Author Archives: Reeve Conover

Healthcare costs by state

From a recent survey by business insider, an interesting comparison of overall costs by state – including premiums and average deductibles and expenses. Costs continue to rise faster than wages. Interestingly, the state with the highest average income (NEw Hampshire) also has the highest costs- $8,289 per person per year. How did your state fare?

Why people are buying short term medical…

A recent survey by ehealth shows that Consumers are turning to short-term health plans primarily because they cannot afford other options. With the premium costs ranging from $4700-8000 a year in the US, people cannot afford it. Even though these plans do not cover pre-existing conditions, and do not have the comprehensive protections of an ACA (“Obamacare”) policy, “More than 60 percent of respondents to the online poll said that affordability was their main reason for purchasing a short-term plan, compared to just 28 percent who cited the need for temporary coverage as their main motivation.”

More from the report: “Enrollees in short-term plans say they are satisfied with the benefits they receive, although relatively few people actually try to use them.

“Sixty-nine percent said their short-term plans offer coverage for the benefits they value most, yet only 23 percent of enrollees actually received medical care while covered by a short-term plan.

“Of those enrollees, 54 percent made a sick visit to a doctor, and 43 percent received preventive care.  Only 25 percent purchased prescription drugs, and 12 percent made an ED visit.  Only two percent engaged in a hospital outpatient visit and 8 percent required surgery or other serious care.

“Among consumers who received care, 43 percent said they were very satisfied with the results.

Long Term Care Policies in trouble?

Several events this past week are concerning about the financial viability of Long Term Care Policies.

In South Carolina, rate increases filed with the department of insurance last week requested between 143%-259%. The Director of the insurance department turned down those increases, which leads to the second event. In New York, Genworth (the largest writer in the past few years of LTC) announced, after their rate increases were declined, they are halting all new sales in the state.

Note that existing clients will still be serviced.

I am reminded that in 1988, when I was at John Hancock, they rolled out their LTC Policies with much fanfare, and a wizened old agent in the room asked a brilliant question. “How do they know what the claims will be in the future, they have never done this before. What if they underprice it?”

And the future is now here. Clients look at LTC premiums, rightfully balk, and elect life insurance or annuities with Chronic illness riders to accomplish the same basic thing…

“General Electric Co is setting aside one of the largest amounts ever to cover potential losses on policies that provide long-term care in nursing facilities and patients’ homes. But insurance experts are concerned that may not be enough.

GE shocked investors last year when it took a $6.2 billion after-tax charge and said it planned to set aside $15 billion over seven years to cover claims on some 300,000 long-term care policies written more than a decade ago, when actuaries did not yet know how costly the claims would become.

The costs, which far exceeded GE’s estimates, sent its shares tumbling, spurred an investor lawsuit and prompted the U.S. Securities and Exchange Commission to investigate.

Last week, GE provided new details about its insurance and scheduled a “teach in” for Thursday to give more information.

GE’s new reserves amount to about $55,000 per policy, in line with those of other long-term care insurers, according to an analysis for Reuters by Audit Analytics, an independent research company based in Massachusetts.

“For comparison, Humana Inc has set aside $77,282 per policy, while Unum Group has set aside $10,614, Audit Analytics said.

Can selling across state lines work?

The Washington Post reports that “The Trump administration is seeking ways to allow more health insurance plans to be sold across state lines — an effort that could involve implementing a part of the Affordable Care Act the Obama administration left untouched.

“The Centers for Medicare and Medicaid Services invited insurers and other stakeholders to give input over the next 60 days on how to “eliminate regulatory, operational and financial barriers to enhance issuers’ ability to sell health insurance coverage across state lines” in a request for informationissued yesterday afternoon.”

The problem, IMHO, is two-fold. Rates vary state to state because different states have different mandated benefits, the people in their pool have varying levels of health, and the costs for healthcare vary greatly state to state.

As an example, a hernia repair in Iowa averages $6900, while in NY it is 15% higher at $7900. Would your insurance bought in another state pay the local usual and customary rate? if so you will have $1000 uncovered, and MD’s might drop the plan due to lower reimbursement rates. OR would they pay the higher rate, therefore having to raise the premiums to cover these higher costs?

And if the rates all rise to meet the more expensive costs of healthcare, what have we accomplished? This is a very complicated topic, and sound bites on the nightly news are not solutions. Our system remains badly broken and in need of a comprehensive solution – one that actually controls costs, doesn’t drive physicians away, provides americans with access to care, and at a reasonable cost.


United and Quest move to improve, simplify, your experience

UnitedHealthcare is growing its national network of participating laboratory providers and launching an innovative value-based approach to laboratory services focused on ways to create more personalized care recommendations and a simpler consumer experience for the more than 48 million people it serves. We have renewed our long-term strategic agreement with LabCorp, and we are establishing an expanded relationship with Quest Diagnostics. LabCorp will continue to serve as our exclusive national laboratory provider until Jan. 1, 2019;1 Quest will be available as a network provider for all plan participants beginning Jan. 1, 2019.1 UnitedHealthcare will collaborate with both providers on a variety of value-based programs, bringing the same type of aligned incentives and enhanced patient experience to lab services that exist today in accountable care arrangements between UnitedHealthcare and more than 1,100 hospitals and 110,000 physicians. These expanding relationships will strategically change the way we support the health care needs of consumers by using real-time data sharing to better anticipate people’s care options – and reducing gaps in care – similar to the model UnitedHealthcare already uses to integrate medical and pharmacy data.

August 2019
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Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA.
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