A surprise announcement from the White House puts a key provision of the healthcare reform law on hold, and leaves health plans tending to business while they wait for details.
The Obama administration set of some fireworks of its own last week, announcing unexpectedly on July 3 that there will be a one-year delay, until 2015, of a key provision of the Patient Protection and Affordable Care Act that requires mid-sized and large employers to provide health insurance for their workers or pay a fine.
Health insurers are uncertain how the delay will affect them, and await detailed guidance on the how reporting requirements will now be implemented. More information is expected this week according to the Treasury Department.
In the meantime, health insurers are going about their business. Here’s a round-up of health plan news since the Independence Day holiday:
Blue Cross Blue Shield Plan Administrative Costs Increased in 2012
The PPACA makes streamlining administrative costs a high priority for health plans. Administrative expenses of BCBS plans were 8.9% of premiums in 2012 and grew by 5.1% per member, according to the 2013 Sherlock Expense Evaluation Report or SEER.
The increase was reduced to 3.8% after excluding the effects of a product mix change that favored Medicare Advantage products. Blue plans reported median total administrative expenses of $29.25 per member per month.
Among the contributors to administrative cost growth: information systems were responsible for most of the mix-adjusted growth, though sales and marketing costs grew fastest. Finance and accounting, as well as corporate executive costs declined.
The report looked at 19 Blues plans serving 34.1 million members.
Aetna, UnitedHealth to Drop Individual Coverage in CA
The decisions will leave about 60,000 individuals looking for new coverage just as California’s health insurance exchange, Covered California, kicks into gear. Considering their small market shares, it is likely that both insurers decided it was too tough to make a buck in the individual market as healthcare reform requires coverage of pre-existing condition and removes coverage limits.
David Jones, commissioner of the state’s Department of Insurance is not amused. "…their departure means less choice, less competition, and more market consolidation by the remaining big three health insurers—Anthem Blue Cross, Blue Shield of California, and Kaiser—which means an increased likelihood of even higher prices from those health insurers downstream," he stated in a press release.
Jones added that a tax break available to their competitors may be contributing to the market change. “… The special tax break that California law gives to Anthem Blue Cross and Blue Shield of California… has allowed and continues to allow those two companies to avoid paying $100 million in state taxes a year. Aetna and United Healthcare don't get the special tax break… so they faced a major competitive disadvantage in California."
WellPoint, AAP Effort Leads to Pediatric CT Study
More than 25% of the children evaluated in emergency departments for headache received a CT scan, possibly exposing them to unnecessary radiation and increased cancer risks, according to study published in the July issue of Pediatrics. The study stemmed from efforts by WellPoint and the American Academy of Pediatrics to find out how practice patterns for treatment of pediatric headache align with practice guidelines.
CTs are often performed at the behest of parents even though providers often gain little clinically useful information from these imaging studies.
The American Academy of Neurology recommends MRIs as opposed to CT imaging for people with headache, a normal history and neurologic examination. "We found that AAN imaging guidelines were most often followed by neurologists when treating children, but not by other physicians," Dr. Alan Rosenberg, WellPoint’s vice president of medical and clinical pharmacy policy," said in a press release.
BCBS of Michigan Posts PCMH Savings
Blue Cross Blue Shield of Michigan has saved an estimated $155 million over the first three years of its patient-centered medical home program, according the Blues plan and University of Michigan researchers in a study published in the Health Services Research Journal.
In addition to the savings the PCMH increased quality scores by 3.5% and increased preventive care scores by 5.1%. The PCMH has an estimated one million members.
"This tells us that patients benefit from higher quality and improved preventive care even as physician practices are progressing toward full implementation of the PCMH model," Michael Paustian, PhD, lead author and manager, department of clinical epidemiology and biostatistics for BCBS of Michigan.
Wellmark BCBS Reserves Under Scrutiny in Iowa
Two Iowa state senators want to know why Wellmark Blue Cross & Blue Shield is holding $1.3 billion in reserves now that it no longer plans to participate in the state health insurance exchange. Sen. Jack Hatch (D) and Sen. Matt McCoy (D) have asked the Iowa Insurance Commissioner to investigate.
In a letter to the commissioner, the senators noted that the Iowa Insurance Department supported the reserve amount in 2011 in light of the demands of the federal Affordable Care Act and made note then of Wellmark’s anticipated participation in the state HIX.
“The company’s decision to decline participation in Iowa’s exchange removes a major component of the justification for the [sizeable] reserves," the letter states.
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
