It was inevitable. When the Patient Protection and Affordable Care Act (PPACA) was signed into law, it expanded access to health insurance to about 35 million Americans. Paying for all those people is going to be a tremendous burden — to health plans, and in turn, to employers — according to Impact of Health Reform on 2011 Health Plan Cost, from Segal, a benefits, compensation, and human resources company.

“It’s all about moving limits,” says Edward Kaplan, Segal’s senior vice president and national health practice leader. “The biggest cost item is extending coverage to dependent children to age 26,” says Kaplan. Insurers estimate the increase to be between 0.1 percent and 1 percent for 2011.

Major health insurers, HMOs, and third party health plan administrators were surveyed. They cover approximately 80 percent of employees enrolled in group health plans.

“For next year, PPOs report costs to be over 11 percent. That’s a 2.5 percentage point jump from 2010,” says Kaplan. Up to two of those percentage points are attributable to health reform. Almost all insurers will see an increase in costs because dependent eligibility was raised to age 26, Kaplan says. Insurers would generally pass along those additional costs to employers.

Kaplan points out that employers provide the following coverage options: single coverage, single-plus-spouse coverage, and family coverage.

There’s no additional premium contribution that the employer collects should an employee’s 24-year old son enroll in the plan. “It’s a pure 100 percent add-on cost for the employer.”

Employers face an administrative burden of verifying the employment status and access to care of that employee’s 24-year-old son.

“It’s a no-brainer that the kid is going back on a parent’s plan, especially if the parent has no contributions, or it’s a richer plan, especially if the 24-year-old is working full-time but has expensive health care coverage. The kid could save $200 a month by enrolling in the parent’s plan,” says Kaplan.

Projected effect on 2011 plan costs

Source: Segal Co.

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There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.