Another sign that the economy is mired in muck, with prospects for improvement any time soon being very dim:

A new survey shows a family health plan in 2010 averages $4,000 a year, up 14% from 2009. Meanwhile, the average employer contribution to a family plan hasn’t increased at all. [...] Overall, premium growth slowed slightly this year to 3%, with the average annual cost of a family health plan reaching $13,370. Workers picked up 30% of that bill. The average plan for a single individual cost $5,049.

Slow job growth. Incremental premium increases. Higher out-of-pocket expenses for care. Forget about cost-sharing. This is massive cost shifting, and healthcare consumers are being forced to take the brunt of the cost of that coverage. | LINK

In the nascent days of Pres. Obama’s reform legislation, much in the way of healthcare policy at the start of this crucial decade proceeds incrementally. With respect to the role of small businesses, expect the use of targeted tax credits for employees as another incentive for the smallest of those private proprietorships to remain viable in both the healthcare economy and the economy in general. It’s all about baby steps and getting skin the health reform game at the outset. The Congressional Budget Office estimates the credits could give up to $40B in savings to small businesses over the next 10 years and lower annual premiums by approx. 10 percent by 2016. | PDF LINK to Commonwealth Fund white paper

For the past six months insurance regulators in California have been working through negotiations with Anthem, a BC insurer whose initial premium rate hikes became a cause célèbre for healthcare consumers in that state and the Obama administration, alike. The previously proposed 39% increases created a firestorm in healthcare policy circles and provided Obama and HHS a temporary PR headache as a solution to lower premium increases was sought. The end result after scrutiny of state ledgers is a “smaller” increase —  of approx. 14 percent. | MP3 LINK

Medical loss ratios (MLRs), those metrics used by insurance companies to gauge medical costs as a percentage revenues from premiums, will be attracting some attention this week thanks to a provision in the recently passed reform bill that will allow a third party to be instrumental in determining how much insurers can ultimately spend on those admin costs — influencing profits in the process. That third party — the National Assn. of Insurance Commissioners (NAIC) — could have far-reaching authority in determining Insurance’s role in final implementation of the healthcare reform law come 2014.

HHS Sec’y Kathleen Sebelius could be at the mercy of the NAIC with respect to these new rules, creating disquietude among top Dems who favored reform with as little corporate influence as possible. Although the federal government has final say over where MLRs begin and end, states’ insurance commissioners actions will give lobbyists and insurers alike time to affect ultimate MLR regulations under reform law. Expect a mildly bumpy road at the hands of Insurance — which desires as little distance as possible between administrative quotas and earnings. | LINK

Illinois will offer this week the first-in-the-nation coverage plan for its uninsured since health reform was enacted. Currently, the state has almost 2 million uninsured by estimates. The plan to place them on coverage rolls will not reach them all — only a fraction, actually. Illinois’ Pre-existing Condition Insurance Plan can only enroll enough in its high risk pool because of federal funding limitations.^[1]

The creation of high-risk insurance pools under reform is one way over the next 4 years President Obama has said he will rein in coverage costs by mimicking enrollment/disenrollment policies of states; creating service areas of operation with HHS guidance; issuing creditable appeals processes for enrollees; preventing employers from creating disincentives for employee enrollment in those pools; and utilizing accountability rules to prevent fraud.

Illinois is the first state to test the waters in this transition to healthcare exchanges set to begin in 2014. | LINK

1. Funding comes from premiums and from the federal government, which is giving the state $196 million to run the plan until 2014 when healthcare exchanges will be required under the 2010 Affordable Care Act. [↩]

The state of Massachusetts has reached a deal with the fifth of six insurers initially denied rate hikes for coverage in that state. While nowhere near the massive increases sought in other high-profile states, Massachusetts’ most recent settlement involved a company’s requests for hikes in the 10% to 25% range for policyholders. Over 90% of coverage in Mass. has been positively affected by settlement negotiations with those five insurers which includes the individual market and small-business purchasers. The process of rate hike negotiations is just another factor in the long history of closely observed operations in a state which guarantees coverage to all of its citizens. | LINK

Healthcare reform begets the need for laws to ensure the intent of reform. This has never been truer than on the eve of implementation of the major role individual states’ insurance commissions in keeping Insurance accountable. As coverage begins to expand to include demographics never before considered by insurers, many states have no mechanism to face enforcements of the central tenets of the reform law. Most outstanding, states will now have the ability to review insurance premium hikes, for example — the number one stealth maneuver of insurers of late to guarantee profitability.

If states are not able to carry out insurance compliance in accordance with with reform law, the feds step in to guarantee standards. Problem is, as intricate as the central aspects of reform are, the provisions in many states’ laws are just as myriad.

Some state regulators said they would ask state legislators to expand their authority by putting the federal standards into state law next year. Others said they would rely on their powers of persuasion, the good will of insurers or general state laws that ban unfair or deceptive trade practices.

Despite assurances to states by the federal government that, ultimately, such oversight is well within their scope, gaps in executive powers vary widely; these inconsistencies place yet another wrinkle on the rapid rollout of reform provisions the Obama administration hopes will result in a smooth transition between the parties that will continue to drive healthcare in this country (insurers) and the ultimate functional unit of healthcare commerce (the physician-patient partnership). | LINK

The initial impact of the new healthcare reform law won’t begin until late September/early October. But how much do Americans really know about the legislation’s benefits and changes? President Obama has embarked on some PR jaunts to remind the public of the virtues of reform, but is the White House’s awareness campaign really enough to get the word out that reform is actually imminent? Apparently not.

Many key parts of the new law, signed by President Obama in March, take effect in several stages beginning next month and continuing through 2015. Because it’s so complex, consumer advocates worry that people won’t take advantage of its benefits, so they have embarked on a nationwide education campaign. [..]

“People are still afraid that there are death panels . . . or that Medicare is going to go away,” says Cheryl Matheis of AARP, the nation’s largest seniors organization. “We have an obligation to get the information out there…”

It’s the new reality. Focus groups, polls, lobbies. To bad reform won’t cover the cost of these mechanisms of information dissemination. | LINK

BC/BS Michigan is asking that state’s insurance regulators to vary the premium amounts on its Medigap supplemental offerings to seniors. It will ask state regulators to allow deeper discounts to low-income seniors while reducing the discounts on premiums for wealthier seniors. Medigap plans are standard insurance supplements to Medicare coverage offered only to beneficiaries with both Part A and B coverage.

Plans offered usually are the same; only the premiums can differ. All Michigan Blue Cross customers for the most popular of its Medigap policies now get a 39 percent discount off monthly premiums. The discount is distributed evenly to all Medigap policyholders, so that everyone pays just over $100.

It appears that with this move, the Michigan insurance marketplace is one of the first arenas in which states will negotiate with payers in the wake of expected cuts under Medicare Advantage offerings to fund reform over the next decade. | LINK

The theory of the moral hazard hypothesis goes something like this: moral hazard occurs when a party isolated (set-off) from risk may react differently than it would if it were fully exposed to the risk. In the case of risk aversion, insurers are stepping up concerns that families will seek coverage under new reform laws only after their children fall ill. They contend that the ability to keep this from happening will contain costs and premium increases.

The White House seemed to be waiting for the line to be drawn in the sand before responding to this potential reform-killing measure — that is, until Insurance essentially threatened ending children-only plans under reform altogether in some states.

Some state insurance commissioners expressed concern that, without an open enrollment period that was widely communicated, people might wait until their children got sick to enroll them in coverage, causing plans’ costs to increase. And we were concerned when last week, some indicated that insurance companies would choose to stop offering policies for children rather than cover kids with pre-existing conditions.

HHS has since clarified the administration’s position on this matter issuing an advisory stating the formation of open enrollment periods, outside of which coverage will not be provided. Now, the distinction between children with congenital and pre-existing conditions and those with acquired, high-cost diagnoses is more clearly defined — for the purposes of the insurance companies, that is. | LINK

No matter the moniker (beneficiary, patients-as-consumers, healthcare consumers, policyholders), the economics-speak of healthcare reform places the person at the very center of it — the patient — left to assess two very basic questions with each care encounter: (1) Did I get my reason for access to a mode of care addressed? and (2) [How much] will I have to pay for it? Seems as though this poor soul is not too happy about having to acknowledge this bit of healthcare cognitive dissonance.

“Why am I being billed for services I never wanted to get?? Because health care providers think they can simply do what they want and people will have to pay for it, or their insurance company will. That is wrong.”

Sometimes the meaning of life is easier to come up with. | LINK

Got a gripe with your health insurer? You may be in luck. Under the new reform law, President Obama is making it easier to file appeals and have them evaluated because of a rejected claim. Prior to reform, the appeals process differed among insurers, adding to the bureaucratic “justification” for the rather phlegmatic approach to such issues in the past.

Now, consumers will appeal directly to the insurer. If they’re denied a second time, they can go to an independent reviewer whose decision is binding. Health plans must pay the cost of outside appeals, and if they’re overruled, they must cover the disputed claim in full. Consumers can also use the appeals process if their coverage gets canceled. The program will benefit almost 90M policyholders by the law’s totality in 2014. | LINK

In a reform environment in which appearances are everything, providers could be looking to the AMA for some help. Some physician groups/health systems, the AMA says, could be unfairly targeted by insurers’ quality ratings to steer patients toward systems they deem more “efficient”, creating a somewhat dubious practice reputation for those health systems cited as “inefficient”. Insurance companies counter that, in this age of reform, the delivery and coverage marketplace will have to adapt to measures, they say, are being mandated by the Obama administration as necessary mechanisms of reform and quality.

The AMA is particularly worried about individual physicians being rated by insurers. The doctors’ group says physicians who are deemed expensive may be looking after sicker patients, or the claims data may simply be inaccurate.

A very simplistic view by the AMA, as the 21st century patient and healthcare consumer is able to make informed decisions on provider networks based upon resources unavailable to them just a few years ago. Patient advocacy groups, disease advocacy organizations, support groups, and … even insurance companies themselves are sources of care informatics designed to “steer” patients to where they should be seeking care based upon the best available data matching their unique chronic care needs. Healthcare quality doesn’t just appear out of nowhere; it must be earned. Patients cannot benefit from it without physicians who are capable of providing it.| LINK