of content in less than
three seconds, how's that for a quick diagnosis? For more information click here....
I hope you find this month's newsletter helpful in staying abreast of legislative updates, market
trends, new technologies and strategies that will enhance your organization's financial
wellbeing. Our mission is to offer solutions that will control healthcare costs, increase the
perceived value of your benefit programs and improve the health, safety and productivity of
your employees.
Mike
ph: (708) 845-3126 • mike.wojcik@thehortongroup.com

2. Market Trends, Surveys and Strategies
The National Business Group on Health
A survey conducted by the National Business Group on Health, a trade group for large
organizations, projects 2012 health increases to be 7.2% above their 2011 costs which are
trending 7.4% above 2010 costs. Due to a multitude of challenges including the weak
economy, to address the rising cost, more than half of the companies surveyed said they'll
increase the percentage that employees contribute to premiums, while 39 percent said they'll
increase 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 from
fixed-rate co-pays to cost sharing models that require employees to pay a percentage of all
rising costs, "making certain employees have more reasons to be cost-sensitive health care
consumers," says Helen Darling, President and CEO of the National Business Group on
Health. To further the point, nearly three in four employers will offer employees at least one
consumer-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 employers
will cause most of their plans to become "Non-Grandfathered" under the Affordable Care Act. I
recall it was originally projected that within the first three years of the new law most plans will
convert to "Non-Grandfathered" status out of necessity to change benefits or cost sharing. It
appears we are running ahead of schedule.
Legislative Updates and Impacts
Michigan Lawmakers Approve 1% Tax on Health Care Claims
A story to watch....Business Insurance Magazine reports a new tax will take place in Michigan
on January 1, 2012 assessing health plans 1% on paid health care claims. The tax, intended
to help fund the state's Medicaid programs, would be paid quarterly starting April 30, 2012.
The tax would apply to fully insured and self-funded plans; however, exempt Medicare
Advantage plans Medicare prescription drug plans and plans covering federal employees. In
ph: (708) 845-3126 • mike.wojcik@thehortongroup.com

3. addition, the tax would not be assessed on services provided in Michigan to non-Michigan
residents.
The tax is expected to generate $400 million annually. Any amount over that would be
credited 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 federal
Employee Retirement Income Security Act, (ERISA). Specifically, ERISA preempts state
regulation, either directly or indirectly, of self-insured plans.
We will keep you posted on the outcome.
Update Healthcare Reform Timeline and Q&A Resources
Confusion still prevails from the many requirements of the Patient Protection and Affordable
Care Act (PPACA). Hundreds of pages in guidance poured out the past several months from
the 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). With
exception of the Voluntary Long-Term Care Insurance program- Class Act, which has yet to be
addressed, we are confident in the Timeline guidance.
For additional information please refer the Health Care Reform section of the Horton Group
website which includes an excellent Q&A section provided by the Council of Insurance Agents
and Brokers and their legal counsel, Steptoe & Johnson from Washington D.C. You can click
here for a copy of our last webinar presentation titled "Healthcare Reform Update".
CBO Expects Delay in Class Act
In its latest budget and economic outlook the Congressional Budget Office (CBO) projected the
Community Living Assistance Services and Supports Act (CLASS) will likely be delayed for
one year. The voluntary long term care insurance program designed as part of the Patient and
Protection Affordable Care Act originally was slated to start collecting premiums in
2012. Stakeholders still question as to whether the program will ultimately be able to sustain
itself. Officials in the Health and Human Services Department acknowledged concerns about
ph: (708) 845-3126 • mike.wojcik@thehortongroup.com

4. the CLASS program and said they're considering changes to ensure its
solvency.
Summary of Benefits and Coverage
Recently, 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 will
enable consumers to easily understand their health coverage and determine the best health
insurance options for themselves and their families. Likewise, these proposed rules will assist
employers in finding the best coverage for their business and their employees. Under the
proposed rules, health insurers and group health plans will provide consumers with clear,
consistent and comparable information about their health plan benefits and coverage. Please
click 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 not
required to do anything. However if you would like to read more please click on the links
below.
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 fully
insured plans and HMO, the insurer is responsible for producing and distributing the
summaries. For self-insured plans, the responsibility lies with the employer. The SBC is a
required 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 or
after March 23, 2012. The penalty for 'willful' non-compliance is up to $1,000 per enrollee for
each failure to comply.
ph: (708) 845-3126 • mike.wojcik@thehortongroup.com

5. What does the proposed rule require?
The SBC is a required document that must be provided in the standard format. Summaries
are required when employees first become eligible and again 30 days prior to reissuance or
renewal and may be delivered in paper and/or electronic format. There are four standard
components:
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 where
individuals can get additional information including documents such as a certificate, summary
plan 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 News
Hospitals Shift Rising Healthcare Costs to Insurers
As healthcare costs continue to rise, hospitals and providers are likely to shift more of those
costs onto private insurers, a trend identified by the latest Healthcare Economic Indices
release by Standard & Poor's.
The average cost of healthcare services covered by private insurance companies increased by
7.48% for the year ending June 2011. By comparison, the average cost of services covered
by 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. Ultimately
these costs are passed along to employers, who then pass them along to workers through
plans, through higher deductibles, coinsurance and premium sharing. Another trend will be a
move away from co-pays.
ph: (708) 845-3126 • mike.wojcik@thehortongroup.com

6. As the battle to lower Medicare reimbursements to providers and hospitals continues under
healthcare 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 curb
expenses. Telemedicine which includes telecare and telemonitoring might offer greater
access to specialists in a timely manner, according to a July 2011 article in the magazine
RT: For Decision Makers in Respiratory Care. "Telemedicine represents an exciting shift in
the delivery of health care, a shift that will transition patient care from the physician's office or
clinic into the patient's 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 of
chronic disease. Demand for health care is on the rise and increasing at an uncontrollable
rate. Today there is a supply and demand problem facing health care - supply of health care
workers is down and is projected to remain until about the year 2030. This warrants a change
in 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 rural
populations using technology in the field of both health care and communications. Read
further.
Human Resource Center
Healthcare Online Trends
Lucky Timing?
There is strong movement from providers and payers to expand Web-based and other
electronic solutions to increase efficiencies. At the same time healthcare consumers are using
online 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%. With
recent advances, it is becoming common for members to obtain physician information, lab and
test results, make appointments, pay bills and even communicate with providers online. The
Thomas Reuters 2010 Pulse Healthcare Survey shows that although there is room for
ph: (708) 845-3126 • mike.wojcik@thehortongroup.com

7. improvement, the number of users and services are growing at a fast pace. Click here for
more information.
Wellness Initiatives
Immunizations
Every year the Centers for Disease Control and Prevention (CDC) and other expert panels
release new recommendations for immunization schedules for childhood and adult. According
to the Association of State and Territorial Health Officials, every $1 spent on immunizations
saves $16. For more information, click here.
Confused about which vaccinations to get this fall? In review of the topic I found a very
informative publication provided by United Healthcare titled "Immunizations". It can serve as a
useful 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 plan
description for details.
Childhood Obesity- Is it an Employers Responsibility?
Difficult financial times have many employers reconsidering corporate programs geared toward
promoting healthier employees and families. This is contrary to the fact we know that future
healthcare 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 or
overweight. Two thirds of children and teens do not meet daily exercise guidelines and 10%
ph: (708) 845-3126 • mike.wojcik@thehortongroup.com

8. do not participate in any physical activity at all. Additionally, 80% fail to meet daily fruit and
vegetable consumption guidelines. In addition, an obese teenager has a 70% chance of
becoming 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 that
could become unaffordable if changes aren't made.
The National Business Group on Health produced a toolkit in response to these trends
"Childhood Obesity. It's Everyone's Business" is linked here. Their goal is to provide
employers with a range of options that can be implemented relatively easily to combat this
growing problem.
Horton Webinars & Seminars (Reminders)
Upcoming Horton Events.... Read More
ph: (708) 845-3126 • mike.wojcik@thehortongroup.com