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HEALTH INSURANCE OPEN ENROLLMENT UPDATE

By: Nicola Heredia, CHS Marketing Coordinator

On November 1, the health insurance open enrollment period began. Insurance providers were required to release their 2016 rates, allowing Americans to officially begin shopping and comparing insurance plans.

Studies show that individuals can expect to see an increase in medical costs in the upcoming year. According to a 2016 Segal Health Plan Trend Cost Survey, high deductible and Preferred Provider Organization plans will rise about 8 percent. In addition, the survey expects that prescriptions will almost double in cost.

“With deductibles rising so much faster then premiums and wages, it’s no surprise that consumers have not felt the slowdown in health spending,” said Drew Altman, president and CEO of the Kaiser Family Foundation, in a press release.

Rates, coverage options, deductibles and out-of-pocket costs are all subject to increase and change annually, making it important for individuals to be aware of the changes. Whether enrolled in an employer-sponsored plan or marketplace plan, it is necessary to evaluate if the current coverage is still the best option for the upcoming year.

Insurance Marketplace Expectations

Similar to 2015, Americans who refuse to sign up for insurance plans will face a federal penalty when they file their annual taxes. The fine, however, will increase to $695 or 2.5 percent of an individual’s modified adjusted gross income.

One of the biggest unknowns going into this enrollment period is whether or not the fine increase will motivate more uninsured Americans into signing up for insurance through their employers or the insurance marketplace.

“The reality is we continue to see more people signing up for health insurance and more issuers entering the marketplaces, and at the end of January, we believe we’ll be looking at another successful open enrollment – just like the last two,” said Ben Wakana, a spokesman for the U.S. Department of Health and Human Services, in a USA Today article.

Healthcare.gov released results from the first week of enrollment, which saw more than 540,000 consumers selecting a plan. This is an increase of 17 percent compared to the first week of open enrollment last year. According to the Congressional Budget Office, the government expects that by the end of 2016, there will be 10 million Americans enrolled with paid premiums.

Employer-Based Insurance Trends

According to a survey conducted by ConnectedHealth, more than half the employees that participated believed that selecting an insurance plan is more difficult than solving a Rubik’s Cube.

“It’s easy for employees to look primarily at premium costs, but they also need to look at other charges,” said Julie Stitch, director of research at the International Foundation of Employee Benefits Plans, in a Forbes article. “And double check to make sure your current health care provider remains in your plan, because these lists change.”

When it comes to selecting the most suitable plan, experts encourage the public to take a look at their existing coverage to determine if it still fits their needs.  Sticking to the same plan could result in financial loss, in addition to inefficient health care coverage.

“During open enrollment season, be sure to carefully review what your insurance plan offers – the formulary (what drugs are covered in what tier), deductibles, copays and coinsurances,” said Elisabeth Russell, a patient advocate and president of Patient Navigator, LLC, in a LearnVest article. “Scrutinize what the different plans offer. And think not only about what medications your family needs now but what you might anticipate in the coming year.”

Essential Steps to Take During Enrollment Period

  1. Analyze current costs in total to be able to compare to new plans.
  2. Determine what options are available, such as FSA or HSAs, that could financially help.
  3. Spend time researching plans and compare with existing coverage. Healthcare.gov shows that individuals that switch plans save $500 annually.
  4. Look at plans that would allow you to save money, while also keeping the same provider.
  5. Being under 30, a pregnant woman or a U.S. military veteran of any age can come with financial benefits, so make sure to seek out exceptions that can help save money.
  6. Make insurance decision by December 15 in order to avoid any lapse in coverage, which could result in a fine.

UNITEDHEALTH THREATENS TO PULL PLANS FROM ACA EXCHANGES IN 2017

By: Nicola Heredia, CHS Marketing Coordinator

UnitedHealth, the nation’s largest health care insurer, made an announcement that they are considering pulling their plans from the Obamacare marketplaces in 2017 if the plans are not profitable in the upcoming year. The revelation comes as a result of the company facing a substantial profit loss due to policies sold on the Affordable Care Act’s exchanges.

“We cannot sustain these losses,” said UnitedHealth’s CEO Stephen Hemsley on a call with investors as reported in a Wall Street Journal article.  “We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself.”

Some industry leaders site that UnitedHealth has had trouble with enrollment since they decided to sit out the first year that the exchanges were open to the public, which may have slowed their expected enrollment numbers. However, UnitedHealth may be the first threatening to pull out of ACA exchanges altogether, but other insurance companies have faced similar obstacles in this arena.

“The exchange business is not profitable, “ said Aetna CFO Shawn Guertin at a Credit Suisse earlier this year as reported in a CT Mirror article. “I do think we can make an improvement in the business.”

When companies first assembled plans to be offered through the insurance marketplace, they had no data to refer to. Although the government provided limited predictions for insurance companies to base their policies off of, the fact is that enrollment numbers have fallen short.

The marketplace itself has failed to capture relatively healthy individuals that were supposed to offset more costly, chronically ill participants. Due to a low rate of healthy enrollees, insurance companies have been forced to increase rates in order to avoid costly financial losses.

“If there are no changes, all the large publicly traded companies will end up leaving,” said Ana Gupte, Leerink Partners analyst, in a Health Care Payer News article. “But I would be very surprised if HHS doesn’t so something to accommodate their issues.”

Although the government may be limited in what it can do, experts believe that accommodations can be made without congressional action.

In a Health Care Payer News article, analysts report that adjusting regulations will allow insurers more flexibility to create plans that draw healthy individuals to the marketplace. Removing exemptions that allow people to sign up outside of the open enrollment period can also help turn the insurance exchange business around.

Data shows that throughout the year, healthy individuals tend to drop out of insurance policies, while the unhealthy sign up. UnitedHealth’s threat to pull their plans from the exchanges highlight the fact that there is a need for a more diverse participant base, particularly lacking in healthy enrollees.

“It matters more for what it says about what industry as a whole thinks about Obamacare,” said Kaiser Family Foundation Senior Vice President Larry Levitt in a USA Today article. “If they exited, it wouldn’t matter that much to the functioning of the ACA, but it would show why increasing enrollment is so important. The market is not yet profitable for insurers, but it could become profitable if enrollment grows.”

It goes without saying that the UnitedHealth announcement does not come at the best time since open enrollment for 2016 is currently underway. The Department of Health and Human Services, HHS, remains optimistic about increasing enrollment and denies that the insurance company potentially removing their plans will have a negative effect on the insurance exchanges.

“This year, people looking for coverage in the Marketplace continue to have a robust number of plan choices and as the data shows the Marketplace is sable, vibrant and a growing source of coverage for new consumers,” said Ben Wakana, a spokesman for the HHS in a USA Today article. “Today’s statement by one issuer is not indicative of the Marketplace’s strength and viability.”

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