From Health Plan Week
– January 12, 2015 – Volume 25 Issue 1
Five years after enactment, health insurance agents and brokers say the Affordable Care Act (ACA) and the law’s public exchanges still are playing a major role in their 2015 business planning as consumers and businesses decide on coverage options in the individual and small-group segments. At the same time the reform law continues to overshadow the marketplaces, there are frustrations from brokers who see less expensive options go wanting for consumers hell-bent on reducing insurance costs.
“The consumer is screaming for more affordable options to satisfy the individual mandate and to have access to plans that are more limited in benefit. The trend has been created by the ACA to offer coverage that has no pre-existing condition clause, is guaranteed issue and renewable. Carriers will have a hard time developing products and at the same time being financially sound, while reflecting the needs of the consumer,” John Osborn, agency owner and operator of Osborn & Associates in Springfield, Mo., tells HPW.
He relates that high-deductible health plans (HDHPs) compatible with health savings accounts (HSAs) “would certainly be a better option, but the push to educate the consumer on becoming interactive with their health care costs and participate in the upfront cost of procedures is the best way to get them to make better health care decisions and overall helping the carriers (and now the government) manage risk and retain lower rates.” Regardless, the industry will be “stuck” with plans that provide essential health benefits, adhere to the metallic plan structure (gold, silver, bronze, etc.) and have expensive deductibles and coinsurance that are difficult for most consumers to satisfy when services are rendered, he laments.
Neil Crosby, director of sales for Warner Pacific Insurance Services in Westlake Village, Calif., calls this year’s marketplace a very challenging one for employers when it comes to the reform law, even if it marks the second year of exchanges. “As a result agents are being asked with more frequency and in more detail to assist in providing them [business owners] with compliance information and guidelines. Therefore, agents are in what seems like a constant search for information that will help their clients,” he tells HPW.
Plan Designs Focus on Networks, Cost Sharing
As for what trends Crosby foresees emerging over the next 12 months, there should not be too much deviation from traditional plan designs. “In more rural areas we still see PPO plans to be the major plans requested, and in the more urban areas HMOs are more predominant,” he says.
John Paternoster, owner of Paternoster Insurance in Madison, Conn., tells HPW that he also expects more of the cost burden to be passed onto the consumer/employee in the new year. And Russ Childers, an insurance agent based in Americus, Ga., predicts a continuation of the trend toward higher deductibles.
Network size will also be on the minds of consumers and brokers, says Craig Gussin, a principal at Auerbach & Gussin Insurance and Financial Services in San Diego. “I see more narrow network plans with less benefit coverage, if less benefits is possible for them to do under the ACA. One insurance company in California has very low individual rates, low commissions and very narrow networks. Some consumers will see the cost and buy it on the exchange,” he says. “The problem will arise when people try to go see a doctor and find out they can’t see the doctor they have been seeing for years and they will then understand why the cost is so much less than every other similar plan.”
For group insurance, Gussin tells HPW that he sees more high-deductible plan designs with unique benefits to lower cost along with the slimmed down provider network.
In a broader view of the broker landscape for 2015, Rick Bailey, president of Rick Bailey & Company, Inc., based in Woodstock, Ga., tells HPW that the expected summer decision by the Supreme Court on subsidies paid through the federal exchange (King v. Burwell (14-114)) will be on many minds (HPW 11/17/14, p. 7). He also says brokers’ ability to easily navigate HealthCare.gov still requires work.
On types of plans that Bailey sees as being popular this year, in the individual market the trend will be to move more policyholders to the gold plan and high-deductible coverage that will allow a person to set up a HSA. “A majority of people are moving from the platinum plans they purchased in 2014 because of the increased premium,” he says. For example, Bailey says in 2014, the average monthly policy premium for his firm in the Atlanta market was $605, but for 2015, the average rate is $544. “The average policy premium in our market has gone down because people are dropping their platinum plans and moving to the gold and HDHP plans,” Bailey adds.
For small groups of less than 50 employees, he predicts more businesses will drop their group policies and move workers to individual policies. In some cases, the individual premiums may be approximately 50% less than the group premiums, Bailey stresses.
Contact Osborn at firstname.lastname@example.org, Gussin at email@example.com, Bailey at firstname.lastname@example.org, Paternoster at email@example.com, Crosby at firstname.lastname@example.org and Childers at email@example.com.
Find this article at:: http://aishealth.com/archive/nhpw011215-03
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