Oscar Releases New Plan Grids and Renewal Information

Oscar recently released their 2019 plan grids, which are identical for Columbus and Cleveland.

Oscar also released information about the renewal letters that will be sent to members later in October. Brokers will not receive a copy of the member’s renewal letter. Renewals will be a part of the individual book of business, which is set to launch within Broker Accounts next week.

Cleveland Clinic/Oscar Ohio Individual and Family Plans 2019

Oscar Ohio Individual and Family Plans 2019

For more information, contact your Cornerstone representative today.

ACA Risk Adjustment Program Restored

The Centers for Medicare & Medicaid Services (CMS) released a rule late Tuesday announcing restoration of the risk-adjustment program, ending the short-lived suspension announced earlier this month. The new rule addresses issuers concerns about insolvency or withdrawal from the markets.

Risk-adjustment payments of $10.4 billion will be released to insurers this fall for the 2017 plan year. The final rule keeps the same methodology for risk-adjustment transfers as previously outlined, using statewide premiums as part of the formula.

Read the final rule here.

CMS Releases Exchanges Trends Report

CMS recently released a report outlining the current condition of the operational and programmatic
aspects of the Exchanges.

Key Highlights:

  • For plan year 2018, 49,100 agents and brokers registered with Federal platform Exchanges, supporting 42 percent of overall enrollments.
  • The cost breakdown for registration/training, technical assistance, and oversight is $2.40 per enrollee.
  • The biggest concerns for agents and brokers are lack of competition in the individual market and availability of commissions from insurance carriers.
  • To date, CMS has implemented 93 percent of recommendations from our agent and broker partners

Click here to view the full Trend Report from CMS.

CMS to Suspend ACA Risk-Adjustment Payments

The Centers for Medicare & Medicaid Services announced that a months-old federal court ruling will force it to suspend risk-adjustment payments, worth about $10.4 billion for 2017. These payments are meant to help balance the insurance markets when some insurers had to take on sicker, more costly patients.

 

For more information, click here.

What’s Old is New Again: Recycling in the Individual Market

Luke Boemker

Luke Boemker | Director Enrollment Center/Business Development

The title of one of my favorite movies, Back to the Future, seems apropos when compared to today’s individual health insurance market. With the Affordable Care Act (ACA) being anything but affordable, many consumers are looking for alternative options to cover themselves and their families. Monthly ACA insurance premiums can cost more than an average mortgage payment so other options have to rise up from the grave to give consumers access to “affordable” health insurance.

Before ACA, we had medical underwriting, we had prescreens, we had limited coverage for maternity, and we had waiting periods on pre-ex. These are many of the reasons the ACA was created—to eliminate screening questions that were seen as unfair to a consumer with medical conditions. Granted, pre-ACA coverage was not the best either, but it was a fraction of the cost of current ACA coverage. Pre-ACA, networks were also much more extensive, with the majority of options today consisting of very limited HMO or EPO choices.

On April 2, 2018, the great state of Iowa made national news in their attempt to create Individual association-style plan offerings. The Iowa Farm Bureau is looking to recreate coverage options that consumers had before the ACA. However, according to a recent Washington Post article, such plans “sponsored by a nonprofit agricultural organization…shall be deemed not to be insurance.” Rates and coverage options have not yet been approved, but it is difficult to believe that there will not be some limitations that will make these plans available only to those on the healthier end of the spectrum.

The Back to the Future opportunity is twofold. On one hand, short-term plans are beginning to resemble pre-ACA coverage. If the laws change and allow short-term back to a nearly annual, renewable contract, this market will explode for the young, invincible, and healthy population.

However, there are tradeoffs with coverage options. Most short-term plans have PPO networks, which are significantly larger than what can be found with ACA plans. On the flip side, the coverage on the short-term plans is not as extensive as one might find in the ACA. Benefits are not as rich from a copay or medication standpoint and short-term plans do not usually cover maternity, which can be an issue for younger families. Anyone with medical conditions or significant health care needs may not qualify for short-term plan offerings, while ACA plans are guarantee issue.

Let’s look at a couple illustrations that show sample price comparisons for 21, 43, and 64-year-old non-smokers with short-term versus ACA options, using Franklin County (Columbus, OH) as the test case. These are the lowest prices available in which the out-of-pocket costs are closely aligned.

  Short Term* ACA**
Age Premium
21 $      84.73 $      355.47
43 $     106.16 $      482.38
64 $     284.53 $    1,066.41
*$2500 Deductible, 20% Co-Insurance, $7500 MOOP
**$2400 Deductible, 20% Co-Insurance, $7350 MOOP

A 21-year-old “invincible” can purchase a middle-of-the-road short-term plan for less than their monthly cell phone bill. A similar plan offering in the ACA would compare more closely to their monthly rent or car payment. The ACA plans are averaging four times more costly than short-term coverage options in nearly all age ranges. When you annualize the premium savings for a 64-year-old consumer, you see savings of over $9,000. For those on a fixed or limited income, this is necessary money in their pocket.

When looking at sample family rates of 35, 33, 6, and 4 year olds, the price difference is even more dramatic. ACA rates, without a subsidy, are approaching, and possibly even exceeding, what a family of four would pay for their monthly mortgage and escrow payment. The rate is almost five times more expensive for ACA versus short term.

Short Term* ACA**
Ages Premium
35, 33, 6, 4 $    333.00 $        1,592.04
*$4000 Family Deductible, 20% Co-Insurance, $12,000 Family MOOP
**$4000 Family Deductible, 20% Co-Insurance, $14,700 Family MOOP

With all things being equal, it is difficult to pass up the significant monthly savings of $1,259 dollars for the family of four. Annualized savings amount to more than $15,000.

With short-term medical and association-style options potentially becoming en vogue again, one has to wonder what will become of the ACA. With many national carriers having exited the Marketplace in a majority of states, and many states with only one or two carrier options, it appears the death spiral for ACA is in full effect. Limited competition creates higher rates; higher rates drive the healthy population into alternative options. When the healthy leave the Marketplace, all that remains are those with medical conditions or those who are receiving a substantial subsidy that offsets the majority of their ACA premium.

Consumers will make health care decisions based on how it impacts them the most: their pocket book. If they can qualify medically and achieve premium savings like what is outlined in the above illustrations, more and more will flock to short-term or association-style options, like those being proposed in Iowa and potentially other states in the near future.

Like the late, great Yankee’s catcher Yogi Berra once said, “It’s like deja vu all over again.”

Questions about short-term plans? Contact your Cornerstone representative today to learn more.

Transitional Policies for Non-ACA Compliant Plans to be Extended Through 2019

The Center for Consumer Information and Insurance Oversight (CCIIO) recently issued an Insurance Standards Bulletin that extends the CCIIO’s transitional policy through 2019, provided that all policies begin on or before October 1, 2019, and end by December 31, 2019.

As with previous transitional policies, this policy applies to non-grandfathered health insurance plans in the individual and small group markets that would otherwise terminate or require modification as a result of the federal health insurance market reforms required under the Patient Protection and Affordable Care Act (ACA).

For more information, click here.

CMS Releases HHS Notice of Benefit and Payment Parameters for 2019

CMS recently issued the HHS Notice of Benefit and Payment Parameters for 2019, generally for plan years beginning on or after January 1, 2019. The rule is designed to improve affordability for those with high premiums.

The rule includes provisions in the following key areas:

  • Essential Health Benefits (EHB)
  • Qualified Health Plan (QHP) Certification Standards
  • Exemptions
  • Risk Adjustment
  • Advance Premium Tax Credit (APTC) Program Integrity
  • Special Enrollment Periods (SEPs)
  • Medical Loss Ratio
  • Small Business Health Options Program (SHOP)
  • Rate Review

In addition, CMS has extended the transitional policy for one additional year, allowing for the transition to fully ACA-compliant coverage in the individual and small group Health Insurance Marketplaces until 2019.

Click here for more information or contact your Cornerstone representative.

 

ADDITIONAL RESOURCES

States face challenge in curbing premiums after stabilization package fails

CMS issues final 2019 Payment Notice Rule to increase access to affordable health plans for Americans suffering from high Obamacare premiums

Oscar Raises $165 Million for Technology and Expansion

Oscar Health has raised $165 million in new funding in a round led by Founders Fund, with participation from two branches of Google’s parent company Alphabet: the Capital G growth investment arm, and the Verily life sciences segment. The money was raised to invest in their technology platform and accelerate expansion.

Click here for more information.

 

ADDITIONAL RESOURCES

Oscar Health, Josh Kushner’s health insurance start-up, raises $165 million from Alphabet and others

Oscar Health Raises $165M For Multi-City Obamacare Expansion

Trump Administration Proposes Rule for Short-Term Health Plans

Under a proposed rule by the Trump administration released on Tuesday, insurers will again be able to sell short-term health insurance good for up to 12 months. This rule would allow short-term plans to add more choices to the market at a lower cost and could offer broader provider networks than ACA plans in rural areas.

Health and Human Services Secretary Alex Azar said, “We want to open up affordable alternatives to unaffordable Affordable Care Act policies.”

Here are some talking points regarding the rule:

  • 60 days to comment on the proposed rule before changes are made to the current rules
  • If approved, insurers may be able to sell short-term health insurance for up to 12 months
  • Comments also being sought to extend beyond 12 months and if there are ways to guarantee renewability of the plans
  • No changes to requirements for STM plans – subject to pre-ex and not held to ACA requirements/not ACA compliant, med questionnaire required, etc.

 

RESOURCES

Trump Administration Proposes Rule to Loosen Curbs on Short-Term Health Plans

Fact Sheet: Short-Term, Limited-Duration Insurance Proposed Rule

Click here to review the proposed rule

Proposed rule would loosen restrictions on short-term health plans

Narrowing Medicare “Doughnut Hole” Will Close In 2019

For Medicare Part D beneficiaries with high prescription drug expenses, the “Doughnut Hole” means they pay more for their medicine once costs reach a certain threshold. Narrowing each year since the Affordable Care Act was passed in 2010, the gap was scheduled to close in 2020. With the 2/16 budget deal, the doughnut hole will now close in 2019.

Read the full story here.