Quote of the Day

“What [Gilead Sciences] has done with [the hepatitis C drug Sovaldi] will break the country. It will make pharmacy benefits no longer sustainable. Companies just aren’t going to be able to handle paying for this drug.” — Steve Miller, chief medical officer for Express Scripts Holding Co., in an interview with Bloomberg.

Today's Datapoint

6% … is the annual premium increase for “silver” plans on public exchanges that are projected from 2016 through 2024 in a new report from the Congressional Budget Office and Joint Committee on taxation.

Quote of the Day

CMS’s final 2015 rate notice and Medicare Advantage/Part D Call Letter issued April 7 “was a holy cow….I don’t think we saw all this coming. It seemed like they changed everything.” — Pat Dunks, a principal and consulting actuary in the Milwaukee-area office of Milliman, told AIS’s Medicare Advantage News.

Questions employers should answer before going the private health insurance exchange route

1. What are you trying to do with your health care benefits; what’s your overall talent management strategy? 2. What are you looking for in an exchange; what kind of services are you trying to buy? 3. What are the criteria that are important to you when you evaluate exchanges? 4. How is the exchange structured: is it a single carrier or multicarrier exchange? 5. Does the exchange determine what the benefits are, or is there flexibility for the plan sponsor? Source: Employee Benefit News

Top Customer Experience Rankings Among Health Plans

1. Kaiser Permanente (68%) 2. Humana (63%) 3. Medicare (62%) 4. TriCare (62%) 5. United Healthcare (59%) 6. Blue Shield of California (58%) 7. Aetna (57%) 8. Health Net (55%) 9. CIGNA (54%) 10. Anthem (BCBS) (53%) 11. CareFirst (BCBS) (48%) 12. Medicaid (45%) 13. Highmark (BCBS) (44%) 14. Empire (BCBS) (42%) 15. Coventry Health Care (41%) Source: Temkin Group

The Small Business Health Options Program (SHOP) Marketplace and The Small Business Health Care Tax Credit

1. Employers with fewer than 25 full-time equivalent employees may be eligible for the Tax Credit, worth up to 50% of employer premiums contributions, if employees make average of $50,000 a year or less. 2. The tax credit will be available to eligible employers for two consecutive taxable years. 3. The tax credit may be available to eligible tax-exempt employers who could receive up to 35% of employer premium contributions, and can access the credit as a refund. 4. Generally, the Small Business Health Care Tax Credit is available for eligible employers purchasing SHOP health plans. 5. To enroll in a SHOP plan in most states, you’ll use an agent, broker, or insurance company. You’ll also need to complete a SHOP eligibility application. 6. Even if you’re a small employer who does not qualify for a small business tax credit, you may still purchase coverage through SHOP. Source: Healthcare.gov

Is It Up, Up and Away for 2015 Premiums? CBO and Actuaries Disagree

By Steve Davis - April 17, 2014 Will premiums for exchange-based health coverage skyrocket this fall? The Congressional Budget Office doesn’t think so. In a report released April 14, CBO and the Joint Committee on Taxation predicted lower costs than initially projected due largely to the way health insurers have restructured the plans (e.g., using narrow networks and lower provider reimbursement rates). But based on my interviews with health plan actuaries, it seems to me that up is about the only direction health coverage prices can go. During WellPoint, Inc.’s Investor Day March 21, executives conceded that exchange premiums in 2015 will likely need to go up by “double digit plus” levels. WellPoint participates on 14 public exchanges and probably is the single-largest seller of qualified health plans on exchanges. Health plan actuaries agree that it’s too early to know how much rates will rise for 2014, and health plans are still a little in the dark about what their risk will look like. But Chris Carlson, a principal and consulting actuary at Oliver Wyman, says the underlying risk, in a best-case scenario, will increase rates 6% to 8%. Lower-than-expected enrollment could add another 1% to 2%. The insurance tax, which became effective this year, may add an additional 0.5% to 1.0% to premiums for 2015 as the tax increases from $8.0 billion to $11.3 billion. The overall impact the insurance tax will have on 2015 rates, compared to what’s built into 2014 rates, is about 0.5%. The scheduled reduction in federal transitional reinsurance payments could require rates to increase in the individual market even without any of the other rate-influencing forces, says Hans Leida, Ph.D., a consulting actuary at Milliman. And preliminary data from pharmacy benefit managers Prime Therapeutics and Express Scripts indicate those new members also tend to use more costly specialty drugs than do people with non-exchange based commercial coverage. Actuaries are conservative by nature, so even the general uncertainty surrounding exchanges could impact rates. The more uncertain the environment, the more margin actuaries want to build into the rates. What do you think? Will carriers be able to keep rates low for 2015? See the CBO report at www.cbo.gov/publication/45231. http://aishealth.com/blog/health-reform/it-and-away-2015-premiums-cbo-and-actuaries-disagree?utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=38613482