Health Insurance premiums through the Massachusetts Connector Authority

The Boston Globe had an interesting column on the health insurance premiums charged through the Massachusetts Health Connector.   Here are some interesting facts we pulled from the column:

  • 178,000 people receive coverage through the Connector
  • 132,000 people receive Government subsidies
  • 46,000 do not received any Government subsidies
  • there are 84 different plans offered through the Connector
  • the average increase for all plans will be 6.3% in 2016

The most interesting thing is to consider what would happen if there were no Government subsidies?   A large proportion of the 132,000 would drop and in the end the enrolled probably would be under 50,000 subscribers.

In the end the Connector Authority has not become an exchange where carriers offer below market premiums to get low risk subscribers.  Instead it has turned into a marketplace where people can get government subsidies to buy health insurance.


Health Insurance rates

Massachusetts has near universal health coverage, why are rates still increasing?


According to this article in the Business Insider,

Massachusetts, which has the lowest uninsured rate of any state, also has several counties with near universal health insurance coverage rates, according to the U.S. Census Bureau.

Wasn’t universal health insurance suppose to lower premiums?   Unlike inanimate objects that costs less as you buy more like the infamous widgets in college, health insurance subscribers come with claims.

If you insurance more people, but they have alot of claims then your rates will go up.   In other words the number or percentage of people insured has nothing to do with the cost of health insurance.   Claims is what drives premiums more then anything else.

If you lower or contain claims then you will lower or control premiums.    There are two ways to lower claim costs.

  1. Avoid claims completely through wellness plans that prevent claims or catch them in the early stages.
  2. When claims can not be averted lower the actual costs of claims through insurance products that cost the employee more at higher cost facilities.

Admittedly this is an over-simplification but claim costs drive premiums not universal coverage.  It really is that simple.


Health Insurance rates

Fallon CEO Pat Hughes announces retirement

Pat Hughes

Pat Hughes

A few weeks back we wrote a blog that Fallon Community Health Plan was ripe for take-over.     After writing it, we heard back from several sources that Fallon was NOT For Sale.  

It is good to know that Fallon Community is “not for sale”, since it would be a huge loss to Worcester if they were to be bought out by, for example, Harvard-Pilgrim which is being run by former Fallon boss Eric Schultz.

Now today we hear Pat Hughes will be retiring.  What can we read into this?  We are not sure…  We all know the official word from Fallon will be that they are not for sale and that all is well.    What else would they say?

Eric Schultz

Eric Schultz

We hope that the City of Worcester is doing all they can to make sure Fallon Community Health Plans does not merge with a larger carrier and remains in downtown Worcester.   Maybe the local legislators can help them with the “Risk Adjustments” that just cost them almost $12 million dollars.

Here is hoping a new CEO is named shortly and who then commits to expanding  their presence in the Central Massachusetts.The next 6-12 months will be very pivotal for Fallon and the City of Worcester.




“Risk adjustment” payments

Just when you thought that you could not be confused anymore?   The program, called “risk adjustment,” is a provision of the Affordable Care Act (ACA) that takes effect this year and makes no sense at all.

Before we do get into that, keep this one thing in mind.  The only way you will ever control premiums is to control claim costs!   One would assume then that  ACA would reward those who insurance companies, employers and employees that control claim costs, right?

More or less “risk adjustment” payments are suppose help health insurance carriers that are getting hit with alot of claims.   Basically it is income redistribution but instead of taxing the rich and giving those monies to the poor, you penalize carriers that have low claims and transferring those monies to carriers with a high claims.

Better yet let me give you an example.  Lets say you have no health insurance, but you know that you will be having alot of health procedures.  Since there are no pre-existing condition limitation, everything will be covered but you had two choices:

  1. Health Insurance Company A that has limited networks and high co-payments for expensive drugs that has negotiated hard with their providers to come up with the lowest possible reimbursements to save the health plan money.
  2. Health Insurance Company B that has  every single hospital and lower co-payments.

Even if Company B was more expensive, you would pick them since you will be banging out the claims and want the best network with the lowest co-payments.   You would think Company B would be worried with all these claims and mounting losses, but they are not due to “risk adjustment” payments.  How much money are we talking?   Here are the results of the first Risk Adjustment process in Massachusetts as determined by the Massachusetts Health Connector:

  • Blue Cross Blue Shield HMO Blue, Inc. $49,839,020 received
  • Blue Cross Blue Shield of Mass., Inc. $1,836,923 received
  • Boston Medical Center HealthNet Plan $5,149,610 payment
  • Celticare $481,138 payment
  • ConnectiCare Massachusetts $1,243,072 payment
  • Fallon Community Health Plan $11,861,230 payment
  • Fallon Health and Life Assurance Company $850,658 received
  • Harvard Pilgrim Health Care, Inc. $480,259 received
  • Harvard Pilgrim Insurance Company $4,055,614 payment
  • Health New England $2,630,068 payment
  • Minuteman Health $3,064,679 payment
  • Neighborhood Health Plan $27,646,254 payment
  • Network Health $3,690,452 payment
  • Tufts Associated Health Maintenance Organization $6,826,667 received
  • Tufts Insurance Company $1,623,818 received
  • United Healthcare $1,635,227 payment

Check out this from the Boston Globe:

Thomas D. Policelli, chief executive of Minuteman Health, a small health plan founded in 2013, said the $3 million his plan is being assessed amounts to 71 percent of the premiums collected in 2014.

Are you kiddin me 71% of the premiums they collected!  Now that you know the only way to ever control premiums is to control the costs of claims how does rewarding companies that have high claims through  “risk adjustment” payments encourage that?

Humana received $549 million for their “risk adjustment” payment.


mass connector authority

Affordable Care Act, Health Insurance rates

Fallon follow-up, NOT FOR SALE

Needless to say we received many comments back on our last column titled,  Fallon Community Health Plans ripe for take-over?  

The message we received loud and clear is that Fallon is “NOT FOR SALE”, which we are very glad to hear.   If Fallon were to be bought by, for example Harvard-Pilgrim, this would be a huge loss to the City of Worcester.

Although the termination of the Fallon Total Care product greatly concerned us; here are some positive developments:

  • Summit Eldercare is doing great and expanding in Springfield and Lowell
  • Navicare is expanding (video below)
  •  There are some new commercial products in the 1-50 marketplace rolling out in 2016 that should hopefully increase membership.

A Fallon Community Health Plans that is growing and profitable is a good thing for Worcester.   Lets hope FCHP sends the same message to larger HMO’s, that we know would be interested, looking for growth that they are “NOT FOR SALE”.



Fallon Health Insurance Plans

CHIA Reports on the Performance of the Massachusetts Health Care System

The Center for Health Information and Analysis (CHIA) today announced the release of its 2015 Annual Report on the Performance of the Massachusetts Health Care System. The report includes a final calculation of the Commonwealth’s Total Health Care Expenditures for 2013 and an initial calculation for 2014, along with several other key indicators used to assess the performance of the state’s health care system in 2014.

Most notably, Massachusetts saw 4.8% growth in overall Total Health Care Expenditures between 2013 and 2014, exceeding the Commonwealth’s health care cost growth benchmark of 3.6% established in accordance with the state’s 2012 health care cost containment law. Total Health Care Expenditures accounted for $54 billion in spending—$8,010 per capita—by or on behalf of Massachusetts residents for insured health care services.

Health Insurance rates

Fallon Community Health Plans ripe for a take-over?

On the National Level we have seen many larger insurance companies merge.   A pair of mergers involve four of the nation’s five largest for-profit health insurance companies—Cigna Corp. and Anthem, Aetna Inc. and Humana Inc.

This got us to thinking about Paul Revere, State Mutual, Harleysville and Central Mass HealthCare.    Although Harleysville is not based in Worcester, all of these companies had a stronger presence in Worcester which was diminished after mergers.   Actually State Mutual was not a merger, but a take-over by a management team from Fidelity who changed State Mutual to Allmerica that did not work out so well.

Over the past 6 months, we have seen Fallon leave some markets and some very good long term employees leave.     Couple that with former leader of Fallon, Eric Schultz,  is now the CEO at Harvard-Pilgrim?

If Fallon were to be bought another HMO, like Harvrad-Pilgrim, this would not be a good thing for the City of Worcester.


***  last quarterly results from the Telegram  

Fallon Health of Worcester said it lost $2.5 million during the second quarter ended June 30. The insurer, which had 221,588 members, attributed the loss to factors such as the cost of specialty drugs and expenses to shut down the One Care health plan for people enrolled in both Medicare and Medicaid.

Fallon posted $321 million in revenue during the quarter.


Fallon Health Insurance Plans

Huge rate increases for ObamaCare in 2016



Remember when the White House explained that the huge hikes in Year 2 were due to all of the uninsured people suddenly having access to health insurance and that it would settle down?   Why are we having these large increases in year 3?

Very simple actually.  When you give people instance access to health insurance pretty much anytime they want without any pre-existing condition limitations, your claims experience is going to be awful.

Please note the Commonwealth of Massachusetts is not part of the Federal Exchange but run their own exchange, the Connector Authority.


Link to a story in HotAir

health insurnace increases 2016


Health Insurance Quotes

deductible coverageWe represent all the major carriers:

  • Blue Cross of Massachusetts
  • Tufts
  • Harvard-Pilgrim
  • Fallon
  • Neighborhood
  • Minuteman
  • Health New England

Are you paying too much?  Maybe you should look at a high deductible plan that will lower your premiums and use the savings to self-insure up to the deductible?  We can help you analyze all of your options.

All we need is a census for those employees covered on the health insurance:

  • date of birth or current age
  • single or family
  • if family, we need dates of birth or current age for all dependents (spouse and children)

We also know you are busy!! We can e-mail the analysis and review over the phone. E-mail us your census today!



Masssachusetts Wellness Tax Credit

When you mention implementing wellness plans, employers immediately say:
  • ” we can’t spend any money on that and it isn’t a good fit with our employees”
The Commonwealth of Massachusetts realized this, but they also know they only real way you can control health insurance premiums is to lower claims. How do you lower claims?  You need to have a healthier pool of subscribers!
As a result the Commonwealth of Massachusetts has passed a Massachusetts Wellness Tax Credit to incentivize employers to start  a wellness plan. How do they do that?
The Commonwealth of Massachusetts will let you get a tax credit up to 25% of all monies spent on eligible safety expenses to a maximum of $10,000, if you have a wellness plan.  Here are some expenses that are eligible:
  • safety consultants
  • uniforms
  • safety goggles
  • improvements to workplace safety
  • automatic external defibrillators
  • ergonomic furniture
  • keyboards
  • vending machines
  • lunchroom microwaves

If you like what you hear, all you need now if for us to show you how to start a wellness plan.  Here is a video from one of them:

vanessa wellness

Massachusetts Wellness Tax Credit, Uncategorized