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Tag Archives: Health Insurance Industry
Will Your Prescription Meds Be Covered Next Year? Better Check!
The battle continues to rage between drug companies that are trying to make as much money as possible and insurers trying to drive down drug prices. And consumers are squarely in the middle.
That’s because, increasingly, prescription insurers are threatening to kick drugs off their lists of approved medications if the manufacturers won’t give them big discounts.
Health Net tried to block employee whistleblowers, SEC says
For years, insurance provider Health Net Inc. used illegal severance agreements to try to keep departing employees from talking to state and federal officials about company violations, the U.S. Securities and Exchange Commission said Tuesday.
The Woodland Hills company agreed to pay a $340,000 penalty to settle the SEC’s allegations. It also agreed to contact former employees who had signed the severance agreements between Aug.12, 2011, and Oct. 22, 2015, and inform them that they were not prohibited from blowing the whistle about potential securities violations.
Health Net did not respond to requests for comment. The SEC said the company had agreed to the settlement without admitting or denying the commission’s findings.
The health insurer changed language in its severance agreements after the Dodd-Frank financial reform legislation was enacted in 2010. The law encourages whistleblowers to report possible securities law violations by providing financial awards and other incentives.
Under Health Net’s amended severance agreements, former employees waived their right to any monetary recovery that came from becoming a whistleblower. The SEC’s order does not address non-securities-related whistleblower lawsuits.
“Financial incentives in the form of whistleblower awards, as Congress recognized, are integral to promoting whistleblowing to the commission,” said Antonia Chion, associate director of the SEC’s enforcement division. “Health Net used its severance agreements with departing employees to strip away those financial incentives.”
Seven healthcare industry trends to watch
In Battle Of Health Care Titans, Should Insurers Act Like Wal-Mart?
In late July, the Justice Department sued to block both insurance mergers, arguing that competition is important to keep premiums down and that the deals “would leave much of the multitrillion-dollar health insurance industry in the hands of three mammoth insurance companies.”
They also rejected the Wal-Mart argument, which is related to what economists call “monopsony,” a concentration of buying power.
Monopsony is the opposite of monopoly: Instead of using market dominance to raise prices for consumers, huge buyers force down prices from suppliers. Wal-Mart is often described as holding monopsony-like power.
But critics of the insurance deals say monopsony can go too far. If the buyer pushes prices too low, suppliers stop producing, making needed goods and services unavailable.
“As a result of the merger, Anthem likely would reduce the rates that … providers earn by providing medical care to their patients,” the Justice Department argued. “This reduction in reimbursement rates likely would lead to a reduction in consumers’ access to medical care.”
Should Big Insurance Become Like Walmart To Lower Health Costs?
Should Big Insurance Become Like Walmart To Lower Health Costs?
Retail titan Walmart uses its market dominance to inflict “ruthless,” “brutal” and “relentless” pressure on prices charged by suppliers, business writers frequently report.
What if huge health insurance companies could push down prices charged by hospitals and doctors in the same way?
The idea is getting new attention as already painful health costs accelerate and major medical insurers seek to merge into three enormous firms.
Now that hospitals have themselves combined, in many cases, into companies that dominate their communities, insurance executives argue the only way to fight bigness is bigness.
Aetna is notifying some doctors about their drug-dispensing habits
Judge: Only time for one insurer merger case in 2016
A federal judge said Thursday it is unlikely he would be able to rule on both the Aetna-Humana and Anthem-Cigna antitrust suits by the end of the year, according to Reuters.
Lawyers from Anthem and Aetna argued this week that Judge John Bates should hear their cases before the end of 2016. The Justice Department filed suits in July against both mergers, citing competition concerns that it says would increase prices for consumers and stunt innovation.
Bates said in a hearing Thursday that both requests cannot be fulfilled, but did not say which case would be sent for reassignment.
“That’s my determination: that I can’t do both,” Bates said in the hearing, according to Reuters.
Aetna believes it has a simpler case, the article adds. Further, its deal with Humana was announced first.
Anthem’s lawyers, though, point out that if the case is not settled by the end of the year, Cigna will likely refuse to extend their agreement, thus dooming the merger, Reuters notes.
In an interview with FierceHealthPayer, antitrust lawyer David Balto indicated that the Anthem-Cigna merger is “like climbing Mount Everest,” and that they are less poised to battle the DOJ than Aetna and Humana.
3 possibilities for the future of the ACA exchanges
With health insurers struggling to turn a profit on the Affordable Care Act exchanges and premiums likely to rise, many have wondered what the future will hold for this prominent feature of the Obama administration’s healthcare reform law.
This week, Aetna became the latest major insurer to indicate it will re-evaluate its participation in the ACA marketplaces amid climbing financial losses that mirror those experienced by UnitedHealth, Humana and much smaller consumer operated and oriented plans.
What’s more, the cost of the ACA’s “benchmark” silver plan will increase by a weighted average of about 9 percent in 2017, compared to a 2 percent average increase in 2016. And in some areas of the country, insurers have requested steep rate increases–as much as 60 percent–for their exchange plans.
Struggling to Stabilize the Exchanges
Six years after passage of the Affordable Care Act (ACA), the individual and small-group insurance markets—the markets that the ACA remade—are still having growing pains. Health insurers have endured large losses and a number of ACA-created co-ops and other small insurers have failed. Consolidation among providers and insurers is an increasing and concerning trend. And many insurers are poised to raise premiums substantially for 2017, further stoking frustration with the insurance industry.
Even as the press vilifies insurers, however, the ACA’s supporters can’t afford to be indifferent to their struggles. Private insurers sell the managed care plans that are the central vehicle for expanding access to middle- and lower-income Americans. One day, those plans may cover many of the 11 percent of Americans who remain uninsured.
Part of insurers’ difficulty is that the risk pool in the individual and small-group markets, particularly on the exchanges, is sicker and smaller than originally projected. But the three programs—reinsurance, risk corridors, and risk adjustment—that the ACA’s drafters would hope stabilize premiums in the revamped markets have also not performed as expected. Dashed expectations have led to market instability and to a flurry of lawsuits around the “3Rs.” What does this unpredictable and difficult situation mean for 2017 and for the ACA more generally?
HENRY KOTULA 