Archive for October, 2015

What we learned at CAHU

October 8, 2015

Mark and JohnHealthcare reform is out of the headline news these days so what is the status of HCR and why the heck are employers seeing 116%+ increases to their premium.

Just a couple thoughts about Healthcare Reform and the attitudes or perspectives in the US.

Healthcare reform AKA: the Affordable Care Act or ACA, does not make the news these days for a whole bunch of reasons; Trump, Hillary, Middle East, failing economy, citizens out of the work force, etc. This does not mean that Americans, particularly employers, are not thinking about it. Frankly, most are not happy with it.

Last week we attended the California Association of Health Underwriter’s annual association meeting and expo (CAHU). I was interested in the mood of both brokers and insurers as well as new ideas or solutions. Quite frankly I was a bit shocked at some of the things I saw.

From the last 5 years, from 2010-2014 health care premiums rose by 10% or more each year, drip-drip-drip. Now as the last of employers move off their old plans onto ACA plans we see increases from modest single digit to as high as 116% so far. Now why should any vender need to increase the price of its product by that much? But, I digress.

As we attended the CAHU expo the attitudes were really somewhat cavalier or blasé as though double digit rate increase are the new normal. Two side effects from five years of consistent rate increases are now evident:

  1. Brokers were not complaining about lower commission levels
  2. Carriers are taking risky moves such as lowering participation requirements to as low as 25% (standard used to be 70%) and taking no steps to certify group size (not requiring payroll reports). Yikes!

As a side note, which do you think creates more risk to an insurer lowering participation requirements to 25% or allowing employers to implement HRAs? Sorry, I digress again.

Speaking of HRAs, they are back in “vogue” for 2015 and 2016. It appears that  brokers have no other tool to help their clients maintain benefits and control costs. Plus, employers see no values in paying increased premiums for the painfully crappy benefits in some silver and bronze plans. Face it, would you pay the current ACA level premiums of a bronze plan only to get a $5000 deductible with no Rx, no office visits, and $6,650 out of pocket or worse?

One other topic that was of keen interest was the MEC (Minimum Essential Coverage) and MVPs (Minimum Value Plans), and stop loss plans in general. It is clear that brokers want these plans and need to find a TPA that provides these solutions or else be left behind in the market.

So, the mood at the CAHU expo seemed callused toward premium levels but gung ho on HRAs and stop loss. Maybe the Coalition for Small Business Healthcare Choices will have better luck in January 2016 as it re-introduces its bill AB-1425. Stay tuned.

On a very positive note, this year, CAHU focused the first day of the event on technology. It was well worth the time, energy, and expense to attend. If you missed it then you missed an opportunity to see 20 or so vendors displaying some of the latest in technology. Plan to attend next year.

In closing thoughts are, if carriers and brokers don’t start providing employers more choices and creative ideas such as HRAs then employers are going to start giving up their programs. Luckily for CAHU brokers, California has some of the best TPAs in the country to provide alternatives and new ideas.

Let me know what you think.

Mark Reynolds, RHU