Did you recently have a medical claim denied by your employer sponsored group health insurance plan?   Did you breast enlargement procedure go horribly wrong and people now call you Frankenboob?  You might be entitled to get the claims decisions appealed!

On January 1st of this year, all 44 million Americans on a group plan which is self insured by the company are entitled to an external appeal due to the health reform bill.    A self insured plan simply means that the company is large enough to underwrite their own claims instead of using an insurance company to pay claims.

This external review process includes an arbiter that has no skin in the game so to speak (no gain or loss comes from the decision) and decides if the medical procedures are necessary and thus covered by the plan.  The GAO is finding that 54% result in a change in the decision which is binding and final (not able to be appealed).

The main issue now though is that no one knows about the review process!

Part of the reason for the blackout on information is that the government didn’t require the employer to inform members about the change this coming July 1st, and because most plans renew annually in January, employees won’t even know till next year.

Even worse news is that patients only have 180 days from the date of the denial to appeal.  From there if the appeal is denied they get another 180 days to appeal to the external arbiter.  Obviously, this is creating an incentive to keep the change in the appeal process quiet for employers.  Of course some plans are making the effort at least to inform their employees/members.

Another Obstacle

The next obstacle in this situation is a lack of accredited review organizations.  There are 14 getting accredited though and if you are an entreupeneur this sounds like a potentially lucrative field.  Still, with an expected 2500 reviews at an increasing rate till January 1st there will be a shortage.  By next year this number will get significantly higher by January 1st.  Each self insured plan is legally obligated to contract with at least three review organizations to make this process as quick possible.

As of now this last obligation has already been reduced to one.

In what can only be described as the most unexpected news since the Taliban learned about disco last week, Aetna has announced a premium drop in the 3rd quarter.  Yes you don’t need to reload this page, you read that correctly, Aetna is lowering premiums.  Ok so its only in Connecticut, and its only 10%, and its only in the individual market, but it is a huge departure from the usual 10% increase.

Obviously, Aetna is taking corrective action to avoid have to write checks to policy holders.  The MLR (or Medical Loss Ratio law for those that don’t read this column regularly, shame on you!), simply states that 80% of insurance company revenues need to go towards medical costs.    Well in 2010 according the Connecticut Insurance Department, Aetna’s individual policies in Connecticut had an MLR of only 54.3%.  So based on that fact alone, the 10% would seem to not be enough.  Still perhaps Aetna is trying to err on the side of caution as to not overfund the premium cuts, kind of like what I do when I test out my circumcision in a box kit for proud fathers (I’m running out of space to experiment).

The reason for this of course is the premiums were to high to begin with, but the reasons proffered by those in the know (like insurance company reps) claim that the reason for the drop is lower utilization due to higher deductibles meaning more out of pockets.  Put simply, when people have to pay for their medical procedures they tend to put them off or avoid them altogether.    More importantly, the MLR ratios are lower in the individual market.  Another way to put that sentence would be to say, the individual market is much more profitable than the group market because companies can pick and choose their risks and because the policies tend to have higher deductibles and less-comprehensive benefits. Both factors can result in fewer, smaller claims, putting downward pressure on the medical loss ratio.
The article I used in this research in the LA Times claims,

In addition, insurers sometimes have high administrative expenses, and not only because they have to review and approve people for coverage in the individual market. Jost says a review of commissions paid to brokers found that insurers sometimes paid them as much as 40 percent of the first year’s premiums. “That’s more than they spend on drugs, and far more than on primary care,” he says.

“If you ask the consumer, ‘Do you think more should be spent on pharmaceutical costs or on agents and brokers?’ what do you think they’ll say?” asks Jost.

Of course this statement is misleading as the companies that pay 40% commissions are not Aetna or major carriers, but tend to be second tier carriers like Assurant (no longer offers individual major medical) or Golden Rule (owned by the swindlers at United,  who did away with their Platinum Plans which were designed to make them and their brokers money).  No real carriers ever pay more than 25% first year and 5-7% renewals.  At least East Coast Health Insurance never offered these plans.  Of course, 25% is a ton of money too and now commissions are at an average of 12% first year and 4% renewals.  I think this number should be 15% and 5% though to preserve agents who specialize in the business like yours truly.

The other big MLR news being bandied about is if broker commissions will be exempted altogether.  Perhaps this is a good idea although the comps should be capped at 15/5.  In any case, I am more concerned with the rise of the minimed.  Do not buy this shit product until you review the new PCIP plans.  If you don’t qualify for PCIP you can buy a minimed, but at least make sure you understand what it will take to qualify for PCIP and don’t mess up your ability to qualify.  In other words, you have to be without insurance for 6 months and because minimeds are not insurance, they might make sense for the 6 months until you can get on the newly affordable PCIP plans.

Trying to spur enrollment in a key new benefit of the 2010 health law, the Obama administration announced today it is slashing premiums for new high-risk insurance plans and no longer requiring applicants to submit a rejection letter from private insurers.

PCIP (or Pre-Exisiting Conditions Insurance Plan) has finally become affordable.  The initial enrollment was 18,000 in the first year!  People just couldn’t afford it.  Whats amazing is that there are minimally 4 million Americans that are running around with no insurance that are eligible for this plan which is simply awesome.  How awesome?  Well the government expected a huge influx of clients and set aside $5 billion to fund the shortfall between premiums collected and health care dollars spent.  The plan anticipated that the $5 billion shortfall would cover 200,000 enrollments.

So what happened?  Agents!  No agents to tell people where and how to sign up because insurance agents are greedy bastards and will sell you a mini-med that could kill you before they let you leave without getting a commission.  Perhaps the government should have set aside some money to pay a minimal fee to agents to do this work (kind of like Citizen’s in Florida does for property insurance).  The good news is that our website carriers this plan (you can even enroll online) and the even better news is that the government cut the rates almost in half!

Twenty-seven states run their own plans; the federal government operates them in 23 states and the District of Columbia. The changes, which occur July 1, affect only federally run plans. So if your own state decided to administer its plan you will not enjoy this rate cut unless they match it.

These full benefit plans were made to help people get insurance if they were uninsurable between now and 2014 when insurers will be forced to accept everyone and everyone will be forced to have insurance.  Of course there are some caveats such as in order to be eligible for the plan, applicants have to be uninsured for at least six months and have a pre-existing condition.

In the states where the plans are run by the federal government, applicants will no longer have to prove they were denied coverage by an insurance company. Instead, they can provide a doctor’s letter stating that they have a medical condition. At least a dozen state-run plans do not ask for a denial letter from an insurer.

The premiums will drop as much as 40 percent in 17 states plus the District where the federally administered plans operates, the administration estimates. These decreases will help bring premiums closer to the rates in each state’s individual insurance market. In the six states where high-risk plan premiums were already similar to what healthy people pay for individual plans, premiums will remain the same.

States that will see a 40 percent drop in premiums are Alabama, Arizona, Delaware, Florida, Kentucky and Virginia. In other states, premium reductions range from 2.1 percent in Mississippi to 38.3 percent in Minnesota.

In Florida, where 770 people have enrolled, a person 55 and over who subscribes to the so-called standard plan will see his or her monthly premium for the standard plan fall by $150 to $376.

To further generate interest in the plans, HHS this fall will begin paying insurance agents and brokers for signing up people.

“These changes will decrease costs and help insure more Americans,” said Health and Human Services Secretary Kathleen Sebelius.

One critic of the program again took the administration to task.

“It seems a fairly safe assumption that today’s announcement is an effort to jump-start a program that has not come close to meeting expectations,” said a spokesman for Rep. Fred Upton, R-Mich., chairman of the Energy and Commerce Committee. “However, additional information is needed to determine the ramifications of this change – both for taxpayers and Americans with pre-existing conditions who may or may not benefit from this program.”

The administration released a chart showing changes to premiums in states with federally administered plans.

As most Americans know by now, colonoscopies are very essential to prevent colon cancer which are used to spot colorectal cancer which will kill about 50,000 Americans this year.  After the government changed our health care laws, health insurance plans were now being required to cover most preventative care services such as colonoscopies as a free service with $0 out of pocket for the patient.

In actuality, that has happened perfectly as planned.  Where it gets tricky is when doctors find and remove a polyp.  In this case, many private insurers and Medicare as well, hit the clients with up to several hundred dollars in costs.  They can do this because once a polyp is caught, it is no a longer a preventative measure but a treatment.

The American Cancer Society and other advocacy groups have come out swinging against the charges, claiming that the extra expenses are surprising consumers and patients.  These expenses can include deductibles, copayments, and coinsurance.  The main offenders include Kaiser Permanente (and these guys are the most surprising as their plans are non profit), Health Net, and even Medicare.

Of course President Obama comes out looking ridiculous in this matter, as the Obamas (including Michelle) have been trying to get support for health care reform by highlighting these free preventative care services.  Perhaps highlighting is not a good word though, he has been painting this benefit on the sides of barns across the US.

Colonoscopies are the not only procedures either that can shake the carpet.  Other preventative care services have been turning up lesions or lumps that need to be removed which would also thusly change the nature of the visit.

The law is quite straight-forward though. It prohibits health plans from imposing cost sharing for preventive services that were part of a visit to a doctor that was focused on prevention, if the services are not billed separately from the office visit. However, an insurer “may impose cost-sharing requirements for a treatment that is not a recommended preventive service, even if the treatment results from a recommended preventive service.”

Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, said the colonoscopy issue illustrates the need for a clarification from administration officials about services such as colonoscopy where physicians provide both preventive and therapeutic care in the same visit. In written comments on the federal regulation last year, his group said physicians must understand how to appropriately code preventive services so that insurers know when to waive the deductible and coinsurance.

The federal health law specifies that insurers must fully cover services that have earned an A or B rating from the U.S. Preventive Services Task Force, plus immunizations recommended by the Centers for Disease Control and Prevention, and preventive care for women and children recommended by the federal Health Resources and Services Administration.

That coverage rule took effect last September. It applies to an estimated 31 million Americans in group health plans this year and 10 million in individual plans, and will cover 88 million by 2013.

To qualify for the free coverage, patients must go to providers in their health plan network.

Colonoscopy is on the U.S. Preventive Services Task Force’s recommended list, with an A rating, for all adults 50 and older. It checks for colorectal cancer, which is preventable with screening and highly treatable if caught early. A National Institutes of Health report last year said cost sharing likely affects people’s willingness to have such screening.

If a patient with no symptoms goes in for a screening colonoscopy and the gastroenterologist finds no pre-cancerous or cancerous polyps, everyone agrees that Medicare and commercial insurers are required to cover the expensive test 100 percent. But when the doctor removes a polyp, some insurers apply charges– meaning the insurer pays less of the bill.

Critics say charging cost-sharing defeats the purpose of the law. Studies show that colonoscopies find a polyp in at least 25 percent of men and 15 percent of women. Thus, many people face financial “post-procedure shock,” according to medical and consumer groups that are lobbying to stop insurers and Medicare from applying cost-sharing in this situation.

“We raised this with insurers and they wouldn’t budge,” said Dr. David Johnson, past president of the American College of Gastroenterology. Since the law took effect, “it’s still an ongoing problem,” he added.

Medicare is waiving the deductible for its beneficiaries but charges patients a copay of $186 plus 20 percent of the doctor’s fee, according to a Medicare spokeswoman.  She said there have been few complaints from beneficiaries about the policy.

In addition to Kaiser Permanente and Health Net, Regence BlueShield, which has 3 million enrollees in four Northwest states, initially said it charged members the deductible and coinsurance if a colonoscopy found and removed a polyp. But Regence spokeswoman Rachelle Cunningham subsequently said that was a mistake, there should be no cost sharing charges, and the company was “re-evaluating and re-processing some claims.”

A Health Net spokeswoman said that in an effort to help enrollees understand the situation, her company has trained its customer service staff to better explain colonoscopy coverage. Kaiser Permanente officials said the insurer “strongly supports” the health law’s guarantee of preventive services but when “services extend beyond preventive and require diagnostic or therapeutic services” the cost sharing will apply, depending on the specific plan details. (KHN is not affiliated with Kaiser Permanente.)

Aetna, Cigna, Group Health Cooperative, Humana, United Healthcare and Wellpoint/Anthem all said members pay no cost-sharing when a polyp is found. Assurant everyone’s sweetheart carrier, refused to comment.

One of the most overlooked assets available to those that don’t have private health insurance is the community health center.  These centers see almost 20 million patients per year and by 2015 due to health reform, that number is expected to double.  Because the ranks of the uninsured has risen to 50 million, local community health centers are becoming in many cases the best, or at least the main affordable option.  Their original desing of course was to provide a primary-care safety net for people in underserved areas, the fact is no one is ever turned away for any reason from a community health center.  Even the rich can get be seen though they will be billed on a sliding scale; in most cases uninsured people with higher incomes will pay the full cost of care, which is actually comparable to costs in the private sector.

As the role of the centers has expanded beyond primary care, they have become behavioral health providers, pharmacies, and even offer preventive and restorative dental services on site. Some have pediatric centers, reflecting the fact that more than a third of their patients are children.  I often refer the uninsured to these centers as they can provide full service medical care.  In Florida Memorial Hospital in Hollywood, Florida offers a terrific plan that sadly is very much overburdened.  Luckily, for centers like it there is an $11 billion infusion from the health-care overhaul and $2 billion in federal stimulus funds.

If you have been unable to get health insurance and have been putting off seeing a doctor, please visit our list of community health centers available in each state on our site.  For instance, the Florida community health centers take up nearly a page!

A Commonwealth Fund survey of 800 community health centers last year found that 29 percent of them had all five medical-home indicators it measured, including usually providing same- or next-day appointments, off-hours clinical advice, tracking of test results, tracking of patient referrals to specialists, and being able to generate lists of patients by diagnosis. Another 55 percent of centers had three or four indicators.

Still, arranging for specialty care can be tough, the survey found. Ninety-one percent of centers said they had trouble getting their uninsured patients in to see a specialist, while 71 percent said that was the case for Medicaid patients, and 49 percent reported difficulty scheduling their Medicare patients with specialists.

Wait times are another problem at many centers. In part, because they don’t turn anyone away, getting an initial appointment can take months. Once someone becomes a patient at a center, wait times for appointments aren’t generally as long, but they still exist.