Entries in Health Insurance (8)


Health Insurance Rebates: Is Your Check in the Mail?

iStockphoto/ThinkstockNEW YORK) -- A new provision of the Affordable Care Act -- called the Medical Loss Ratio, or the “80/20″ provision -- could mean some Americans will see a rebate from their health insurance companies Wednesday.

The provision is aimed at holding health insurance companies accountable for how they spend the money collected through premiums. It compares the dollars they spend on health care costs vs. other overhead costs -- like marketing, salaries and administrative expenses.

Under the law, small-group and individual-plan insurance companies that annually spend less than 80 percent of premium dollars on medical care owe their customers a rebate. For insurers to large businesses, the percentage split is 85-15.

This is the first year the provision is in effect, and insurance companies that owe rebates must pay them by Wednesday, Aug. 1.

Here’s a look at the health care rebates, by the numbers:

  • Health insurance companies have to pay out a total of $1.1 billion in rebates by Aug. 1.
  • About 12.8 million Americans will receive a rebate, according to the Department of Health and Human Services.
  • The average privately insured family will see a $151 rebate from this provision, but payouts will vary by state.
  • About 31 percent of Americans who have individual insurance are eligible for a rebate. They’ll get their checks directly in the mail, averaging about $127, according to a study by the Kaiser Family Foundation.
  • For people who buy insurance through their employers, those rebates won’t come directly in the mail. They’ll first go to the employer, which decides how to distribute it. Employers who offer insurance can either send out individual checks to their employees, or put those rebates toward lowering future premium costs.

The employer could also use the rebates as a lump-sum reimbursement to the accounts that pay premiums, or spend it in other ways that “benefits its employees,” according to the Department of Health and Human Services.  This can include lowering co-pays or adjusting cost-sharing to cut group insurance costs.

Employees should contact their employer for details about how their rebates will be distributed.

Whether they owe a rebate or not, insurance companies in every state have to notify their customers by Wednesday if they’ve met or failed this part of the law.

For information on how your health insurance company stacks up on the 80/20 provision, click HERE.

Copyright 2012 ABC News Radio


Obama Admin. Partners with Health Insurers to Prevent Fraud

Tom Williams/Roll Call(WASHINGTON) -- The Obama administration is partnering with major insurers in the fight against health care fraud, announcing plans today to share billing information in an effort to identify trends and halt scams.

“Lots of the fraudsters have used our fragmented health care system to their advantage,” HHS Secretary Kathleen Sebelius told reporters today at a White House event with insurance executives. “By sharing information across payers we can bring this potentially fraudulent activity to light.”

The federal government, state investigators, and major insurers will share data and best practices to try to prevent billions of dollars in questionable payments and safeguard taxpayer resources, the administration announced.

“We will work to develop and disseminate best practices, to educate health care professionals and consumers on ways to identify and stop fraud, and to open an ongoing dialogue about the emerging trends and evolving threats throughout the healthcare marketplace,” Attorney General Eric Holder explained.

In the past, Sebelius said, the government followed the “pay-and-chase” model, paying claims first and later tracking down the ones that were fraudulent. “The money was already out the door,” she said. “Now we’re taking away the crooks’ head start.”

Copyright 2012 ABC News Radio


5 Tips for Health Care Plan, Medicare Enrollment

PhotoAlto/Frederic Cirou(NEW YORK) -- With the arrival of fall, those Americans fortunate to have health insurance through their employer -- 55.3 percent in 2010 according to Census data -- often re-enroll in their health plans without much thought.

Most of the provisions of President Obama's Patient Protection and Affordable Care Act will not be implemented until 2014, but consumers should be mindful of the re-enrollment period, which occurs in October for many plans.  Nancy Metcalf, senior program editor with Consumer Reports, has these tips for the insured:

1. Watch those deadlines.

"First, don't blow it off," Metcalf said.  The insured are often busy and take for granted their health options.  Around fall, most employers also send out at least an email or two that can disappear in your inbox.

Medicare's open enrollment also ends earlier this year -- Oct. 15 to Dec. 7 -- as opposed to through the end of the year.  Those 65 and older who are eligible should take note in case they want to change their drug plans, for example.

2. Analyze changes in options or personal situation.

Metcalf said provisions of a plan can change, such as a different deductible, or your family situation might have changed, such as a marriage, divorce or a new baby, which can alter the optimal options for you.

3. Consider trade-offs of an HMO, PPO, or POS.

A health maintenance organization (HMO) requires the insured to have care from provider in the plan's network, often restricted to a certain geographical area, and is coordinated by your primary care physician, according to the November issue of Consumer Reports, which ranks health insurance plans.

A preferred provider organization also has provider networks but you can see an in-network specialist without a referral.  The insured can also see a doctor out-of-network but for a higher cost.

Point-of-service, or POS, plans are a hybrid of an HMO and PPO: the insured choose a primary care physician and you need a referral to see a specialist.  As with PPO plans, the insured can see a doctor out of the network.

4. When to choose a high-deductible plan.

Insured usually choose a plan with a high-deductible payment to lower monthly premium costs.  Metcalf said these are usually paired with a health savings account (HSA) with money taken from your paycheck tax-free to pay for certain medical expenses.

Those with lower health care costs may find lower premiums off-set those high-deductible costs. Or those who have a good idea of their costs -- such as planned vision or dental work -- can usually calculate how much their costs will be within their health insurance plan.  But that takes requires detailed planning, so start talking to your doctor, dentist and optometrist now.

5. Learn about the healthcare act's provisions that have taken effect.

As of now, only a few healthcare provisions have taken effect.  First, dependents up to age 26 can remain on their parents' plans regardless of whether they live in the same household, or even if those young adult children are married.  About 1.2 million people have taken advantage of that benefit this year, according to Consumer Reports.

Other provisions that are already in effect are cheaper drugs through Medicare and free preventative care through insurance plans.

Metcalf said many people have misconceptions about the embattled healthcare act, such as what it provides and when provisions will be implemented.  She suggests visiting for more details.

Copyright 2011 ABC News Radio


Health Insurance Premiums Rise Sharply in 2011

Creatas Images/Thinkstock(WASHINGTON) -- Health insurance premiums shot up 9 percent this year, nearly three times the rate of inflation and the most since 2005, a new study shows.

This year, the annual premiums paid out for employer-sponsored programs topped $15,000, according to Kaiser Family Foundation/Health Research & Educational Trust, which conducts an annual health benefits survey.

Average health care premiums rose to $10,944 for employers and $4,129 for workers for a total of $15,073.

At a time when economic news is gloomy, the rate of payment may seem troublesome. “This year’s 9 percent increase in premiums is especially painful for workers and employers struggling through a weak recovery,” Kaiser President Drew Altman said in a statement.

The rate of increase is faster than wage hikes and general inflation, which rose 2.1 percent and 3.2 percent, respectively. The figure has risen a whopping 113 percent in the last 10 years, according to Kaiser.

“The 9-percent increase in health insurance costs will make it harder for many families and employers to afford insurance, which may lead higher increases in the number of uninsured next year,”  Leighton Ku, director of the Center for Health Policy Research at The George Washington University.

“The survey found that insurance premiums rose just about the same amount for single people — 8 percent – as the 9 percent increase for families, which suggests that this change required by the health reform law may not have played much of a role in the rising costs of insurance,” Ku continued in a statement to ABC News.

Some good news in the survey: Thanks to health care provisions, more than 2 million young adults were added to family health insurance plans.

“The law is helping millions of young adults to obtain health coverage. In the past, many of these young adults would have lost coverage when they left home or graduated college,” Gary Claxton, a Kaister VP, said in a statement.

Additional findings from the Kaiser Study:

Workers-only coverage increased by 8 percent to $5,429 annually, or $452 a month.

Some 60 percent of companies offer health insurance to workers.

The average co-payment for in-network physician visits is $22 for primary care and $32 for specialty care.

The average co-payment for three- and four-tier dug plans is $10 for generic drugs, $29 for preferred brand-name drugs, $49 for non-preferred brand-name drugs, and $91 for specialty drugs.

One in four large firms offer retiree health benefits in 2011. The figure is down from 32 percent in 2007.

Copyright 2011 ABC News Radio


Woman Uninsured After Paying with Credit Card

PRNewsFoto/Blue Cross and Blue Shield(LOS ANGELES) -- Health insurer Anthem Blue Cross, based in California, announced this year it no longer allows monthly automatic online bill payments, attracting complaints from longtime customers. And consumer finance watchers warn this may be one of the first of many cases of merchants reigning in credit card use.

Anthem Blue Cross initially announced it was charging a $15 convenience fee on credit card payments in the spring, much to the dismay of policyholders accustomed to auto-paying with credit cards.

A spokesman said at the end of May the company first notified customers by mail of the surcharge but waived that fee indefinitely within a week. He said customers were informed they could no longer make auto-payments via credit, and calls were made to policyholders who were still paying premiums by recurring credit card each month reminding them of the restriction.

He said the outbound calls reminded policyholders of the other payment options, including automatic checking deduction, online bill payment, payments by mail, and one-time payments, with no fee until further notice, through customer service. Anthem now offers for free an automated telephone payment option to make a one-time credit card payment, according to the spokesman.

Ed Mierzwinski, consumer program director of the Public Interest Research Group, or PIRG, said Anthem did a "terrible" job informing customers of the change though credit card companies are "part of the problem."

"The fees they impose on companies that collect credit cards is very high," he said, saying a credit card company can charge three percent.

Though Mierzwinski said no consumer group would advocate for a merchant to surcharge customers for using a credit card. The Federal Reserve capped debit card fees for merchants at 21 cents for each transaction, after initially proposing a cap of seven to 12 cents in December.

Lynda Gledhill, spokeswoman for the California attorney general's office, could not comment about Anthem but said California law prohibits private companies from requiring a credit card payment surcharge from customers, though they can offer discounts if paying with cash.

Beverly Harzog, credit card expert at, said consumers should be aware if merchants limit or no longer accept credit card payments to try to decrease the transaction fees.

"When I see something like this, it's not long before I see similar situations," she said. "Accepting credit card payments is a little more expensive. Given how the economy has been, my guess is other companies may try to trim expenses."

Copyright 2011 ABC News Radio


Blue Shield Policyholders May Face Rate Hikes Up to 59 Percent

Photo Courtesy - Getty Images(LOS ANGELES) -- Thousands of Blue Shield individual policyholders could see their insurance rates increase by as much as 59 percent on March 1, The Los Angeles Times reported Wednesday.

The California-based health insurer attributes the hikes to rising healthcare costs and expenses stemming from newly enforced healthcare laws.

If implemented, a total of 193,000 policyholders would have their rates increased by an average of 30 to 35 percent.  Out of that total, about one-in-four customers would be faced with cumulative increases of more than 50 percent throughout a five month time period.

Blue Shield policyholders, including Michael Fraser of San Diego, were notified of the successive rate hikes.  After reviewing the notice, Fraser learned that his monthly bill would go up from $271 to $431, an increase of 59 percent.

California insurance commissioner Dave Jones' office is reviewing the proposed increases.

Copyright 2011 ABC News Radio


Justice Department Sues Blue Cross Blue Shield of Michigan in Anti-Trust Case

Photo Courtesy - PRNewsFoto(WASHINGTON) -- The U.S. Department of Justice is suing Blue Cross Blue Shield of Michigan (BCBSM), alleging that the group raises hospital rates and prevents other insurance companies from being able to enter the health care marketplace in the state.  The Justice Department says BCBSM's behavior is in violation of the Sherman Act.

"The department's lawsuit alleges that the intent and effect of Blue Cross Blue Shield of Michigan's MFNs is to raise hospital costs for competing health plans and reduce competition for the sale of health insurance," said Christine Varney, Assistant Attorney General in charge of the Justice Department's Anti-Trust Division.  MFNs are most favored nation provisions that grant favorable terms to selected providers, making competition difficult.

The suit was filed Monday in U.S. District Court in the Eastern District of Michigan. 

The Department of Justice says that the court will determine a pretrial schedule for the case as soon as BCBSM files its response to the lawsuit.

Copyright 2010 ABC News Radio


McDonald's Fights Back Against Report It Will Drop Health Care Plan

Photo Courtesy - PRNewsFoto(NEW YORK) -- McDonald's and the Obama administration are firing back at a Wall Street Journal report saying the fast food giant is considering dropping its "mini-med" health insurance for hourly workers because of the new health care reform law.

"Media reports stating that we plan to drop health care coverage for our employees are completely false," said Steve Russell, a senior vice president and head of human resources for McDonald's, in a written response to the article. "These reports are purely speculative and misleading."

That sentiment was echoed by Health and Human Services Secretary Kathleen Sebelius Thursday.  "The McDonald's story is flat out wrong, and I am sorry that they were not more accurate in their reporting," she said.

Nearly 30,000 McDonald's employees currently participate in the plan, which provides a maximum of $2,000 to $10,000 a year in basic medical coverage at a cost of $14 to $32 a week, according to the company. Home Depot, Disney, Blockbuster, Staples and other big retail chains with large populations of hourly employees offer similar plans.

The Wall Street Journal reviewed a memo by McDonald's, asking federal officials to determine if their most basic health insurance plans can be exempted from the medical loss ratio requirements of the new health care law. The law requires that 80-85 percent of the premiums received go directly to patient care, not to other expenses like overhead, executive salaries or dividends for shareholders.

The McDonald's plan, according to the report, has higher overhead costs because it provides insurance to a highly transient population of hourly workers in its restaurants and would not likely meet the minimum requirements of the new law.

An HHS spokeswoman called the story premature.

"The new law provides significant flexibility to maintain coverage for workers. Additionally, this story is premature as guidance on the new medical loss ratio rules has not even been issued," said Jessica Santillo. "The administration is working closely with businesses like McDonald's that are committed to providing health benefits to protect health coverage for their employees."

Copyright 2010 ABC News Radio

ABC News Radio