Wellpoint impact of health care reform
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Impact of Health Care Reform on Health Insurance Carrier
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Wellpoint impact of health care reform
- 1. The Impact of 2010 Health Care Reform on Health Carriers WellPoint, Inc. February 6, 2011
- 15. Health Care Reform Requirements Summary
- 28. WellPoint Health Insurance Enrollment and Financials
- 30. WellPoint, Inc. Membership Mix
- 34. WellPoint 4Q2009 PMPM Financials for the Individual Market Segment MLR minimum will be 85% under HCR. WellPoint is well over the new MLR in ME, well under it in NH. Will have to raise it slightly in its best market, VA. It might consider exiting markets where MLR is extremely low or high AND enrollment is very low.
- 35. WellPoint 2009 PMPM Financials for the Medicaid Segment
- 38. Actuarial Focus
- 39. Impact of health reform on insurance enrollment (percent change by year 2010-2019)
- 45. WellPoint, Inc. Case Study
- 46. WellPoint, Inc. Case Study (cont’d.)
- 53. Tools
- 54. Websites – Healthychat.com and media – Twitter / Facebook
Editor's Notes
- Temporary early retiree reinsurance program - Help to make health coverage available to people ages 55 to 65 who are not yet retired (before they can use Medicare. Medicare, a Federal government program that provides health care insurance to people aged 65 years or older, a... more ») through the temporary Early Retirement Reinsurance Program Small group tax credit, effective for tax years beginning after December 31, 2009 - To qualify for the credit, a group must employ not more than 25 employees, and the average annual compensation of those employees cannot exceed $50,000. $250.00 rebate for Medicare members who reached the donut hole Small group employers that establish wellness programs can receive grants for up to five years. This is effective for Fiscal Years 2011 to 2015, so it technically starts in 2010.
- Medicare beneficiaries who reach the donut hole to get a 50% discount on brand-name drugs .
- Individuals making $200,000 or couples making $250,000 would have higher Medicare payroll tax of 2.35% earned income, up form 1.45% Employee contributions for FSAs will be capped at $2,500 annually, with the cap adjusted annually to the Consumer Price Index Medical device manufacturers have 2.9% sales tax on medical devices; with some exemptions like eyeglasses, contact lenses, hearing aids Employers will need to start telling employees about exchanges, premium subsidies and free choice vouchers No more deductions for expenses allocated to Medicare part D subsidy for employers who maintain prescription drug plans for their Medicare Part D eligible retirees
- Employers with 50 or more full-time employees will be required to offer minimum essential coverage. This coverage must have a 60% actuarial value minimum. (Basically, this means the plan covers at least 60% of covered health care costs.) Employers will be subject to penalties if they provide no health coverage to full-time employees or provide coverage that is not "affordable." These penalties will range from $2,000 to $3,000 per employee. There will be separate state-based exchanges for individuals (American Health Benefit Exchanges) and for small groups (Small Business Health Options Program or SHOP). At this time, small group employer tax credits will only be available through the exchange A new fee will be built into the cost of fully insured coverage Guaranteed issue, guaranteed renewability, modified community rating and minimum benefit standards (“essential benefits” plan) effective. A new fee will be built into the cost of fully insured coverage
- There will be a 40% excise tax on high-cost plans -- also known as "Cadillac" plans -- that cost more than $10,200 for single coverage or $27,500 for family coverage.
- Many health insurers will have to lower administrative expenses to meet the new medical loss ratio (MLR) of 85% for the large group market and 80% for the small group and individual market. Currently, many individual and small market plans are not meeting the new required MLR, which governs the amount of premiums allocated to paying medical expenses. • Successful insurers will have to shift their attention from group to individual plans, which are expected to triple between 2010 and 2019. Over the next 10 years, growth in the Medicaid coverage will also increase substantially. • Health insurers will have to differentiate themselves on price, service, quality, and provider network in the insurance exchanges. With regulations requiring four standard benefit packages, essential health benefits, and limits on cost sharing, insurers will have to compete on factors other than benefit design.
- WellPoint is third in the nation in Medicaid enrollment. United is #1 and AmeriGroup is #2. WellPoint has 1.752 million members, 4.7% of the market share.
- The CBO estimates that exchange enrollment, not including employer coverage, will be 24 million in 2019. Figure 11 shows the percentage change in enrollment due to health reform in each year from 2010 to 2019. Enrollment in individual and exchange plans will increase by 190% counting both individual and business exchange enrollment; Medicaid and CHIP increases by more than 40%. During the same period enrollment in employer plans is projected to fall by 8%. This trend will shift business from payers that do well with large employers to those that know how to sell and administer individual insurance.12 The availability of exchange-based insurance options in addition to current employmentbased approaches will generate new opportunities and challenges for payers. To capitalize on these changes, payers will not only want to make sure their product benefits align with the required essential health benefits in the exchanges, but will also need to hone their sales and marketing focus increasingly toward individual and small-group purchasers.
- Many health insurers will have to lower administrative expenses to meet the new medical loss ratio (MLR) of 85% for the large group market and 80% for the small group and individual market. Currently, many individual and small market plans are not meeting the new required MLR, which governs the amount of premiums allocated to paying medical expenses. • Successful insurers will have to shift their attention from group to individual plans, which are expected to triple between 2010 and 2019. Over the next 10 years, growth in the Medicaid coverage will also increase substantially. • Health insurers will have to differentiate themselves on price, service, quality, and provider network in the insurance exchanges. With regulations requiring four standard benefit packages, essential health benefits, and limits on cost sharing, insurers will have to compete on factors other than benefit design.
- Many health insurers will have to lower administrative expenses to meet the new medical loss ratio (MLR) of 85% for the large group market and 80% for the small group and individual market. Currently, many individual and small market plans are not meeting the new required MLR, which governs the amount of premiums allocated to paying medical expenses. • Successful insurers will have to shift their attention from group to individual plans, which are expected to triple between 2010 and 2019. Over the next 10 years, growth in the Medicaid coverage will also increase substantially. • Health insurers will have to differentiate themselves on price, service, quality, and provider network in the insurance exchanges. With regulations requiring four standard benefit packages, essential health benefits, and limits on cost sharing, insurers will have to compete on factors other than benefit design.