Day: November 2, 2010

MyHealthGuide Source: Matthew Brodsky, Senior Editor/Web Editor, Risk & Insurance® Article

Employers weigh the difficulties of grandfathering their employee-health plans under new federal guidelines versus the opportunities of self-insurance. The self-funded marketplace could win.

After fearing and lobbying against federal health reform, the industry that caters to self-funding employers might actually experience new, profitable opportunities, thanks to the Patient Protection and Affordable Care Act.

In part, it’s because the uncertainty and higher costs that employers are feeling with their employee-health benefits could push more of them to some form of self-insurance.

“Most of the mandates of the healthcare reform weigh more heavily on the fully funded industry,” Anthony Mistretta, an attorney with the Pittsburgh-based HM Insurance Group Inc., told an audience of self-funded employers and vendors at a preconference session at the 30th annual national meeting of the Self-Insurance Institute of America Inc. in Chicago earlier this month.

“I think there’s going to be some opportunities,” he said, explaining that perhaps mid-size and smaller employers that currently purchase health insurance could instead turn toward self-insurance.

Opportunities could come about simply because the status quo might become unbearable or impossible for employers. Employers could be finding the process of grandfathering in their current benefits plan under the new law like having “tied their hands” in terms of plan design and cost savings, as Mark T. Hopkins, senior director of compensation and benefits at manufacturer Mohawk Industries Inc., discovered.

“We basically threw grandfathering out the window,” Hopkins said.

It could seem like a big hassle to have to completely rethink and redesign benefit programs.

On the other hand, employers could take the sunny-side approach and view healthcare reform as a one-time opportunity, as Jay Anliker, president and CEO of third-party administrator UMR, put it.

This could especially be the case for employers that may have never considered self-insurance.

What’s more, benefit brokers are reporting that health carriers are reducing or eliminating their commission schedules to meet the requirements of the minimum-loss ratios in the healthcare-reform law, said Jerry Castelloe, regional president of independent benefits administrator CoreSource Inc.

The country’s largest employers appear to be holding their breath for that clarity. By his estimates, Joe Plumeri, chairman and CEO of Willis and keynote speaker at the conference, said about 98% of Willis clients are not doing anything about healthcare reform yet because they don’t understand it.

Editor’s Note: Agents that  survive in the group health insurance market will be those who focus advising self-funded employer groups on a fee basis. This will entail more than just getting a quote and presenting it to a prospect. It will take a successful agent to have the industry connections necessary to assist in all aspects of a self funded plan, from administration, provider reimbursement expertise couple with direct contract negotiaions with targeted members of the medical community, access to quality stop loss carriers, relationships with captives, and an array of other important components of a cost effective self-funded health care plan. The day of selling a plan off a spreadsheet will gone.

NEW YORK (Reuters) —Health insurer Humana Inc. posted a sharply higher third-quarter profit that blew past Wall Street targets on Monday, helped by lower medical costs, and it projected growth in its Medicare plans next year.

 Humana, which is highly dependent on its Medicare plans for the elderly, also raised its full-year earnings forecast.

The stock has been a more popular pick than those of rivals this year. Investors have become more comfortable with the outlook for Medicare after the passage of the U.S. health care reform law, while changes affecting plans for individuals and small businesses are keeping Wall Street on edge.

November 2, 2010

Texas Mutual Insurance Co. announced a $788,170 dividend to the Texas Medical Group (TMG). The workers’ compensation purchasing group dividend was based largely on TMG’s loss ratio.

TMG has earned $1,726,338 in Texas Mutual dividends since 2008. By committing to workplace safety and helping injured workers return to productive employment, TMG members improve their chances of qualifying for future dividends. Past dividends are not a guarantee of future dividends.

In addition to potential dividends, TMG members get a discount on their workers’ compensation premium. They also have access to free safety materials, including online videos, pamphlets, videos, DVDs and an industry-specific safety plan.

Any licensed Texas agent can submit qualifying clients for consideration in TMG.

Source: Texas Mutual Insurance Co.

By Patricia Zengerle
November 2, 2010

Republicans have vowed to repeal and replace President Barack Obama’s healthcare overhaul — or at least obstruct many of its provisions — if they win control of Congress on Tuesday.

National polls show voters are evenly divided on the law dubbed “Obamacare” by its opponents.

Here are some questions and answers about the law’s future:

WILL REPUBLICANS HAVE THE VOTES TO REPEAL?

It will be very difficult, if not impossible, for Republicans to make good on their promise to repeal the healthcare law.

Polls show Republicans are likely to take control of the House of Representatives in the Nov. 2 congressional elections with Democrats hanging onto the Senate..

That makes it unlikely for Republicans to pass any measures to repeal or change the law since both the House and the Senate must agree on any final legislation. Even if Republicans were to win the 60 seats needed to control the Senate, Obama would most likely veto any repeal.

It takes a two-thirds majority in both the House and Senate to override a veto — 290 votes in the House and 67 votes in the Senate if every member votes. But there are not enough seats up for grabs on Nov. 2 for the Republicans to reach 67 in the Senate, and there is insufficient support among Democrats to support a repeal.

CAN REPUBLICANS STOP HEALTHCARE BY REFUSING TO FUND IT?

They can try to withhold money needed to administer and enforce the law. But, again, they would need control of both chambers of Congress to pass such measures.

Any attempt to block funding also would require 60 votes in the Senate to overcome procedural hurdles and even then would face the threat of a presidential veto.

WHAT COULD A REPUBLICAN-CONTROLLED HOUSE DO?

It could hold hearings on the impact of the health reforms that may sway public opinion against the law and attract support for Republican-backed changes. Such a complex law is bound to run into implementation problems, and the majority party in the House controls committee hearing schedules.

WHICH PROVISIONS WOULD REPUBLICANS TARGET?

One favorite target is the requirement for employers to offer healthcare insurance to employees or pay a tax penalty. Another is the requirement that all Americans buy health insurance.

Another plan would be to block planned reductions in benefits under Medicare, the government-funded health insurance for older Americans, or scale back the expansion of Medicaid, the existing government healthcare program for the poor.

WHAT ABOUT THE LAWSUITS?

Some 20 states have launched legal action to overturn the healthcare law, mostly challenging the constitutionality of imposing what they consider unlawful taxes and requiring people to obtain healthcare coverage, a provision known as the ”individual mandate.”

Administration officials and most legal experts say the law will withstand the legal challenge, because the federal government has the ability to levy taxes and the Constitution puts federal government powers above those of states.

Other experts, and opponents of the bill, expect the issue will be considered by the U.S. Supreme Court.

But the case could take years to get to the high court, far longer than the immediate political battle over the bill.

HOW WILL THIS PLAY WITH THE PUBLIC?

Polls generally show Americans evenly divided on the healthcare law, but fewer than half view it favorably.

The Kaiser Family Foundation’s October health tracking poll showed 42 percent of Americans have favorable views of the new law, 44 percent have unfavorable views and 15 have no opinion. However, most said their feelings about healthcare — for or against — are not a dominant factor in how they will vote for Congress or whether they will even go to the polls.

Obama has recently acknowledged that his administration could have done a better job convincing the public about the program’s benefits.

Still, even some Republicans say the plan may become more popular over time if enough Americans begin to feel it benefits them. That would make it more difficult to convince the public to support repealing or scaling back the law.

IS THERE A PRECEDENT?

Yes. In June 1988 Republican President Ronald Reagan and the Democratic Congress passed the Medicare Catastrophic Coverage Act, which was intended to fill gaps in coverage in the government insurance program for older Americans.

It was celebrated as a bipartisan success that would provide new medical benefits for the elderly. However, older Americans had to pay for it, in the form of an extra Medicare premium and a surtax for people over 65 with higher incomes. The tax led to a protest campaign and Congress, in another bipartisan vote, repealed it in 1989.