Screwing the Pooch

[Welcome Industry Radar readers!]

I’m normally fairly circumspect when writing these blogs, but this time I may make an exception. I’m pissed. Blue Cross of California (shortly to be known as Anthem Blue Cross) just announced rates for their Small Business plan focal renewal. These will also be the base (aka "standard") rates for both new business and for renewals from May 1 forward. (Before all California readers panic, the focal renewal only applies to plans originally purchased prior to December 2003. Plans purchased after that won’t see these increases until their normal annual renewal. This also only applies to the Small Business plans, not individuals or groups with more 50 employees)

A bit of background…After years of incessant price increases, Blue Cross announced last November that the average January rates would decrease by roughly 5%. HSA policies would stay flat. Amazing. Finally a bit of stability in this slightly insane business. Needless to say, quite a few clients switched to Blue Cross.

Roll tape forward to now, roughly six months later. Average rate increase statewide: 15.4%. Average increase for HSA and HIA plans: 25.4%. Increase for their most popular plan, the Luminos 1500 HSA plan (and the one I'm on!)? A breathtaking 32%.

Thanks guys.

The increase for the Luminos 1500 wasn’t a surprise. The magnitude is. There's a good reason that it’s one of their most popular plans…it’s the best plan for the premium dollar, and with a low out-of-pocket maximum, it’s even a better deal if a serious medical condition is present. That was obvious to anybody who looked at the plan design. But if that was the case, why hold it at ZERO increase in January, and then go up 32% five months later????

What precisely changed? Is the actuarial department that out to lunch? Or are we looking at marketing games?

The same question applies (although not quite as bad) to their traditional PPO and HMO plans. To go from a 5% decrease to a 12% increase is disconcerting. A carrier should be able to forecast better than that. The typical excuses: The aging of the population causes increased utilization. There are increases in the cost of medical technology. Drug prices went up again. All are true. But we’re talking about a five month period here. And how did these last five months differ from the preceding period, where the rates were held stable and/or declined?

Stability and predictability is incredibly important. I have clients who switched to HSA plans that will now have their budgets completely blown….even after I advised to factor in a 12-15% annual increase in benefit expense. Goodwill generated by the rate decrease just vanished in a large cloud of oily smoke. I think I’m going home and work in the garden.

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Screwing the Pooch

[Welcome Industry Radar readers!]

I’m normally fairly circumspect when writing these blogs, but this time I may make an exception. I’m pissed. Blue Cross of California (shortly to be known as Anthem Blue Cross) just announced rates for their Small Business plan focal renewal. These will also be the base (aka "standard") rates for both new business and for renewals from May 1 forward. (Before all California readers panic, the focal renewal only applies to plans originally purchased prior to December 2003. Plans purchased after that won’t see these increases until their normal annual renewal. This also only applies to the Small Business plans, not individuals or groups with more 50 employees)

A bit of background…After years of incessant price increases, Blue Cross announced last November that the average January rates would decrease by roughly 5%. HSA policies would stay flat. Amazing. Finally a bit of stability in this slightly insane business. Needless to say, quite a few clients switched to Blue Cross.

Roll tape forward to now, roughly six months later. Average rate increase statewide: 15.4%. Average increase for HSA and HIA plans: 25.4%. Increase for their most popular plan, the Luminos 1500 HSA plan (and the one I'm on!)? A breathtaking 32%.

Thanks guys.

The increase for the Luminos 1500 wasn’t a surprise. The magnitude is. There's a good reason that it’s one of their most popular plans…it’s the best plan for the premium dollar, and with a low out-of-pocket maximum, it’s even a better deal if a serious medical condition is present. That was obvious to anybody who looked at the plan design. But if that was the case, why hold it at ZERO increase in January, and then go up 32% five months later????

What precisely changed? Is the actuarial department that out to lunch? Or are we looking at marketing games?

The same question applies (although not quite as bad) to their traditional PPO and HMO plans. To go from a 5% decrease to a 12% increase is disconcerting. A carrier should be able to forecast better than that. The typical excuses: The aging of the population causes increased utilization. There are increases in the cost of medical technology. Drug prices went up again. All are true. But we’re talking about a five month period here. And how did these last five months differ from the preceding period, where the rates were held stable and/or declined?

Stability and predictability is incredibly important. I have clients who switched to HSA plans that will now have their budgets completely blown….even after I advised to factor in a 12-15% annual increase in benefit expense. Goodwill generated by the rate decrease just vanished in a large cloud of oily smoke. I think I’m going home and work in the garden.

Read More

Good News, Bad News, So What?

Full disclosure: my mother has Alzheimer's Disease, which has been growing steadily worse over the past couple of years (no surprise there). As one may imagine, this is a source of both pain and compassion, and has been a difficult journey for those who love her.

And just as folks whose loved ones have succumbed to cancer, there's always the nagging question: am I destined for this, as well? Since no definitive cause has been found, there's not a lot that can be done to head this off, if it's meant to be. Children of alcoholics worry whether they're succeptible to the ravages of that addiction; abstinence is, of course, an easy enough prevention strategy. Unfortunately, when it come to Alzheimer's, from what can one abstain to avoid that? Apparently, not much (yes, there's talk of a link between aluminum and Alzheimer's, but that's far from settled science).

Still, wouldn't it be worthwhile knowing if one might be more sucseptible than one's neighbor?

That's the question that Smart Genetics, a Pennsylvania-based "genetic risk assessment service." The company is set to begin processing "saliva samples for the only known genetic risk factor for late-onset Alzheimer's, which begins after age 65 and represents at least 90% of all cases of the disease." The idea is to see if one has a predisposition toward the disease. One presumes that there are safeguards in place regarding false positives and the like, but that's not the real issue.

Okay, Henry, what is the "real issue?"

Well, when one considers that we don't know what actually causes Alzheimer's, nor is there a "cure" (yet), then what does one do with the information if one "tests positive" (for lack of a better term)?

Professor David Goldstein, who teaches genetics at Duke University, nutshells it thusly:

"It's bad news you can't do anything about."

So the dilemna is really whether or not to send SG a saliva sample and a check for $400. They'll happily and promptly process your DNA, and let you know the results.

The question then becomes: Do I really want to know?

Read More

Good News, Bad News, So What?

Full disclosure: my mother has Alzheimer's Disease, which has been growing steadily worse over the past couple of years (no surprise there). As one may imagine, this is a source of both pain and compassion, and has been a difficult journey for those who love her.

And just as folks whose loved ones have succumbed to cancer, there's always the nagging question: am I destined for this, as well? Since no definitive cause has been found, there's not a lot that can be done to head this off, if it's meant to be. Children of alcoholics worry whether they're succeptible to the ravages of that addiction; abstinence is, of course, an easy enough prevention strategy. Unfortunately, when it come to Alzheimer's, from what can one abstain to avoid that? Apparently, not much (yes, there's talk of a link between aluminum and Alzheimer's, but that's far from settled science).

Still, wouldn't it be worthwhile knowing if one might be more sucseptible than one's neighbor?

That's the question that Smart Genetics, a Pennsylvania-based "genetic risk assessment service." The company is set to begin processing "saliva samples for the only known genetic risk factor for late-onset Alzheimer's, which begins after age 65 and represents at least 90% of all cases of the disease." The idea is to see if one has a predisposition toward the disease. One presumes that there are safeguards in place regarding false positives and the like, but that's not the real issue.

Okay, Henry, what is the "real issue?"

Well, when one considers that we don't know what actually causes Alzheimer's, nor is there a "cure" (yet), then what does one do with the information if one "tests positive" (for lack of a better term)?

Professor David Goldstein, who teaches genetics at Duke University, nutshells it thusly:

"It's bad news you can't do anything about."

So the dilemna is really whether or not to send SG a saliva sample and a check for $400. They'll happily and promptly process your DNA, and let you know the results.

The question then becomes: Do I really want to know?

Read More

Health Wonk Review is up!

Hosted by Workers Comp Insider's Jon Coppelman (sitting in for the lovely Julie Ferguson), this week's edition features some 16 posts, ranging from "terror pills" to AIDS in Africa. Check it out.

I decided a while back not to sell Medicare D plans, but I've kept my hands in the "regular" MedSupp marketplace. Over at the Health Care Law Blog, David Harlow takes a behind-the-scenes look at Medicare Advantage plans. Interesting reading.

Read More

Health Wonk Review is up!

Hosted by Workers Comp Insider's Jon Coppelman (sitting in for the lovely Julie Ferguson), this week's edition features some 16 posts, ranging from "terror pills" to AIDS in Africa. Check it out.

I decided a while back not to sell Medicare D plans, but I've kept my hands in the "regular" MedSupp marketplace. Over at the Health Care Law Blog, David Harlow takes a behind-the-scenes look at Medicare Advantage plans. Interesting reading.

Read More