Utah Health Insurers Propose New, Lower-Cost Health Plan

Insurance companies in Utah on Friday announced a new product prototype, NetCare, that is designed to provide coverage to state residents between jobs and costs less than COBRA coverage, the Salt Lake Tribune reports.

NetCare will cost substantially less than the price of the average large-group premium because the coverage does not include all the benefits currently required by the state. NetCare would offer individual or group plan coverage for up to 12 months for employees transitioning off their employer’s insurance plan. After one year, plan members would have to reapply as an individual and be evaluated.

The plan will focus on providing beneficiaries with incentives for maintaining healthy lifestyles, as well as discounts and savings for preventive care. Plan members would be eligible for up to $300 worth of preventive care annually for a $5 copayment. Out-of-pocket costs for most services, including hospital and maternity care, would be limited to 30% after the deductible is met. Generic prescription drug copays would be $15 and the plan would cover half of the cost of brand-name drugs.

Insurers also called on lawmakers to address the root causes of increasing health care costs. State Rep. Jim Dunningan (R) said, “Without a reduction of overall costs, it’s not sustainable to offer affordable products on the market” (Rosetta, Salt Lake Tribune, 11/1).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

Military Health Insurance, Care Costs Rising Rapidly

Military spending on health insurance and care has increased about 167 percent, from $19 billion in 2001 to a projected $50.7 billion in 2011, according to a recent report in USA Today. The surging health care costs for military personnel and their families is just one more consequence of the Iraqi and Afghanistan wars, which combined have claimed more than 5,400 American lives.

Overall, military spending on health care is climbing twice as fast as the nation’s health care costs. Given the rising costs with no end in sight, and since there has not been an increase in out-of-pocket fees for military retirees and some active-duty families since 1995, Congress and the Pentagon are now considering such a move, according to Rear Adm. Christine Hunter, deputy director of TRICARE, the military health care program.

TRICARE covers 9.6 million people, according to the TRICARE website, which also states that the new health care reform legislation “will not affect the TRICARE benefits. Eligibility, covered benefits, copayments and all other features of our TRICARE program remain.”

However, the continuing and dramatic rise in health care is “beginning to eat us alive,” according to Defense Secretary Robert Gates in a statement to Congress in February 2010. The costs come from an increased need for care in many areas and a rising number of people enrolled in TRICARE.

TRICARE reported that children of deployed military personnel required 42 percent more counseling sessions in 2009 than in 2005. Since 2004, behavioral-health counseling sessions for troops and their family members have risen 65 percent, with 140,000 patients being seen each week, according to TRICARE. A new report in Army Times notes that an average of 950 veterans who are receiving treatment from the Veterans Affairs Department attempt suicide each month.

Soldiers are returning from the wars with physical and mental injuries that require lifelong and expensive care. Thus far, about 950 soldiers who were in Iraq or Afghanistan have amputations. Since 2004, the Computer/Electronic Accommodations Program (CAP) has filled more than 15,200 requests by wounded military service members for assistive technologies.

Active-duty troops and their family members receive free health care except for out-of-pocket co-payments of $3 or $9 per prescription at civilian pharmacies. Retired military personnel receive the same benefits when they pay $230 per person or $460 per family annually, along with low co-payments for different types of health care. These fees have not been increased since 1995, in sharp contrast with yearly cost increases associated with private health insurance plans.

Military health care costs continue to rise, but as Sen. Lindsey Graham, R-SC said at a recent hearing, “there’s a cost-containment problem. I don’t see how we can sustain this forever, where TRICARE is never subject to adjustment in terms of the premiums to be paid.”

Affordable Health Care Benefits 3 Million to Date, Strengthens Medicare

Kathleen Sebelius announced three million Medicare beneficiaries have received prescription drug cost relief to date as the result of the Affordable Health Care Act.

Health care reform has resulted in a reimbursed of $250 to Medicare recipients falling into the stage 2 Medicare coverage gap, or donut hole. In a press release, Secretary Sebelius says, “The Affordable Care Act offers long overdue relief by lowering prescription drug costs each year until the donut hole is closed.”

Though the rebates will help, for many Medicare beneficiaries, it’s a drop in the bucket, for those hemmed in by brand name medications for which there are no generic substitutes.

However, Secretary Sebelius says the rebate for falling into the donut hole is just the first step. This year, Medicare recipients will receive a 50 percent discount on covered brand name medications, defraying out of pocket expense for drugs like insulin, brand name inhaler, Alzheimer’s medications and Plavix that cost hundreds of dollars for a 30-day supply.

In 2011, Medicare will also pay 7 percent of the cost of generic medications during the coverage gap. Physical exams are paid for as well – the “Welcome to Medicare Visit” will no longer require co-pay for the first time since 1965. Original Medicare also covers an annual wellness exam at no cost.

Other free services for most people include cancer screenings such as mammograms and colonoscopy. Physicians will receive a 10 percent bonus to ensure primary care physicians will continue to serve the Medicare population.

Over the next 10 years, health care reform is anticipated to save traditional Medicare recipients $3500. For those with disabilities and seniors, the savings increases to $12,300 associated high cost drugs.

The savings estimated from health care reform come from an analysis issued by the Department of Health and Human Services.

Finally, the Affordable Health Care Act will help prevent waste and fraud, says Sebelius. There will be stronger penalties, better screening of physicians participating in Medicare and Medicaid and a searchable countrywide database to track claims.

In addition to the 3 million Medicare beneficiaries who have benefited from rebates in 2010, Sebelius says the Affordable Health Care Act will strengthen Medicare for the future.

Workplace Wellness Decreases Health Cost

There is mounting evidence that supports the need for workplace wellness programs and more companies and EAP’s than ever are implementing health and wellness strategies to reduce absenteeism, injuries, health care costs and long-term disability.

Over 64 percent of U.S. businesses attest that wellness programs are effective at improving health. More than 50 percent offer health benefits providing at least one type of wellness program. Employers can use work site wellness programs to prevent direct costs related to disease and illness and to reduce indirect costs by reducing absenteeism, improving productivity and helping employees to achieve better balance in their lives.

The intensity of a workplace wellness program can range from bulletin board, pamphlet or newsletter information to worksite fitness facilities, health risk reduction classes, yoga, and personal lifestyle change classes and coaching. Workplaces can also help by encouraging routine physical exams with primary care providers or holding on-site health screenings.

“Research shows that companies can save anywhere from $3 to $15 for every $1 spent on health and wellness within 12 to 18 months of implementing a [workplace wellness] program,” the statement’s lead author, Mercedes Carnethon, an assistant professor of preventive medicine at Northwestern University’s Feinberg School of Medicine, said in a news release from the heart association.

“Beyond cost savings and increased productivity, visionary employers are realizing the value of an employee’s total health,” she said. “An effective worksite wellness program can attract exceptional employees, enhance morale and reduce organizational conflict.”

More than 130 million Americans are employed which means that workplace wellness programs have the potential to reach a sizable population. “We are making great strides in workplace wellness, but we also know that half of employees don’t have access to these programs, mainly because they work in small companies or for employers that have a small number of employees at multiple sites,” Carnethon said.

According to a study of 2,400 adults, published in the journal Preventive Medicine in 2003, people who increased their physical activity from none to three days per week or more paid $2,200 less on average per year for health care than those who remained sedentary. According to NBGH research, obesity-related health issues alone cost American companies roughly $13 billion per year.

Workplace wellness can not only decrease health cost, but help the employee feel more motivated and have higher work production. If your place of work does not have a wellness program ask them to start one.

Governor Seeks More New York Health Insurance Regulations

NY democrat Governor David Paterson, is looking for more regulation to control New York health insurance rates as critics say rate increases have driven too many New Yorkers to drop their plans. One of Paterson’s proposals seeks to require New York health insurance providers to gain state approval for rate hikes. Insurance companies are currently able to set medical coverage rates without government control. Paterson, and others, say that needs to change.

The proposal would give power to the state’s Insurance Superintendent, currently Eric Dinallo, to set insurance rates. Paterson, Dinallo and others insist that with a broad view, the government can set fair New York health insurance prices that won’t disrupt the marketplace. The officials also claim this will bring down costs in the other arenas of health care, such as provider and administration costs.

The New York Health Plan Association sees such proposals differently. The NYHPA argues that the proposal unfairly targets only the sector of New York health insurance in which they operate. Leslie Moran, spokeswoman for the association, notes the proposals make no mention of hospital and care-provider costs, a key indicator used by insurers to set rates.

Provider costs have risen faster than inflation in recent decades due to a number of reasons. New technology has helped drive up cost to some degree, though also helping to save lives. It is the threat of malpractice suits that is perhaps the single-most responsible reason for compounding health care costs in the United States. Regardless of the measures taken to control health care costs, without tort reform, costs will continue to escalate as providers are forced to pay higher and higher rates for malpractice insurance. This is an aspect that those seeking to reform New York health insurance fail to acknowledge.

A number of other proposals are also under consideration by the Paterson administration. Currently, most New York health insurance plans drop coverage for children at age 23. Paterson is seeking to raise the age of coverage for single children to 29. Concerning COBRA, Paterson is proposing coverage be extended from 18 months to 36. COBRA allows for those who have lost their jobs to have continuation coverage of the health insurance plan they had while employed.

Part of reforming New York health insurance will also involve reducing the time insurance companies have to pay providers. Governor Paterson wants to reduce this time from the current 45 days, down to 15. New York health insurance plans are set to undergo serious changes under these proposals. However, it remains to be seen how failing to address the costs of providers will effect reform.

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