Breaking News – Transparency Rule is Finalized

Transparency is a hot topic and breaking news from the White House addresses transparency for plans and health insurance issuers.

As of Jan. 1, 2023, health plans and insurers will be required to provide the cost for all out of pocket costs and negotiated rates for all care and services including prescriptions to their participants. They will be required to do this through an online self-service tool and on paper if requested. 

Additional detailed pricing information will be required to show negotiated rates for all covered items and services between the plan and in-network providers. In addition, the same kind of information regarding prescription drugs will be required for negotiated pricing between plans and pharmacies.  Read more about this rule.

Source: Society of Professional Benefits Administrators, CMS)

The ACA and the Supreme Court

The recent confirmation of Amy Coney Barrett has placed more emphasis on the Affordable Care Act as the Supreme Court is scheduled to hear a case challenging the law on November 10^th. Front and center of concern for Democrats is the protection for those with pre-existing conditions.

According to the Kaiser Family Foundation, “Majorities of Republicans (66%), independents (81%), and nine in ten Democrats (91%) say they do not want to see the Supreme Court overturn the pre-existing condition protections in the ACA.” However, 76% of Republicans would like to see the entire law overturned versus 89% of Democrats and 66% of Independents who want to keep the law in place.

More information will come as the Supreme Court gets closer to hearing these arguments.

(Source: Kaiser Family Foundation)

As the Market Tightens, Captives Grow

Insurance broker, Marsh, released its 2020 Captive Report and revealed that “tightening global insurance market conditions throughout 2019 led to higher captive utilization with steep premium volume growth in several coverage lines.”

In 2020, captive use continued to rise, and Marsh said they created 76 new captive insurance companies January – July of this year. These new companies don’t cover pandemic losses, directly but have given them the financial flexibility to maneuver through the pandemic.

(Source: Insurance Journal)

Setting Premiums for 2021 will be More Challenging

Higher gross margins and lower medical loss ratios present a challenge to insurers as they look to set premiums for 2021. People delayed medical care (including non-emergency surgeries) because of the pandemic, and job losses led more people to use Medicaid. Both of these factors look to be part of a larger trend.

Some commercial insurers may have offered to cover Covid treatment costs, increased mental health benefits, and telehealth to increase their claims cost to increase these loss ratios so they will owe smaller rebates next year.

(Source: Healthcare Finance News)

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