Obamacare Enrollees Face Growing Out-of-Pocket Costs

Source: CaliforniaBroker

StethoscopeObamacare enrollees were already warned to prepare for double-digit rate hikes. Now, the structure of Obamacare’s tax credits is ratcheting up the out-of-pocket costs of premiums – especially for the lowest earning enrollees, according to a report by National Center for Policy Analysis senior fellow John Graham. “This ratchet effect on the out-of-pocket cost of premiums is greatest for the lowest earning enrollees [who are] only slightly above the federal poverty level. Some of them will see hikes of 50% or more. What’s behind this ratchet effect? Obamacare’s tax credits are determined by an enrollee’s income and the second-least expensive Silver plan in the locating region. This introduces harmful leverage into most enrollees’ renewal, which can increase the net premium by a significantly higher percentage than the increase in gross premiums. If every single enrollee who chose the second-lowest cost Silver plan in 2015 took the time to shop around and found the second-lowest cost Silver plan, which is usually different, the average gross premium hike would be 7.5%. This is an unlikely, best-case scenario, given enrollees’ behavior renewing from 2014 to 2015,” says Graham.

Numerous reports of double-digit rate hikes in Obamacare’s health insurance exchanges understate the increases most consumers are facing. The gross premium for the average Silver plan increased 10%. However, the subscriber earning 150% of the Federal Poverty Level has seen a 28% increase in net premium. “This is because of the perverse way tax credits are allocated to insurers in the exchanges. This ratchet effect explains why subscribers are more outraged by premium hikes than Obamacare’s advocates appreciate,” says Graham. For more information, visit http://www.ncpathinktank.org/pub/most-obamacare-enrollees-will-pay-more-in-2016

Healthcare is a Top Concern for Small Businesses

While 76% of small business owners are stable or improving in the economy, more than half have concerns about weaker economic times ahead, according to a survey by Dealstruck. Small business owners agree that the most pressing issues in 2016 are taxes (56%) and healthcare (46%). And while 72% of liberal business owners say that the minimum wage does not affect their business and is too low, a surprisingly high percentage of conservatives agree. Only 20% of conservative business owners say that the $7.25 minimum wage is too high.

Small businesses are generally feeling positive about their own growth and the economy, but are not applying for SBA financing (only 6% of respondents have ever applied), and 57% have concerns about their economic future. Millennial small business owners are faring better (95% are stable or improving), are more likely to have applied for SBA financing (16%), and are less concerned about the economy in the near term (47%).

Small business owners are generally not affected by the Affordable Care Act (ACA) and are not opposed to its continuation. Fifty-three percent say the ACA will not affect their businesses; 18% expect a positive effect; and 45% say it should be maintained (16% have no opinion). Twenty-six percent of Millennials (under 30) say that the ACA has had a positive effect on their businesses. Still, more than half of small businesses don’t offer healthcare to employees. For more information, visit https://www.dealstruck.com.

Webinar Tomorrow Covers Heath Innovations and Opportunities

Frost & Sullivan is sponsoring a Webinar on on Thursday, February 4, 2016 at 7:00 a.m. PST

The webinar will cover predictions including merger and acquisitions (M&A), partnerships, and areas of growth and controversy in 2016. It will also cover new data about how consumers will use digital health tools. To attend, email Kayla Belcher at kayla.belcher@frost.com and provide your full name, job title, company name, company telephone number, and company email address, website, city, state and country or click here: http://frost.ly/16.


Auto Insurance for Low Income Households

Income-eligible Californians can now apply online for the state-sponsored California Low Cost Automobile Insurance Program at mylowcostauto.com. The annual premiums in California vary by county, ranging from $241 to $556. There are discounts if the consumer is a licensed driver with a good driving record for three consecutive years. Last year, a new law by Senator Ricardo Lara (D-Bell Gardens) made it easier for newly licensed drivers, including those with AB 60 licenses to qualify for this affordable coverage. Applicants must have a valid California driver license, own a vehicle valued at $25,000 or less, and be at least 19 years old. Income eligibility requirements per household are $29,425 for one person and $60,625 for a family of four.

Minorities Had Lower Risk of Coronary Heart Disease Than Whites 

Blacks, Latinos, and Asians had lower risks of coronary heart disease compared to whites, according to a 10-year study of Kaiser Permanente members in Northern California. The findings echo those of a 2014 study published in the New England Journal of Medicine. That study looked at racial disparities between black and white Medicare beneficiaries covered by Kaiser Permanente in the western United States. Disparities have been nearly eliminated for cardiac risks and diabetes markers, even as these disparities persist among patients in managed health care systems in other regions. Blacks, Latinos, and Asians without a prior history of coronary heart disease have a lower risk of coronary heart disease compared to whites, regardless of whether they also have diabetes.

Among members with prior coronary heart disease and no diabetes, blacks had slightly increased risk of future heart disease compared to whites. However, no such increased risk was noted in the highest risk group with prior history of heart disease and diabetes. Latinos did not have any difference in risk compared to whites in of these groups, and Asians had decreased risk. For more information, visit www.dor.kaiser.org or follow us @KPDOR.

Workers Comp Transitions to Outcomes-Based Care

The State Compensation Insurance Fund will soon transition to a new outcomes-based Medical Provider Network (MPN). The California Division of Workers’ Compensation (DWC) recently gave its stamp of approval to the new MPN called the State Fund MPN by Harbor Health. Set to launch this month, the State Fund MPN by Harbor Health is comprised of doctors with track records of effectively treating workplace injures through evidence-based medicine. Established in 1914, by the state legislature, State Fund is California’s largest provider of workers’ compensation insurance.


One In Five Baby Boomers Has No Retirement Savings

While the economy is bouncing back from the recession, Baby Boomers may have lasting consequences. New research from Mintel reveals that 20% of Boomers do not have any retirement savings. What’s more, 41% Baby Boomers have less than $250,000 saved for retirement. There are still concerns among Boomers who have been relatively good about saving, with more than $250,000 stashed away. Fifty-two percent are worried about having enough money to retire. Thirty-one percent are worried about outliving their money. Fifty-five percent of non-retired Boomers contribute regularly to a retirement savings account. These concerns are driving some Boomers to put off retirement with 15% saying that they do not plan to retire. This could be the result of Baby Boomers’ lack of education on retirement savings. Mintel research indicates that just 28% of Boomers say they understand enough about retirement investing compared to 11% of Boomers who have saved less than $100,000. Additionally, only one in 10 Boomers manage their finances according to a written financial plan, and 33% use a financial adviser to help with planning and investing. Only 10% of Boomers say they do not have financial concerns about life in retirement.

Boomers agree that major retirement concerns include having adequate health insurance (30%), paying for health insurance (29%) and paying day-to-day bills (29%). The youngest Boomers age 51 to 54 are significantly more likely than Boomers to be worried about having enough money to retire (66%) and paying day-to-day bills (39%). One solution is to engage Boomers in wellness programs. For more information, visit www.mintel.com.


Life Insurance Organization Offers Scholarships

Life Happens is accepting applications for its annual Life Lessons Scholarship Program. The scholarship, now in its 12th year, provides financial assistance to students who are pursuing a higher education following the death of a parent or legal guardian who did not have life insurance. Life Happens will award over $250,000 in scholarship money to 31 students, ranging from $5,000 to $15,000. To be considered for a scholarship, applicants must submit a 500-word written essay or three-minute video that describes how their lives have been affected, both emotionally and financially, by the death of a parent or guardian. Life Happens will consider applications for its Life Lessons Scholarship Program from students from 17 to 24 who have been accepted to, or are currently enrolled in, a college, university, or trade school, and have suffered the loss of a parent or legal guardian. This year, the organization will award 31 scholarships, with four of the recipients receiving grand scholarships of $15,000. Interested candidates must submit an application online at www.lifehappens.org/scholarship. Applications will be accepted between now and March 1, 2016 at 4:00 pm Eastern Time. To learn more about the Life Lessons Scholarship Program, including information on submission guidelines, rules, and the stories of past winners, visit: www.lifehappens.org/lifelessons. All questions regarding the Life Lessons Scholarship Program should be emailed to scholarship@lifehappens.org.


Retirement Plan Review Tool

John Hancock Retirement Plan Services introduced a tool that helps advisors evaluate the health of a retirement plan. Available online, the fully customized Plan Review supports onsite and remote meeting discussions. With Plan Review, advisors can easily analyze a broad range of plan and participant issues. Plan Review capabilities include highlighting under-utilized services and using demographics to target educational opportunities on topics, such as retirement readiness, diversification, and risk tolerance. For more information, visit johnhancock.com.

Fixed Indexed Annuity

Forethought Life Insurance Company is adding an interest crediting strategy to its fixed index annuity (FIA) products: the “BlackRock Diversa Volatility Control Index.” The index will be available for Forethought’s entire suite of fixed index annuity products. The index responds to trends in asset returns, which provides the potential for more consistent returns than a traditional stock index. For more information, visit https://www.forethought.com.

Book Details Replacement for Obamacare  

The book, “The Way Out of Obamacare” offers a blueprint for replacing the Affordable Care Act. It is authored by Pacific Research Institute president, CEO Sally Pipes, and Thomas W. Smith Fellow in Health Care Studies. The plan includes the following:

  • Age-based, refundable tax credits to help all people pay for health coverage, regardless of their income.
  • Greater use of health savings accounts, which allow people to save money tax-free for health expenses.
  • A combination of vouchers and block grants to bring Medicare and Medicaid spending under control.

“The Way Out of Obamacare” is available on Amazon.

Short Term Medical       

National General Insurance is offering short term medical plans, simplified and guaranteed issue. These plans are new for broker sale, particularly in California. Sold nationally, IntellaBridgeCare plans offer a choice of deductibles and coinsurance tailored to fit all budgets and lifestyles. Plans include preventive coverage (copays, coinsurance and deductibles apply), access to a large PPO network, co-insurance levels from 50% to 100%, and child-only plan options. Plans are underwritten by National Health Insurance Company. Benefits and availability may vary by state. Guaranteed issue is not available in California.  For more information, contact Kellie Bernell at Kellie.Bernell@NGIC.com or 805-341-7843.

Variable Annuity Lifetime Income Riders

For the second time in six months, Nationwide will increase payouts to two of its variable annuity lifetime income riders. Starting February 1, 2016, payout percentages for the Nationwide Lifetime Income Rider and Nationwide Lifetime Income Capture living benefit riders increased 10 basis points. The rate increases will be available on all new variable annuity contracts. Nationwide’s lifetime income riders provide some of the highest guaranteed lifetime income payouts in the industry, according to Nationwide. They will not decrease, even if the contract value drops to zero. For more information, visit livingbenefits/nationwide.com or call 800-321-6064.

Life Policies For Executives          

MassMutual is introducing two universal life insurance policies through the workplace to help employers retain key talent by providing executives with greater financial security. The new Executive Group Life fixed and variable insurance policies offer executives and highly compensated employees the potential to secure higher death benefits than typically available through group term life insurance policies. Premiums for the policies, which are sold exclusively through the workplace, can be employer-paid, voluntary, or contributory. Additional premiums can be paid to potentially accumulate account value. The new policies are available to executives, partners, and associates of professional firms, and employees with non-hazardous occupations earning a minimum annual salary of $100,000. Available death benefits range $50,000 to $3 million per employee with special consideration given for those who may benefit from higher coverage amounts. For more information, visit massmutual.com.

HSA Consulting Services Expands Capabilities and Expertise 

Roy Ramthun, the founder of HSA Consulting Services, as rejoined the firm as president. Paul Verberne will also join as a Principal partner. Mr. Verberne brings a decade of experience in the HSA industry, including as counsel for HSA Bank and Director of Business Development and General Counsel for Tango Health.“We are excited to re-enter the HSA business and look forward to helping both new and veteran businesses capitalize on the new wave of interest in Health Savings Accounts,” said Ramthun. Verberne said, “We are particularly excited about sharing our knowledge of the HSA rules through our “HSA Expert” certification program. The firm manages AskMrHSA.com. New “HSA Expert” online training classes will be held starting February 22. For large groups. For more information, visit www.AskMrHSA.com.

Privacy Software             

Guidance Software unveiled EnForce Risk Manager. The software allows companies to identify their most commonly compromised data anywhere it is stored, including file shares, email sources, servers, databases and all types of end points. They can categorize that data for review and validation, and automatically remediate that data through digital removal and other control actions. For more information, visit: http://www.legaltechshow.com.