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Covered California, the state's health benefit exchange, yesterday announced a rate structure for its health insurance plans that came in at a much more affordable price than first projected.

That was great news for exchange officials and it accounted for much of the pomp around that rare circumstance during yesterday's announcement.

"This is really a great day for California," said Diana Dooley, secretary of the state's Health and Human Services agency and chair of the Covered California board. "We have come a long way and we have a long way to go," she said. "We are moving to make Californians healthier and give them the financial security they need."

At the same time, the exchange also needed to announce that premiums would increase for many people who don't qualify for federal subsidies. In the case of Blue Shield of California, the average base rate will increase 8% and the overall rate increase will total 13%, according to Blue Shield's president and COO, Paul Markovich.

"People are going to have a change in rates," Markovich said. "On average, our members will experience an 8% increase. That's an 8% core cost. Including fees and taxes and higher benefits, that becomes 13%. That's a Blue Shield-specific number."

That left exchange officials in a somewhat awkward spot, needing to announce that premiums would rise but as much as expected.

"We looked a lot at the rates. And all the predictions have been that rates are going to skyrocket," said Peter Lee, executive director of Covered California. Rates are going up at a far lower rate than the Milliman study predicted they would, Lee said, referring to a study commissioned by the exchange board, in part, to estimate premium cost.

"What we've heard again and again is that Californians want to protect their families."

That's where possibly the greatest benefit of the exchange comes in: Not  only will the number of covered people rise and include Californians with pre-existing conditions, but the level of essential benefits is much higher than it has been in the individual and small-group markets.

"No marketplace has been more dysfunctional than this [individual and small-group health insurance] market," said Betsy Imholz, director of the West Coast office at Consumers Union. "With all of the exclusions and gimmicks and gotcha's, to date I would say it's been a pretty messy marketplace."

That now has changed, Imholz said.

"This is a significant step toward fixing that problem," Imholz said. "By Oct. 1, consumers can shop around and see what all of the options are. If there's one takeaway message here, it's that people now know they can come to Covered California and get affordable, quality health insurance. … So consumers don't have to dread the prospect of getting health insurance."

"Across the nation, we've heard the gloom and doom pronouncements, of how premiums were going to rise dramatically," Lee said. "But the big news today is, we've hit a home run for California consumers … to offer high-quality health insurance at affordable rates for Californians."

Lee said Covered California would announce health plans and rates for the small business market sometime in June.

(Yahoo Finance) Orange, CA. - A new booklet designed to help California employers understand and prepare for the dramatic changes being brought about by health reform is now available to business owners throughout the state, free of charge. It can be obtained by contacting marketing@choiceadmin.com.

The booklet has been prepared by The Word & Brown Companies, CHOICE Administrators® Exchanges’ parent company and the nation's leading developer and administrator of consumer-choice health insurance exchange models.

“Our goal is to provide simple answers to health reform’s complex issues so that employers better understand the principal changes that are coming about,” said CHOICE Administrators President Ron Goldstein. “It is important that employers get ready for these changes, take advantage of new tax benefits and tax credits, and prepare for the new employer requirements as established by law.”

One of the most significant aspects of health reform, as discussed in the new booklet, is the mandating that every state establish a health insurance exchange by January 1, 2014. Such programs promote choice and make health insurance more affordable by allowing an individual or small business to compare the costs and benefits of various health plans while accessing available subsidies and tax credits.

CHOICE Administrators has been successfully operating such exchange models since 1996; and its flagship product, CaliforniaChoice®, is America’s oldest and most respected healthcare exchange for the small and mid-size employer market. “This experience provides us with a unique view on the future of the marketplace, and that perspective is a big part of what we want to share with employers through this Health Reform Guide,” said Goldstein.

The new guide also provides answers to such questions as “Will my current health plan benefits change?”... “Will I pay more or less for insurance coverage?” ... “Will I be required to provide employees with health insurance?” In addition, the guide includes a simple time line of “What happens when ...” along with the “10 things every employer should know about health reform.”

Goldstein recognizes that a great many parts to the new legislation have yet to be worked out, with many awaiting procedural guidelines from various government agencies, including the state. So while he believes that it’s not too soon for employers to become educated and aware of the changes, he strongly urges that employers work with a licensed health insurance broker to help in the process.

“Ultimately working with a licensed and trusted broker is the best way to make sure that business is properly prepared for the new realities. Brokers can also answer any questions regarding changes to benefits, how to select the right health plan, and how to keep your employees and your business healthy and strong,” he says.

www.choiceadmin.com

BizPlan, a medical reimbursement plan based on Internal Revenue Service Code Section 105, has helped tens of thousands family farmers and small business owners receive 100 percent deductibility of their family medical expenses for over 30 years. In 2008, the average BizPlan client had a total tax savings related to their healthcare premiums and out-of-pocket medical expenses of $4,031.

Every year, TASC, the third-party benefits administrator of BizPlan, collects medical expense information from clients as part of the adjudication process, which is a necessary step to ensure compliance with IRS regulations. TASC checks the eligibility of each expense and ensures that each BizPlan client has stayed within the limits they pre-set for their Plan.   

Thanks to this system, TASC is able to track the costs of health care for nearly 30,000 small business owners and their families.  Those findings reinforce those of countless other studies: the cost of health insurance has increased dramatically over the years.  In 2001, the BizPlan client paid $4,576 on average a year for their family’s health insurance.  By 2008, that average had risen to $6,719 a year, an increase of nearly 47%.  

In 2001, the average BizPlan client reported $3,236 in uninsured medical expenses. By 2008, that average had jumped to $4,719, an increase of  46%. When added to their health insurance premium, the total healthcare costs for BizPlan clients grew from $7,812 annually in 2001, to $11,516 in 2008, an increase of 47%. 

BizPlan clients use a legitimate, proven plan to reduce their medical debt, which reduces the financial strain of increasing medical costs on the family budget. Those without BizPlan can deduct 100 percent of their medical insurance premiums on their Federal taxes only. BizPlan clients experience a 100 percent deduction of their medical premiums and non-insured medical expenses on their Federal, State and Self-employment taxes.

The moral of the story?  Enroll in BizPlan as soon as possible.  BizPlan has a solid history of being a reliable hedge against the rising costs of healthcare.

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While many people are aware the cost of healthcare continues to rise, they might be surprised to learn just how significantly costs increase each year. According to the Kaiser Family Foundation in their March 2009 Trends in Health Care Costs and Spending, health insurance premiums have consistently grown faster than inflation or workers earnings in recent years. This report gives us the startling statistic that between 1999 and 2008, the cumulative growth in health care insurance premiums was 119%, compared with cumulative inflation of 29% and cumulative wage growth of 34%.

The figures cited above do not take into account the added cost of non-insured health care expenses which families pay for out of their pockets. Examples of out-of-pocket expense are deductibles, co-payments, and over-the-counter medications.

In a Kaiser Health tracking poll conducted in February 2009, one in five families reported serious financial problems due to family medical bills. Consider some of the other finding of this poll.

· 21% did not fill a prescription for medicine

· 23% skipped a recommended test or treatment

· 27% put off or postponed getting health care they needed

· 35% relied on home remedies or over-the-counter drugs instead of going to see a doctor

Is there a better way to reduce the cost of healthcare without reducing or eliminating healthcare itself?

-- David Hecker, Longview TX Insurance Agent

The number of individual health insurance policies that do not include maternity coverage has risen dramatically in recent years, prompting concern among consumers and a legislative effort to require California insurers to include the benefit.

About 805,000 Californians have insurance policies that specifically exclude maternity coverage - a number that has more than quadrupled from 192,000 in 2004, according to the California Health Benefits Review Program, which provides independent analysis of proposed health insurance benefits mandates.

"You see this tremendous jump in just a few years. That's where we're going with this," said Assemblyman Hector De La Torre, D-South Gate (Los Angeles County), whose bill to require maternity coverage is headed to the Assembly Health Committee today. Insurance companies are "pushing these policies clearly onto people, and people are making their decisions based solely on dollars and cents."

As more people lose their jobs - and along with that, their health insurance benefits - an increasing number are expected to turn to the individual health insurance market for coverage, an option that is usually less expensive than paying to stay on their former employers' health plans.

De La Torre's bill, AB98, would require all health insurance products regulated by the state Department of Insurance to include maternity benefits. Gov. Arnold Schwarzenegger vetoed a similar bill authored by De La Torre last year as well as one introduced in 2004 by then-Sen. Jackie Speier, D-Hillsborough.

Health insurers and consumers who support the right to buy a policy that excludes maternity benefits say they shouldn't have to pay for a service they have no intention of using. They say requiring such coverage would increase premiums and force more people to go without insurance.

"Clearly there are a number of people out there who don't think they need or want a maternity benefit at this point in their lives and recognize there is a significant reduction in costs associated with this," said Ben Singer, spokesman for Anthem Blue Cross, which covers about half of the individual policyholders in the state who do not have maternity coverage. Singer said requiring the benefit could increase premiums by as much as 107 percent for some members.

Shared risk

Supporters of the mandate, however, argue that denying coverage is unfair to women and that, in exchange for an average $7.17, or 4.24 percent, increase in monthly premium price per individual policyholder, society would save money if fewer women were on government-supported programs.

De La Torre argued that excluding maternity flies in the face of the insurance philosophy of shared risk. "Why do women pay for prostate cancer? Why do men pay for breast cancer? Because that's the whole point of insurance," he said.

The controversy is limited to individual insurance coverage because group policies, those provided by an employer or group, include maternity benefits. Health maintenance organizations, or HMO plans, are required by the state to have maternity coverage, but preferred provider organization, or PPO, service plans are free to exclude the benefit.

People who buy individual plans typically do not have access to group coverage. They can be self-employed, work for an employer that does not provide health insurance or simply choose such policies as the most affordable options.

But with the growing popularity of such policies without maternity coverage - such as Anthem Blue Cross' low-cost Tonik plans, which are geared toward young adults - finding an affordable individual plan with the coverage can prove to be a daunting task.

No good options

When Wendy Root Askew of Monterey started looking for a doctor she hoped would be her gynecologist as well as deliver her future children, she was shocked to discover her health insurance policy didn't include a single OB/GYN in her county.

The 31-year-old considered changing health plans. But then she learned that while 85 percent of the plans available in Monterey County offered maternity coverage five years ago, just 15 percent offer it now.

She found only two individual policies that included maternity, but they were three to five times as much as the policy she already had and came with annual deductibles of up to $15,000.

"Who's going to be buying policy with a $10,000 or $15,000 deductible? Clearly only those women who are intending to use the service," said Askew, who went from running her own business to working for an employer that offers group health insurance. She said she made the decision in part because the job offered comprehensive health benefits.

Health insurers are not uniformly against mandating maternity benefits. Kaiser Permanente, which as an HMO is required to include maternity, has supported maternity mandates along with Blue Shield of California, which has come out in favor of De La Torre's bill. The California Association of Health Plans has not taken a position, while another insurance trade group, the Association of California Life & Health Insurance Companies, publicly opposes the bill.

Higher individual rates

Several states, including Massachusetts, New Jersey and New York, already have laws in place requiring plans to pay for maternity services.

Anthem Blue Cross' Singer said that those states have much higher rates for individual insurance coverage than California.

"The point of insurance is to insure against catastrophic care costs. That's what you're trying to aggregate and pool for such things as heart attacks and cancer," he said. "Having a child is a matter of choice. Dealing with an adult onset illness, such as diabetes, heart disease breast or prostate cancer, is not a matter of choice."

Patricia Bellasalma, president of the California National Organization for Women, noted that not all pregnancies are planned. She said some insurance companies are discriminating against women.

"The philosophy of the insurance company on maternity coverage - the only pool of risk takers are women - is that all of the obligations to pay for child bearing is born solely on the woman and not on the man and not on society, which is just outrageous," she said.

Women in California pay an estimated 39 percent more than men for coverage in the individual market. San Francisco City Attorney Dennis Herrera filed a lawsuit against the state in January over the issue. Legislation also has been introduced by state Sen. Mark Leno, D-San Francisco, and Assemblyman Dave Jones, D-Sacramento, to forbid gender rating.