A Nod to Healthcare Reform

health-care-reformThe recent landmark 5-4 decision by the Supreme Court to uphold the provisions of the Patient¬†Protection and Affordable Care Act (PPACA) has caused a flurry of response from various media outlets. ¬†It‚Äôs been interesting to follow the myriad of opinions ‚Äď the good, the bad, and the ugly. Many were¬†shocked to see the individual mandate, a law that will extend healthcare coverage to more than 30¬†million uninsured, be ruled constitutional, claiming that it meddled too aggressively in state affairs and¬†the lives of private citizens. One thing became certain though much to the dismay of 26 states who¬†opposed the law, beginning in 2014 most Americans will now be required to obtain health insurance or¬†pay a penalty. Employers must also offer full-time employees and their dependents affordable coverage¬†with a minimum value or be subject to the same fate.

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Towers Watson and Extend Health

The news that Towers Watson is going to purchase Extend Health is a very interesting development in the retiree health benefit landscape.¬† Previously, it appeared Extend Health was planning to go public via an IPO process, the S-1 filing for which can be found here on the SEC’s Edgar database.¬† At 6.5 times forecast FY 2012 revenue, who can fault Extend Health for selling at that valuation?
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A judge’s misunderstanding of Medicare

The following article appeared in the Providence Journal on February 6, 2012:

A judge’s misunderstanding of Medicare
February 6, 2012


Judge Sarah Taft-Carter’s decision to freeze the City of Providence’s plan to move retired police and firefighters into Medicare is counter to the interest of both taxpayers and retired police and firefighters.
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Alternative to pushing Medicare eligible retirees on to the individual market

There is a significant movement among private sector employers to shed retiree health care obligations by moving retirees to the market for individual policies.¬† Employers may or may not provide funds for them to purchase insurance policies on their own.¬† This approach is labeled the “Medicare Exchange” model and there are several companies that specialize in facilitating this process.
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Pharmacy Carve-Out: 7 Advantages Employers Need to Know

Why Carve Out Your Pharmacy Benefits?

The first step is the process is to define the difference between a pharmacy “carve-out” and a pharmacy “carve-in”.

A Pharmacy Carve-Out

A pharmacy “carve-out” is when a plan sponsor chooses a Pharmacy Benefit Manager (PBM) to administer and manage prescription drug benefits that is separate from the PBM contracted with the health plan administering their medical claims. The carved-out Rx plan can be fully insured or self-funded.
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Extend Health and the Medicare Exchange Model

After the recent S-1 filing for Extend Health’s IPO this seems like an appropriate time to comment on some of the drawbacks to the so called “Medicare Exchange” model (sometimes referred to as a “Medicare Coordinator” or “Medicare Marketplace”) of which Extend Health is the largest provider. AON Hewitt Navigators, a result of AON Hewitt’s acquisition of Senior Educators, is another major provider. The purpose of a Medicare Exchange, like Extend Health, is to help a large employer move from a group benefit plan for Medicate eligible retirees to individual insurance policies.
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5 ways you can save a million dollars on your organization’s healthcare cost next year.

1.¬† Carve out your pharmacy benefit from your health plan.¬†¬† Health Plans are not set up to control the cost of prescription drugs.¬† They don’t aggressively negotiate the cost of drugs or effective cost containment strategies. ¬†¬†If the pharmacy costs are not separated they can’t be monitored or controlled.
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