Need to Know: February 2014

BUSINESS

WellPoint Inc. is selling online contact-lens site 1-800-CONTACTS, which it acquired in 2012 from Fenway Partners, to private equity firm Thomas H. Lee Partners LP to focus on building its insurance business. Financial terms of the transaction were not disclosed. Additionally, WellPoint also plans to sell Glasses.com, part of the contact-lens retail operation, to Luxottica Group SpA. 

BUSINESS

Orlando Health Inc. has inked a deal with Florida Blue, Florida’s Blue Cross and Blue Shield company to form an accountable care organization designed to increase quality, enhance coordination of care between the two organizations, and decrease costs in the Orlando area. Florida Blue has approximately 4 million members and serves 15.5 million people in 16 states through its affiliated company. Orlando Health consists of approximately 500 employed physicians, both primary care and specialists, and eight hospitals, including MD Anderson Cancer Center.

BUSINESS

The Obama administration granted Iowa much of what Republican Iowa Gov. Terry Branstad’s request to move forward with a Medicaid expansion through the use of private insurance plans, but refused to allow the state to charge premiums for those who earn less than the federal poverty level. Those above the poverty line would pay a small portion of the premium, but the administration said the state could not charge those below the poverty line, which is currently about $11,490 for an individual or $19,530 for a family of three. Charging a premium for those below the poverty line would set a bad precedent, say some consumer groups and policy experts. No other state charges those enrollees. According to CMS, about 40 states allow for limited premium payments for some residents above the poverty level.

PHARMACY

Walmart and Sam’s Club pharmacies will be added to the preferred pharmacy network of the Aetna CVS/pharmacy Prescription Drug Plan (PDP) as of this year. The Aetna CVS/pharmacy PDP is available in 43 states and the District of Columbia. The plan's preferred pharmacy network comprises 4,200 Walmart, 580 Sam's Club and 7,500 CVS/pharmacy locations. The Aetna CVS/pharmacy Prescription Drug Plan offers a median $32 monthly plan premium, as well as low, fixed copayments for generic drugs. Plan members will pay a $2 copayment for nearly 800 preferred generic drugs in most states and a $1 copayment in all states for specialty generic drugs that are commonly used for the treatment of hypertension, high cholesterol and diabetes.

HEALTH MANAGEMENT

UnitedHealthcare has been recognized for its online and mobile programs and services that engage consumers in their health and make it easier for them to navigate the healthcare system, including recently earning three Best in Biz Awards. myClaims Manager earned Gold in the Consumer Service of the Year category; Health4Me received Silver in the Consumer Product of the Year category; and UHC.TV took Bronze in the Website of the Year category. The latest consumer innovation, myEasyBook, is an online healthcare shopping service that makes it easier and more affordable for consumers to make appointments with local healthcare professionals, including for same-day and next-day appointments. myEasyBook was a CES 2014 Editor’s Choice Award winner from USA Today. In addition, UnitedHealthcare’s Health4Me mobile application earned the 2013 eValue8 Innovation award for innovative programs that address critical healthcare issues. For more information about UnitedHealthcare's products and services, visit www.uhc.com.

ANALYSIS

A  Robert Wood Johnson Foundation brief summarizes the findings from major studies on public health and prevention (released between 2008 and 2013) show that strategic investments in proven, community-based
prevention programs save lives and money. According to “Return on Investment -- Saving Lives and Money,” preventing disease and injury is the most cost-effective, common-sense way to improve health; despite this fact, for every dollar spent on healthcare in the US today, only about 4 cents goes toward public health and prevention. For example, healthcare expenditures tied to smoking total $96 billion. Costs associated with conditions caused by obesity include more than $43 billion for hypertension and nearly $17 billion for diabetes. A variety of recent reports and studies show that strategic investments in proven, community-based prevention programs save lives and money.

ANALYSIS

Analysis from the Commonwealth Fund found that rising medical costs were the primary driver of recent rate increases by health insurers, accounting for three-quarters or more of the larger premium hikes requested between July 2012 and June 2013. The Affordable Care Act (ACA) requires health insurers to justify rate increases of 10% or more for nongrandfathered plans in the individual and small-group markets. Insurers attributed only a very small portion of these medical cost trends to factors related to the ACA. The ACA-related factor mentioned most often, but only in a third of the rate filings in this study, was the requirement to cover women’s preventive and contraceptive services without patient cost-sharing. But, the insurers who point to this requirement or other ACA-related costs attributed only about 1 percentage point of their rate increases to the health reform law.