The Fact of the Month
Here’s something to talk about when you are discussing plan design options with your clients.
A new study based on data from 6 million Americans continuously enrolled in health coverage offered through the same employer between 2013-2018 provides some interesting information about coverage and cost-sharing trends. Some of these include:
- High-Deductible Health Plan/Health Savings Account enrollment more than doubled between 2013-2018, whereas the number of people covered through a health reimbursement arrangement has remained level since 2014.
- Deductibles for employee-only coverage rose 54 percent between 2013-2018. Family coverage deductibles rose by 45 percent during the same period.
- Each year, copayments have gone up by the following percentage rates by service—5 percent for emergency room visits, 3 percent for specialist visits, 2 percent for primary care visits, and 1 percent for inpatient admissions.
Source: Employee Benefit Research Institute, “Trends in Cost-Sharing for Medical Services, 2013-2018″
Pennsylvania Gets Federal Approval for its State Individual Market Reinsurance Program Waiver
The federal Department of Health & Human Services (HHS) approved Pennsylvania’s application for an Affordable Care Act (ACA) Section 1332 waiver. Pennsylvania will use the waiver to create a reinsurance program to lower individual health insurance market costs. The waiver, which will start on the first day of 2021 and run through 2025, will allow for partial reimbursement of high-cost individual market claims.
The Insurance Department will administer the program, which it calls PA Re. The Wolf Administration projects that individual market premiums will be about 5 percent lower in 2021 due to the waiver.
Pennsylvania is transitioning to a state-based health insurance marketplace called “Pennie” this fall. Part of the user fee that health insurance carriers will pay to participate in Pennie will supply the state’s share of PA Re costs. The money the Federal government saves on marketplace subsidies due to lower premiums will be sent back to Pennsylvania via the Section 1332 waiver and fund the rest of the program.
PA Re will be a claims-based, attachment point reinsurance program. It will partially reimburse health insurers for high-cost individual market qualified health plan claims. When a percentage of carrier’s claims costs exceed a specified threshold (attachment point), the insurer will get funding up to a specific reinsurance cap. For 2021, the attachment point will be $60,000, with a cap of $100,000, and a coinsurance rate of 60 percent.
NJ Passes New Premium Tax on Fully-Insured Individual and Large Group Health Plans
Last week, New Jersey lawmakers voted on a party-line basis to create a new 2.5% net premium tax on fully-insured individual and large group health insurance policies sold in the state. Governor Phil Murphy signed the tax bill into law, and his administration hopes it will generate $220 million in new revenue annually beginning in 2021.
The New Jersey Association of Health Underwriters (NJAHU), along with state business owners and health insurance carriers, opposed the law. These groups anticipate that its costs will be passed on directly to consumers, in the form of higher health insurance premiums.
New Jersey lawmakers who support the tax claim it merely replaces the repealed federal health premium tax (HIT tax), which will end nationally on December 31, 2020. However, the existence of the new assessment means that many New Jersey consumers and business owners will not reap the savings the repeal of the HIT tax will bring. Last-minute amendments to the legislation did exclude small group market consumers and establish that if the state does not use all of the tax money according to set conditions, the tax will end. However, people who buy individual coverage, and people insured through employers with more than 50 employees will be affected.
State policymakers plan to use $77 million in the new tax revenue to cover the state’s share of its individual market reinsurance program. The rest of the funds raised are slated for individual market premium subsidies for consumers, exchange enrollment supports, and other initiatives designed to boost individual market participation and control costs.
Pennsylvania Insurance Department Bulletin Addresses COVID-19 Price Gouging
Pennsylvania Insurance Department (PID) Commissioner Jessica Altman recently issued Notice 2020-19 concerning some new and disturbing provider billing practices related to the COVID-19 pandemic. The problems involve dental providers and testing laboratories, many of which are charging exorbitant prices and separate fees for COVID-19 care and service expenses.
The notice cautions providers against improper price gouging and lets consumers and health carriers know that the PID and other Commonwealth offices are cracking down on such abuse. Carriers should watch for high prices and new fees from in-network providers and take appropriate contractual action. If those action are unsuccessful or if a provider is out-of-network, insurers and consumers should contact the Office of Attorney General by emailing email@example.com. GPAHU members can add value to their client relationships by communicating excessive charge concerns and possible resolution methods.
Check This Out!
If you want to expand your health policy knowledge beyond this newsletter, here is a resource to check out!
Virtually all Pennsylvania businesses have been affected economically and operationally by the spread of COVID-19. To help companies navigate the changing landscape, the Pennsylvania Department of Community and Economic Development (DCED) has made a round-up of state-specific COVID-19 resources for businesses. The information ranges from state-level funding assistance applications to FAQs for companies looking to implement return-to-work strategies, and it is updated regularly.