WellPoint Loses $110 Million on California Individual Business

January 31, 2011

WellPoint chief executive officer Angela Braly said in a conference call with Wall Street analysts last week that her company lost $110 million in the individual health insurance business in California in 2010. 

“We have recently filed additional rate increases for that market,” she said, adding, “We ultimately believe that appropriate rate increases will be approved and obtained in order to maintain the sustainable market for individual members in California.”

Add this to the debate over whether the company was justified in seeking rate increases in the state.


Quote of the Day: Wayne DeVeydt

January 31, 2011

WellPoint chief financial officer Wayne DeVeydt during the company’s fourth-quarter 2011 earnings call.

We continue to believe that underlying medical trend will increase in 2011, and we are reflecting this assumption in our pricing.

Quote of the Day: Carl McDonald

January 24, 2011

Equity analyst Carl McDonald of Citi on UnitedHealth Group’s stock price:

Utilization will have to remain at its unusually low level in order for United’s stock to maintain its 11x multiple — With the market trading at 13.6x, United is now at less than a 20% discount. This makes some sense if volumes stay low, but the discount is harder to justify in an era of minimum MLRs, premium rate regulation, deteriorating Medicare margins, and the pressure exchanges will likely put on commercial margins in the future.

Dental Plans See Continued Shift to Voluntary Benefits in 2010

January 24, 2011

The continuing shift to voluntary benefits was the main story in the dental insurance market in 2010, as insurers struggled to strike a delicate balance between affordability and providing meaningful benefit packages to members, according to the latest issue of Health Plan Market Trends Letter. An MTL tally shows total membership in 2010 up about 1% to 67.677 million among eight leading plans. According to the National Assn. of Dental Plans, dental insurance enrollment in 2009 declined – dropping 5.7%.  NADP reports that about 166 million Americans have some form of dental coverage. NADP reports a continue trend toward dental PPO plans and continued movement away from dental HMOs and indemnity plans.

Blue Shield-CA Takes Turn in Hot Seat Over Premiums

January 18, 2011

Blue Shield of California remains in the hot seat concerning individual rate hikes averaging 15% annually for 2010 and 2011; in some cases the rate of increase is as high as 59%.  The increases impact 194,000 individual plan members.  Blue Shield notes that despite the increases, its individual plans will lose $10 million to $20 million in 2010 and another $20 million to $30 million in 2011. 

The hikes are in line with cost trends, Blue Shield says, noting that the price of medical services is rising 7% annually, utilization is up 5%, and the health plan’s share of costs is up 3%.  Specifically, Blue Shield says, hospital costs rose nearly 15% in 2010, drug costs 12% and physician costs 9%.  Similar increases are expected in 2011. 

In accordance with state law — and following a public outcry — Blue Shield announced it had hired a third-party actuary to review the increases and make public the findings.  The actuary — David Axene — embarrassed WellPoint last year by finding a significant error in the company’s justification for requesting rate hikes of up to 39%.  WellPoint had to reduce the rate of increase.

While agreeing to a third-party review, Blue Shield didn’t agree to a request by California Insurance Commissioner David Jones to delay the increases until March 1 to give the state time to conduct its own review. Jones doesn’t have authority to reject the rate hikes; however, he says his office will still conduct a review.

It seems to me Blue Shield has struck the correct balance.  If Axene finds the increase aren’t justified, the company has agreed to make refunds.  If he finds the increases are justified, it’s pretty hard to question his credibility.

HealthParterns, Lowes, Sanford Health Join ACO, Medical Homes Conference

January 14, 2011

The 2nd annual ACOs, Medical Homes and Health Plan Partnerships conference, Friday, March 25, 2011, in New York City, is shaping up to be an information-packed day. 

Among the speakers: 1. Ruth Krystopolski, president of Sanford Health Plan, who will discuss how her organization has successfully worked with risk sharing and capitation for years; 2. Bob Ihrie, senior vice president of benefits for Lowes Companies, a top human resources executive who is going to talk about his company’s direct contracting relationship with Cleveland Clinic for heart surgery.  3. Babette Apland, senior vice president of health and care management for HealthPartners, who will assess the opportunities and pitfalls of changes to the delivery system envisioned by reform. 

Featured Speakers:

Babette Apland, SVP, Health and Care Management, HealthPartners
William Gillespie, M.D., Chief Medical Officer, EmblemHealth
Dennis Horrigan, President and CEO, CIPA WNY IPA Inc.
Bob Ihrie, SVP, Benefits, Lowes Companies
Ruth Krystopolski, President, Sanford Health Plan
Carl Mercurio, President, Corporate Research Group

Why IT Will Rule the Future of Health Plans

January 13, 2011

It is my view that managed care information technology will play an increasingly important role in the future survival and success of health plans.  That’s why I’m happy to announce such a strong agenda of speakers for our second annual Next Generation in Managed Care IT conference, Monday, March 28, 2011 in New York City.  (Yes, I know, this is basically an ad I’m writing here; but last year’s event was sold out, so I thought I’d give you all a heads up).

Here’s the line-up of speakers and the agenda.  I’ll be moderating the day’s proceedings.  (Despite that, you really should attend; it’s going to be an information-packed day).  Click here to register.

Keynote Speakers

Joseph Brand, Chief Technology Officer, Horizon BCBS of New Jersey

Meg McCarthy, EVP of Innovation, Aetna Inc.

Bill Wray, CIO, BCBS of Rhode Island


Featured Speakers

Anne-Marie Audet, VP, Quality, Improvement , Efficiency, Commonwealth Fund

Peter Goff, Acting Senior Director, IT, Alameda Alliance For Health

Pamela Larson, Director, Consumer Health, Kaiser Permanente

Tom Lutzow, CEO, Independent Health Plan

Carl Mercurio, President, Corporate Research Group

John Moore, Managing Partner, Chilmark Research

Jeffrey Pankow, Director IT, Excellus BCBS

Troy Stillwagon, Director of Information Systems, Scott & White Health Plan
Jessica Zabbo, Provider Technology Supervisor, BCBS of Rhode Island 

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