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CaliforniaChoice offers you and your employees seven health plans across the state from which to choose. (NOTE: update to “eight” once Oscar is added.) If you’re in Northern California, one of your options is Western Health Advantage, which prides itself on being a regional favorite.

Headquartered in Sacramento, the non-profit HMO was launched in 1996 by community-based doctors and health care providers. Western Health Advantage is committed to serving the needs of thousands of the region’s residents – from San Francisco to Sacramento, Alameda to San Jose, Fairfield to Folsom, and points in between. The 13-county service area includes Sacramento, El Dorado, Placer, Yolo, Colusa, Solano, Napa, Sonoma, Marin, San Francisco, San Mateo, Alameda and Contra Costa counties.

Western Health Advantage has consistently earned recognition for its high quality, its value to members, and a reputation for acting with integrity and interacting honestly with its partners. In fact, 94.7 percent of Western Health Advantage’s providers say they would recommend the health plan to other physicians’ practices and colleagues, based on the 2016 National Committee for Quality Assurance (NCQA) Provider Satisfaction Survey.

The Western Health Advantage network includes thousands of trusted doctors and specialists from leading medical groups, including:

Members can also choose from 30 hospitals in the Western Health Advantage network. (For up-to-date information on the available health plan providers, visit their website.)

Once you and your employees become Western Health Advantage members, you have access to valuable health care services and tools, including:

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Ask your employee benefits broker about getting a Western Health Advantage quote for your Northern California employees. If you don’t already have a broker, we can help you find one who will meet with you and discuss how Western Health Advantage – and the other plans available through the CaliforniaChoice multi-carrier, employee choice private exchange – can help you control your employee benefits budget, while providing important protection for your employees.

 

The health insurance industry – like many others – uses a lot of jargon. For employers and employees, insurance terms are sometimes hard to understand. But, we can help. In this article, we will explain four of the most-common health insurance terms, so you’ll be better able to understand your health insurance and employee benefits.

 

What’s Premium?

Premium is the amount of money you pay for your (and your employees’) health insurance every month. Several things, including what type of coverage you select, determine the price you pay. The CaliforniaChoice multi-carrier, small business private exchange offers a variety of options for you and your employees, including Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), and Exclusive Provider Organization (EPO) plans as well as High Deductible Health Plan (HDHP) options and Health Care Service Plans.

Other factors influencing your cost are your age and the ages of your employees – and eligible dependents, if they are covered – as well as your home ZIP Code.

The premium for your selected coverage is fixed for the term of your plan, 12 months for most employer-sponsored coverage. The monthly amount could change at your renewal, when you will also be given the opportunity to shop and compare other options.

At its core, as with other types of insurance, your premium is the amount you pay in exchange for the promise by your insurance carrier to pay claims for covered services during your contract period.

Beyond the premium that you and your employees pay, you may have other out-of-pocket costs during your plan year. Those other costs include your annual deductible, copayment amounts (for doctor office visits or other services), and coinsurance, all of which we’ll explain below.

 

What’s Deductible?

Deductible is the amount you must pay each year before your health insurance plan starts to pay for covered services. For example, if your plan has a $1,000 deductible, you would need to pay $1,000 for what your health plan categorizes as eligible, covered services before your insurance begins to pay.

It’s also worth noting that some health plans have an in-network deductible, a separate out-of-network deductible, and, sometimes, a deductible for prescription drugs. Other plans have only one deductible for each insured person. If you have family coverage, your health plan very likely has a deductible for you and a separate deductible for your insured family members. Be sure to review your health plan details concerning your deductible before selecting your coverage or seeking medical care.

After you pay your annual deductible, your out-of-pocket costs are usually limited to your copayment amounts or coinsurance for covered services. Your insurance company will pay the rest of your covered health care charges.

Under the Affordable Care Act (ACA), preventive health care services – like shots and screening tests – are available at no cost and are not subject to a deductible. Copayments and coinsurance amounts do not apply either. Therefore, if you offer an ACA-compliant plan to your employees, they will be able to get some health care services at no out-of-pocket cost (beyond their contribution to the health plan premium, if any).

Generally, plans with lower monthly premiums have higher deductibles. Plans with higher monthly premiums usually have lower deductibles.

 

What are Copayments? 

Copayments are typically fixed dollar amounts you must pay (in addition to your deductible) when seeking medical treatment. If, for example, your health plan has a $15 copayment for a $100 doctor’s office visit, you would have to pay $15 and your insurance would pay the rest (if you have satisfied your annual deductible).

If you had not met your deductible, you would need to pay the full $100 charge, which you could count toward your annual deductible.

 

What is Coinsurance?

Coinsurance is usually a fixed percentage of the total cost for covered services that you must pay (in addition to your deductible) when seeking treatment. If, for example, your health plan has a 25% copayment for a $125 specialist office visit, you would have to pay $25 and your insurance would pay the rest (if you have satisfied your annual deductible).

If you had not met your deductible, you would need to pay the full $125 charge for the specialist office visit, which you could count toward your annual deductible.

 

Different services covered by the same health plan can have different copayment percentages or amounts. This is especially true when it comes to prescription drugs, lab tests, and visits to in- and out-of-network medical specialists. You will want to keep this in mind when selecting a plan – and when seeking treatment.

Plans with low monthly premiums generally have higher coinsurance, and vice versa.

If you are interested in an explanation of other health care-related terms, your employee benefits broker is a great source of information. If you do not already have a broker, we can help you find one who will meet with you to discuss your needs and provide you with a custom quote for CaliforniaChoice coverage for your employees.

Highlights/Key Takeaways

  • Higher revenue was reported by most of the country’s leading insurers in Q1.
  • Kaiser Permanente, California’s largest health plan by membership, continued to attract more members during the quarter – regionally and nationally.
  • Oscar Health, which will join CaliforniaChoice later this year, reported its first-ever profit in Q1 2018.

 

The country’s leading health insurers reported mixed financial results for the first quarter of 2018. Among the publicly traded insurers that offer coverage through the CaliforniaChoice small business, multi-carrier private exchange, it was a positive start to the year.

Anthem: Increased Income on Similar Revenue

Anthem, Inc., the parent of Blue Cross and Blue Shield plans across the country (including Anthem Blue Cross in California) had high net income for Q1. The company earned $1.3 billion in the quarter on revenue of $22 billion. That compares to $1 billion in income in Q1 2017 on similar revenue. Membership was 2.5 percent lower – 37 million nationwide – during the quarter as compared to 2017. Medicare plan growth increased 16 percent, while other enrollment was lower. Individual major medical coverage fell to 755,000 members nationally as compared to 1.9 million in 2017.

Centene: Dramatic 12-Month Growth

Centene, the parent organization of California-based Health Net and managed care Medicaid plans across the country, reported $338 million in net income on $13 billion in revenue. That is up significantly from $139 million in net income, on revenue of $12 billion, in 2017. At the quarter’s end, the St. Louis-based insurer was providing or managing health care for 13 million people.

UnitedHealth: Greater Earnings, Increased Cash

UnitedHealth Group, Inc., the parent of UnitedHealthcare, had a Q1 2018 profit of $2.84 billion, an increase from $2.17 billion a year earlier. Earnings per share were up sharply to $3.04 a share, from $2.37 per share last year. Revenue for the quarter was up 13 percent, much of it attributable to the health insurance and health services businesses (operating under the Optum brand). Cash flow and earnings were also positively affected by the company’s reduced income tax under the reform signed by President Trump in late 2017.

Other Results

Although not a publicly traded insurer, the non-profit health plan Kaiser Permanente also released information on its results for the first quarter. The company reported increased Q1 revenue and operating income for its nonprofit hospital and health plan businesses. Operating revenue was up about 12 percent to $20.3 billion, as compared to $18.1 billion during Q1 2017. Kaiser Permanente, California’s largest health plan, saw its membership grow to 12.2 million members nationwide, up 472,000 from the end of 2017.

Oscar Health, which operates in California and five other states nationwide, announced its first-ever profit. Oscar had Q1 2018 premium revenue of $300 million, three times that in the same quarter last year. Net profit was $7.4 million for the quarter. Oscar, which launched in 2012 and entered the California group market this year, will be offering small group coverage through CaliforniaChoice this fall.

 

 

Highlights/Key Takeaways for Brokers

  • California Assembly Bill (AB) 595 would give the state the opportunity to approve or disapprove proposed mergers involved health plans and health insurers.
  • AB 3087, which would establish an independent commission to set health care pricing, which would directly affect employer-sponsored, individual, and family health plans has been put on hold.
  • The so-called Universal Health Care proposal (Senate Bill 562) has stalled in the legislature, but could be revisited in 2019 (after the fall election).
  • Sponsors of two consumer-initiatives on health care have until late June to gather signatures to get either proposal on California’s November ballot.

Two proposed bills in the California legislature that could affect health care pricing in the Golden State and future health care-related mergers are attracting a lot of industry attention. State Assembly Bill (AB) 3087, sponsored by Ash Kalra (D-San Jose) would create an independent authority, the California Health Care Cost, Quality, and Equity Commission, which would review health care pricing for hospital stays, doctor’s visits, and many other medical services covered by commercial insurers. Assembly Bill 595, authored by Jim Wood (D-Healdsburg), would require health plans wanting to merge or acquire other health plans to receive prior approval from the California Department of Managed Health Care (DMHC).

 

AB 595: Merger Review Legislation

The measure on health care service plan mergers and acquisitions would give authority to the state’s DMHC to consider the potential impact of any consolidation on health care costs, quality, and care for Californians. Under the proposed law, the department could approve, conditionally approve, or disapprove of any proposed purchase, acquisition, or control agreement involving a health plan or licensed health insurer. Current law requires health plans to provide the state with notice of any planned merger; however, California has limited authority to review or comment on proposed affiliations between health plans and insurers.

The chances of passage for AB 595 are not known. It was approved by the State Assembly in January and referred to the State Senate for reading. It was read the same month and referred out to the Senate committees on Health and Judiciary in March.

September 30th is the last day for Governor Jerry Brown to sign or veto any bills passed by the state legislature during the current session.

 

AB 3087: Pricing Legislation

Under this measure, the new California Health Care Cost, Quality, and Equity Commission would set the rates for all commercial health plans, including those offered to employees by their employer as well as individual and family health plans. Rates would be based, at least in part, on what the federal government pays for services under Medicare. Maryland adopted a similar measure in 2014. Consumer groups and some of the state largest labor unions, including the California Labor Foundation, support the proposed legislation. The California Hospital Association, California Chamber of Commerce (CalChamber), and physician groups oppose the measure.

CalChamber says the legislation interferes with an employer’s ability to negotiate health plan benefits and costs for its employees, interferes with the state’s public exchange (Covered California) to negotiate with health insurers, reduces access to care, and creates an unnecessary added layer of bureaucracy for Californians. Advocates of the measure note many residents have seen dramatic increases in their health care costs, including deductibles that have increased faster than wages, so they so a review of health care pricing is warranted.

AB 3087 was amended by the California Assembly in early May, and then referred to the Committee on Appropriations. After a hearing set for May 16 was canceled at the request of the bill’s author, a hold was put on the measure just before Memorial Day. Committee Chair Lorena Gonzalez-Fletcher said she hopes work to control costs will continue and warned that inaction could threaten the state’s economy.

 

SB 562: Universal Health Care Legislation

While the Healthy California Act, Senate Bill (SB) 562, generated a lot of press last year, the single payer health care measure has not progressed very far in Sacramento. The proposed legislation that would create a state-run universal health care system stalled after its introduction in February 2017. It was last amended by the State Assembly on May 25, 2017, but no action has been taken since that time. Legislators could revisit the idea in 2019, after the fall 2018 election.

The California Association of Health Underwriters (CAHU), which advocates on behalf of consumers and health insurance professionals, is monitoring two health care-related (consumer-driven) initiatives that Californians could see on the ballot in November. These include Initiative 17-0048, the California Managed Health Insurance Premiums Initiative (also known as the Accountability in Managed Health Insurance Act) and Initiative 17-0047, the California Care Act, both of which are in the “signature collection” phase that closes in late June.

Your broker can help you stay up to date on what’s happening at the state and federal levels with regard to health care reform and regulation. If you don’t already have a broker, we can help you find one who will meet with you to discuss your needs and provide you with a custom quote for your employees.