Author: Lucien Wulsin

Flat Premiums for Employment-Based Coverage

The Kaiser Family Foundation/Health Research and Educational Trust reports on its study on employment based coverage in 2014. Premiums for individual coverage are essentially flat – a 2% increase and premiums for family coverage are up by 3%. The employee shares of premiums are unchanged – 18% for individual coverage and 29% for family coverage. Cost sharing (i.e. copays, co-insurance and deductibles) is unchanged. The percentages of employers offering (55%) and the percentage of employees taking up their employers offer were unchanged. Only 25% of employers offer retiree health benefits – a figure that is also unchanged.

There are some changes at the margins. Twenty three percent of large employers reduced their waiting periods for coverage of new workers and 10% of small employers reduced their waiting periods. Six percent of large employers made more of their workers eligible for coverage while 2% made fewer workers eligible; the rest made no changes.

For the coming year, employers may be looking to narrower and or tiered networks of higher performing providers, tiers for generic or preferred drugs, risk assessments and employee wellness programs, private Exchanges for their employees, and public Exchanges for their retirees. A few (less than 10%) will not cover spouses if they have an offer of coverage from their own employer.

Thoughts On Financing Care And Coverage For Those Who Are Uninsured and Ineligible for Covered California and Full Scope Medi-Cal Due To Their Immigration Status

At least half of California’s undocumented residents are uninsured, while the others are covered through their employers, and to a lesser degree, through state limited benefit programs. The undocumented are ineligible for Covered California, and eligible only for limited scope Medi-Cal that covers genuine emergencies and maternity care. This report examines alternatives to covering and caring for the undocumented in California.

The challenge for California is to assure care to an undocumented working population that is not evenly distributed throughout the state, but rather most heavily concentrated in the Central Valley, the Central Coast and Southern California counties. There are several approaches to financing care and coverage for the undocumented. First, their care could be covered by California’s county safety nets. Second, they could be covered by the state of California. Third, they could be covered by their employers or by private individually purchased coverage. Fourth, their care could be partially funded by the federal government. Lastly, we could consider hybrid programs and shared responsibility.

Download the brief here.


Newsflash: The Sky is Not Falling

The annual survey of employer health benefits by the Kaiser Family Foundation for 2014 reports the following:

  • The average premium for employee only coverage increased 2%; the average premium for family coverage increased 3%, and the average worker’s wages increased by 2.3%.
  • Covered workers pay 18% on average as their share of individual coverage and 29% of family coverage.
  • The rates of employer offer, and employee take-up are statistically unchanged.
  • 25% of large employers now offer retiree health benefits – statistically unchanged.
  • More employers (a third) are offering wellness programs and incentives, more (19%) are offering high performance tiered networks; more (13%) are considering private exchanges, but only 3% are offering them; more (12%) are offering reference pricing; more (8%) are offering narrow networks.

On the other hand over the last 15 years, employer coverage has been decaying

  • The rate of employer offering has fallen from 68% to 55%.
  • Employee contributions towards coverage have increased at 4 times greater than employee wages.
  • The percent of workers covered through their jobs fell from 70% to 62%.
  • Large employers’ offer rates of retiree health benefits fell from 40% to 25%.

In other words, reform was needed, and to date the ACA appears to be working for the American workers and their employers. These are good building blocks, but it’s far too soon to pop the champagne.

New York’s New DSRIP Waiver & What It Could Mean in California UPDATED

New York state and CMS signed a new DSRIP waiver in April 2014. The goals are transforming the state’s health care system, bending the Medicaid cost curve and assuring quality care for all Medicaid members.

The waiver puts an emphasis on transformation of the safety net, cost reduction and improved outcomes. It is built on collaboration, collaboration, and more collaboration to achieve these goals — a very different model from California’s 2010 DSRIP waiver, which was facility focused. Collaborative partners in New York’s new waiver include: hospitals, health homes, SNF’s, FQHC’s, behavioral health providers and home care agencies.

The state of New York has agreed to reduce the projected federal Medicaid spending by $17 billion over the five years of the waiver and the federal government has agreed to reinvest $8 billion of these projected savings into Medicaid transformation in order to get the actual savings. New York plans to reduce spending on avoidable hospitalizations by 25%.

Read the full brief here.

Summary and Analysis of Burwell v. Hobby Lobby 573 US — (2014)

The Supreme Court held yesterday that a family owned for-profit corporation could invoke the Religious Freedom Act to claim an exemption from offering coverage of contraceptive services to their employees

The Affordable Care Act requires large employers and those small employers offering coverage to cover preventive services that are of proven effectiveness and meet the effectiveness criteria of the US Public Health Services. Exemptions are available for grandfathered firms. Furthermore there can be no copays for effective preventive services.

Contraceptive services are part of the list of demonstrated effective preventive services. Hobby Lobby and the other plaintiffs objected to four specific contraceptive services, essentially IUDs (Intrauterine Devices) and morning after pills, saying they were equivalent to abortion and against their religious beliefs. They argued that they would comply with the rest of the Affordable Care Act, but in their religious conscience could not offer those four contraceptive services due to their religious beliefs.

HHS gave religious exemptions to churches and other comparable religious non-profits who have religious objections to contraception. In order to preserve access to contraception for men and women who work for these exempt employers; they created a work-around so that insurers would offer the services at no cost to these employees. Since the contraceptive services are a cost saver, rather than a cost increaser, the insurers can offer them at no additional premium cost.

The majority opinion says that the 1993 Religious Freedom Act requires HHS to offer the same workaround for the religiously motivated for-profit, family-owned plaintiffs. The dissent says that the majority misreads the Religious Freedom Act. It’s an interesting legal discussion for those interested in statutory construction. Here are some highlights as I see them.

  • The court majority says that corporations are “people” and protected by the RFA while the dissent says that the RFA reaches only real people who go to church and have religious beliefs, not corporations who by their very nature do not go to church or have religious beliefs. The legislative history seems to favor the dissent on that one.
  • The court majority says that HHS must offer the same “least restrictive” accommodations (i.e. the no cost work-around) to for-profit corporations with sole family owners with strong religious beliefs as they make for the churches who teach those beliefs. The dissent says that church exemptions are for genuine “churches” not for the corporations owned and run by people with genuine religious beliefs.
  • Finally the dissent says the majority completely ignores the rights and interests of the men and women employees who also have religious beliefs that may be at complete variance with their employer about the value of contraceptive services. The ACA’s design of covered benefits for all Americans assumes that most Americans will continue to get full scope coverage through their jobs and not through a government program (like Covered California) that is only available to those without an offer of affordable job-based coverage or Medi-Cal that is only available to the poor. The majority opinion reiterates that government can offer the workaround or can expand the Title X, Family Planning Act to reach those men and women employees who cannot afford contraception.

Mirror, Mirror on the Wall, 2014 Update

The Commonwealth Fund has recently released its 2014 update comparing the performance of the United States health system to ten other developed countries. The comparative data predates the implementation of most coverage expansion provisions of the Affordable Care Act so the U.S. bottom ranking should improve, one would hope quite quickly, but most likely at disparate rates in those states that have embraced and declined the ACA coverage expansions.

The United Kingdom, a true socialist system where the government owns and operates the hospitals and employs the doctors ranked highest. The Swiss system which is purely private based on an individual mandate that all Swiss residents purchase private insurance finished second. The Canadian single payor system finished tenth, and the United States ranked eleventh and last.

The United States system ranked poorly on cost, outcomes, efficiency, equity, access, and healthy lives. Its best performances were on effectiveness of care, patient centered care, and timeliness of specialty care.

The Affordable Care Act’s coverage expansions should improve the system’s performance on access, equity, and primary care access. The ACA’s payment reforms for Medicare have the potential to improve quality and outcomes to the extent that they are more widely adopted by private insurers and state Medicaid programs.

California is among the states best positioned to improve the performance of its health system to get better, safer and far more cost effective care.

Click HERE to download the Executive Summary or Full Report

Updated – Better Coordinating Coverage for Pregnant Women: Putting Families First

Covered California plans and nearly all individual and employer-based health insurance plans offer maternity care.  California covers care for pregnant women through Medi-Cal (up to 200% of FPL), Access for Infants and Mothers (AIM) (up to 300% of FPL) and now Covered California covers maternity care (with premium subsidies up to 400% of FPL). In the Medi-Cal program, California offers the Comprehensive Perinatal Services Program (CPSP), which provides health education, psychosocial counseling and nutrition counseling that help achieve better birth outcomes.

The Governor’s budget proposes to shift AIM from the Managed Risk Medical Insurance Board (MRMIB) into the Department of Health Care Services (DHCS) and to give pregnant women with pregnancy-only Medi-Cal eligibility and incomes up to 208% of FPL the option to use premium assistance and wrap around benefits to enroll in Covered California. This appears to us to make a great deal of sense both programmatically and fiscally, but it is just a beginning. We need to make sense of these overlapping programs. While there are many commonalities, there are the following key differences among the programs: coverage for different provider networks and plans, different reimbursements, different rules governing the timeliness of applications, different rules for the undocumented, different rules for subscriber contributions, different covered services and different program administrators. There is an opportunity to coordinate these programs to improve birth outcomes. Premium assistance may allow us to simplify these programs in the best interests of the expectant mothers, their children and their families.

Let’s make it easy for families to understand and navigate. We would suggest that DHCS administer the program for women with family incomes under 138% of FPL and that Covered California administer the program for women over 138% of FPL. This would merge a portion of AIM and a portion of Medi-Cal pregnancy-only coverage into Covered California. Covered California could use premium assistance and the available Medi-Cal and AIM funding to upgrade care and coverage for pregnant women with incomes up to 300% of FPL: 1) upgraded services during pregnancy, 2) reduced copays during pregnancy, 3) reduced premium contributions during pregnancy, 4) adding pregnancy to the list of special life circumstances where enrollment is authorized outside the annual open enrollment period, and 5) continuity of care.

Read the full report here.



60 Days of Open Enrollment in Covered California for COBRA Subscribers Begins May 15th

Individuals with COBRA coverage have 60 days to switch to Covered California. Open enrollment begins May 15th and ends July 15, 2014.

Why might one switch? Some COBRA enrollees are eligible for premium assistance that can reduce their monthly premiums. Some Covered California plans are less costly and offer better coverage than some existing COBRA plans.

Why one might want to stay in COBRA? Some doctors participate in COBRA coverage and do not participate in Covered California plans. Some COBRA plans offer more benefits and at an affordable price.

For more information, see Covered California’s FAQ.

Secretary Kathleen Sebelius

I think we should remember Secretary Sebelius for her results: over 7.5 million enrolled in the Exchanges in the first six months, coverage for young adults through their parents, very slow rise in health care costs, extending the viability and improving the performance of Medicare, and the beginnings of transparency in health spending, prices, and outcomes. Californians will particularly remember her for the 2010 Section 1115 waiver which allowed California’s counties to get a running head start on Medicaid enrollment – 650,000 covered even before ObamaCare launched on October 1. Certainly the federal Exchange computers crashed on her watch due to a combination of poor design and massive public interest, but they got fixed, and enrollment beat everyone’s expectations.

I will remember her best as a Cincinnati “homie”. If I remember correctly, her Dad (finished 1st) and my Dad (finished 18th) ran for City Council on the same Charter Party ticket back in 1953.

Congratulations, Californians

It appears as if we have at least 3.2 million newly enrolled in Medi-Cal (2 million) and Covered California (1.2 million). Another 500,000 Californians began their applications before the March 31 deadline and have until April 15 to complete them. These are phenomenal numbers in just six months. And nationally, 7.1 million are enrolled in the new Exchanges.

We all exceeded expectations and now to need to learn what worked and what did not. The ACA gloom and doomsayers were dealt yet another blow. This is due to the hard work, dedication and cooperation of so many California heroes. But we need to focus now on seeing that people get the health care, the improved patient outcomes, the customer services and treatment by their providers and health plans that they expect and deserve.

ITUP’s regional workgroups start next week, and we hope for a healthy discussion of what worked and what did not. ACA implementation is a work in progress, but in California, this has been an incredible first step on the path forward.

The next open enrollment for Covered California is only seven months away. During the interim, if eligible, you can enroll in Medi-Cal at any time. If during this interim period, you experience a loss of coverage due to “life events” such as job loss or change, divorce, marriage, birth death or other qualifying events you can enroll in Covered California, if otherwise eligible.

Lucien Wulsin, ITUP

April 9, 2014