Health

Insurers Accelerate Moves to Limit Health-Law Enrollment

Published

9 years ago

February 8, 2016

By Jay Hancock, Kaiser Health News

Stung by losses under the federal health law, major insurers are seeking to sharply limit how policies are sold to individuals in ways that consumer advocates say seem to discriminate against the sickest and could hold down future enrollment.

In recent days Anthem, Aetna and Cigna, all among the top five health insurers, told brokers they will stop paying them sales commissions to sign up most customers who qualify for new coverage outside the normal enrollment period, according to the companies and broker documents.

The health law allows people who lose other coverage, families with new children and others in certain circumstances to buy insurance after enrollment season ends. In most states the deadline for 2016 coverage was Jan. 31.

Last year, these “special enrollment” clients were much more expensive than expected because lax enforcement allowed many who didn’t qualify to sign up, insurers said. Nearly a million special-enrollment customers selected plans in the first half of 2015, half of them after losing previous coverage.

In addition, Cigna and Humana, another big health insurer, have ceased paying brokers to sell many higher-benefit “gold” marketplace plans for individuals and families while continuing to pay commissions on more-profitable, lower-benefit “bronze” plans, according to documents and interviews.

Gold plans typically enroll sicker members than do less comprehensive policies, say insurance experts. As of June, more than 695,000 people had enrolled in gold plans.

Those who want to buy individual and family plans can still do so directly through the Affordable Care Act’s online marketplaces or via navigators working for nonprofit groups.

But the retreat from broker sales, which includes last year’s decision by No. 1 carrier UnitedHealthcare to suspend almost any commissions for such business, erodes a pillar of the health law: that insurers must sell to all customers no matter how sick, consumer advocates say.

By inducing brokers to avoid high-cost members — whether in gold plans or special enrollment — the moves limit access to coverage and discriminate against those with greater medical needs, said Timothy Jost, a law professor at Washington and Lee University and an authority on the health law.

“The only explanation I can see for them doing this is risk avoidance — and that is discriminatory marketing and not permitted,” he said. “When people wonder why we’re not getting millions more enrollees in Affordable Care Act health plans, one reason is, the carriers are discouraging it.”

The insurance industry says it is not discriminating but adjusting to market realities including higher-than-expected medical claims and the failure of a government risk-adjustment program called “risk corridors” to cover much of that cost.

“Without making necessary changes to coverage and benefits, there was no way for health plans to remain in the market or to offer the kind of coverage as they had in the past without sustaining huge losses,” said Clare Krusing, spokeswoman for America’s Health Insurance Plans, an industry lobby.

The adjustments are critical to keeping coverage affordable and sustainable, said individual insurers contacted by a reporter.

If insurers are telling brokers they won’t be paid for enrolling people in gold plans, “that to me is pretty discriminatory,” said Sabrina Corlette, research professor at Georgetown University’s Center on Health Insurance Reforms.

The changes don’t affect job-based insurance or the government’s Medicaid and Medicare programs.

The nonpartisan Congressional Budget Office estimated as recently as last March that 21 million consumers would be enrolled by now in private health insurance plans sold through online marketplaces. Now CBO forecasts 13 million will sign up this year.

Brokers are critical to sign-ups and the success of the health law. For 2014, 44 percent of Kentucky enrollees bought through brokers. So did 39 percent of the California enrollees. No similar figures are available for the marketplace that serves most states, healthcare.gov.

Brokers are a “very important” part of enrollment for individuals and families despite alternatives provided by the health law, said Robert Laszewski, an insurance consultant. “They’re still big.”

With varying commissions, brokers will be tempted to promote only plans they make money on, even if those aren’t the best for some customers, said John Jaggi, an Illinois broker and consultant.

“Now they’re really forcing the agent to think only of the plan that he gets compensated for,” he said.

The race to lower commissions began last year with United’s move along with decisions by several, smaller insurance co-ops to suspend sales fees shortly before they failed, brokers said. Other insurers feared they might end up getting their competitors’ unprofitable business, so they too adjusted fees.

Last week, BlueCross BlueShield of North Carolina also told brokers it would stop paying commissions for special enrollment starting April 1, reported The News and Observer of Raleigh.

“We expect that at some point in time all of these companies will continue to reduce commissions where we’re not able to be compensated in a way that we can continue to run our businesses,” said Kelly Fristoe, who sells health insurance in Wichita Falls, Texas.

Regulators in at least two states, Kentucky and Colorado, have already warned insurers that altering broker commissions violates “fair marketing” rules or the terms approved rate filings.

Federal regulations prohibit insurers from marketing practices that “have the effect of discouraging the enrollment of individuals with significant health needs.” Violations can bring penalties of up to $100 a day for each adversely affected person.

The Department of Health and Human Services did not respond to requests for comment on the practices.

Insurers “can’t market their plans in ways that discriminate,” said Sarah Lueck, a policy analyst at the Center on Budget and Policy Priorities, a left-leaning think tank. “It’s going to take some more statements from regulators to make sure insurers get the message.”

What’s unclear is whether insurers intend to resume paying full commissions when open enrollment begins for 2017.

In its Monday letter to brokers, Anthem said it “remains committed” to individual and family insurance. United, however, said last year it might leave that business altogether — a drastic move because under federal law it couldn’t reenter for five years.

Few if any carriers want to go that far, said Laszewski.

“They can’t withdraw from the market,” he said. But by adjusting commissions, “they’re doing everything they can to slow it down until it gets fixed.”

Special-enrollment business is typically costlier than average because sick people are more motivated to sign up outside the normal marketing season, insurance experts say.

But last year’s special enrollments were especially unprofitable because regulators did little to ensure that consumers followed the rules — that they had lost previous coverage, gotten married, moved or otherwise qualified for off-season sign-ups, insurers say. As a result, any consumer could wait until he or she needed care to enroll, they say.

Aetna told HHS that a fourth of all its marketplace members joined through special enrollment last year and that many dropped out soon after receiving expensive care. Special-enrollment members used as much as 50 percent more care than those who sign up before the deadline, said the Blue Cross and Blue Shield Association.

Of the top seven health insurers, only Kaiser Permanente and Health Care Service Corp., which owns Blues plans in Illinois, Texas and elsewhere, haven’t changed commissions recently for gold plans or special enrollment, brokers say.

“Kaiser Permanente won’t be making any broker commission changes,” said spokeswoman Amy Packard Ferro. “It’s business as normal but we are always evaluating our commission structure,” said HCSC spokesman Greg Thompson.

The risk corridor program was supposed to reimburse insurers with sicker-than-average members. In November, however, HHS said it had only enough money to pay 13 percent of what it owed under the program for 2014.

The result for gold plans is that “the risk adjustment system does not work at all,” said Ana Gupte, a health insurance analyst at Leerink Partners. “So it’s impossible to make money.”

Analysis by Standard and Poor’s shows Humana, which is owed $243 million for 2014, as the biggest risk-corridor loser. United, Anthem, Aetna and Cigna, however, aren’t in the top 20.

For most of the largest insurers, blaming risk corridors for cutting broker fees “seems more like an excuse than a reason,” said Jost.

For more information, go to khn.org

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Oakland NAACP President Stands on the Frontlines for Equity

With education as a cornerstone, Adams emphasized the importance of youth having access to quality kindergarten through 12th-grade education along with college or vocational programming beyond high school. “I feel that it’s so important for our children to get a good education in K-12th grade, along with the colleges of their choice, especially with the HBCU’s (Historically Black Colleges and Universities).”

Published

1 day ago

January 7, 2025

Oakland Post

NAACP Oakland President Cynthia Adams. Photo Courtesy of Cynthia Adams.

By Carla Thomas

For Cynthia Adams, president of the Oakland chapter of the NAACP, fighting for the rights of Black people comes naturally. With southern roots in Arkansas, Adams experienced firsthand the injustice and unfairness of racism.

“Growing up in the Jim Crow South, I experienced the unfair treatment of people of color and how faith can inspire communities to bring about positive and long-lasting change,” said Adams. Adams says a combination of her family and faith has kept her strong in the face of adversity and inspired her life’s work of advocacy.

Adams chose education as a career path — and a means to achieve equity and overcome racism. She earned her bachelor’s degree at the University of Arkansas at Pine Bluff and later received an advanced degree from California State East Bay.

Adams’ experience as an Oakland Unified School District (OUSD) recorder, a counselor, a researcher, and a college recruiter has allowed her to be laser-focused on youth. She also served as the chairperson for the Oakland NAACP youth.

“The mission of the National Association for the Advancement of Colored People is to ensure the political, educational, social, and economic equality of rights of all persons and to eliminate race-based discrimination. We want to ensure our citizens have equal rights and opportunities without discrimination based on race.”

As a partner with the State of California’s Stop the Hate campaign, Adams says the initiative is a step in the right direction. “It’s great that our governor and state created the Stop the Hate campaign and provides resources for victims of racism and other hate crimes,” said Adams. “The racism toward Black people has increased and our children are being targeted,” she continued.

“We, at the Oakland branch, created a declaration on racism that will amplify the needs of our community to combat racism,” continued Adams. “That declaration was adopted nationally.”

Bridging communities and collaborating is also a strategy for moving society toward justice, according to Adams.

“Through the NAACP, we build connections between communities and advocate for the rights of historically marginalized and oppressed individuals,” said Adams. “Collective action is the only way to advance civil rights and promote social equity.”

By taking stands on supporting former Oakland Police Chief LeRonne Armstrong to supporting the recall of a mayor faced with a scandal that brought negative national press to the city of Oakland, Adams has always demanded more for her people, and better for Oakland, the city she calls home.

She expressed pride in the national organization’s announcement of a $200 million fund designed to empower Black funders nationwide. “We all know the health of a community begins with economics,” said Adams.

Adams says that strengthening Black businesses automatically sustains a community. “We’ve also got to educate our community on opportunities and teach our children critical thinking so that they can provide the next generation of solutions for society,” said Adams.

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January Is Mental Wellness Month

Mental illness affects people differently. Children ages 6-17 are three times more likely to repeat a grade if they have mental, emotional, developmental, or behavioral problems. Those with severe mental illness have a life span of 10 to 25 years shorter than the general population. 64% of jail inmates have a mental illness compared to 21.6% of the general adult population.

Published

2 days ago

January 6, 2025

Oakland Post

iStock,

By Scott Knight

January is a time to recharge and recover from the holidays. It is also National Mental Wellness Month, which recognizes the importance of mental health and aims to reduce the stigma associated with mental illness.

According to the National Institutes of Health, 57.8 million adults lived with some form of mental illness in 2023. The severity varies from person to person. Understanding mental health statistics in the U.S. can raise awareness and garner support for those in need.

Anxiety disorders are the most common form of mental illness and women are more likely than men to experience depression. 17% of adolescents ages 12-17 experienced a major depressive episode. And 33.5% of adults with living with a mental illness also has a substance use disorder.

The Substance Abuse and Mental Health Services Administration (SAMHSA) collects data on substance use and mental health. Their 2023 National Survey on Drug Use and Health reported that multiracial people had the highest rate of mental illness at 36.7%, followed by Whites (24%), American Indian/Alaskan natives (23.5%), Hispanics (20.6%), Blacks (19.4%), and Asians (18.1%).

National Mental Wellness Month involves highlighting the resources available to equip individuals with the capacity to cope with life’s difficulties; have healthy relationships and take care of their mental well-being before issues arise.

Wellbeingtrust.org tells us that having a purpose in life offers many benefits, including being happier, living longer, sleeping better, and improved heart health. To find that purpose explore your interests, volunteer, consider what you love to do, talk to friends and family, and try new experiences.

The National Alliance on Mental Illness reports that 46% of people who die by suicide had a known mental illness.

The Jason Foundation is a valuable resource if you feel that a friend or loved one is struggling with a mental illness. JFI is dedicated to the awareness and prevention of suicide through educational programs that equip youth, parents, educators, and the community with the tools and resources to identify and assist those who may be struggling mentally.

Visit www.jasonfoundation.com to learn how to make a difference and find the closest Jason Foundation Affiliate Office.

About the Author

Scott Knight is the Education Specialist at the Jason Foundation.

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2024 in Review: 7 Questions for Former Assemblymember Chris Holden

While in office, Holden championed efforts to improve education outcomes for students and advocated for social and racial justice. Legislation he wrote or sponsored also focused on, innovation in transportation, protecting developmental disability service providers and improving public health, more broadly.

Published

2 days ago

January 6, 2025

Oakland Post

Hon. Chris Holden. File photo.

By Edward Henderson, California Black Media

In 2012, Assemblymember Chris Holden was first elected to the California State Assembly representing the 41^st District in the San Gabriel Valley.

He was re-elected to that position for the following four terms.

Holden, a graduate of San Diego State University, lives in Pasadena with his wife, Melanie, and children Nicholas, Alexander, Austin, Mariah and Noah. Holden is the son of former State Senator and LA City Councilmember Nate Holden.

Before he closed out his final year of service in the Assembly, California Black Media (CBM) spoke with Holden. He reflected on his accomplishments this year and his goals moving forward.

Looking back at 2024, what stands out to you as your most important achievement and why? 

A project I’ve been working on for well over 36 years — the light rail system — made its way into Pasadena from downtown LA. Now it’s making its way through the San Gabriel Valley to Pomona.

How did your leadership and investments contribute to improving the lives of Black Californians? 

Having an opportunity to represent a multi-ethnic and diverse district is exciting, but to be able to bring a voice for a lived African American experience from the San Gabriel Valley is very important.

What frustrated you the most over the last year?

I still am frustrated that we aren’t seeing the kind of progress on affordable housing to allow underrepresented communities to be able to afford to live in the community that they grew up in.

What inspired you the most over the last year?

There has been a lot of movement around reparations through community engagement. Dr. Shirley Weber put forth the bill to establish a reparations task force and that task force met for a number of years. Two members of our caucus served on it, Sen. Steven Bradford and Assemblymember Reggie Jones-Sawyer. A thousand-page report and a hundred recommendations or more came out of that. And now we’re in the process of finding ways to implement some of those recommendations. It’s going to be a longer process, but I’m hopeful because California, once again, is on the front end of taking on a really challenging issue.

What is one lesson you learned in 2024 that will inform your decision-making next year?

Always be mindful how quickly the winds can change. We’ve gone from 10 years of having budget surpluses to this year having a $45 billion deficit.

In one word, what is the biggest challenge Black Californians face?

Inequality.

What is the goal you want to achieve most in 2025?

Well, I won’t be in the legislature in 2025, but I love public policy. I’d like to find myself in a position where I’m continuing to have an influence on how public policy is shaped and formed. I’m just looking forward to being a vital voice going into next year in a different role. It will also be an opportunity to lay a foundation to take another run, possibly for a seat on the LA County Board of Supervisors in 2028.