Practice what you Preach: NAHU’s Ideas in Action

1. Practice what you Preach: NAHU’s Ideas in Action Presented by: Susan Rider April 21, 2011

2. Practice what you Preach: NAHU’s Ideas in Action Susan Rider- President Indianapolis Association of Health Underwriters 2 Hour Continuing Education Course Provider: Indy AHU

3. Since this course was filed, PPACA became the law of the land. NAHU’s Healthy Access Plan would help reduce the number of uninsured, there is no guarantee that any of NAHU’s recommendations will be adopted. Fortunately, there are a number of actions that insurance agents can take TODAY that will help to stabilize their clients’ rapidly rising health insurance premiums and to ensure that more employees take advantage of the health insurance coverage offered by their employer. Our goal is to give you a few ideas… Course Objectives

4. Constraining Medical Costs

5. Administrative Expenses:a convenient scapegoat Administration 12% Claims Cost 88% American Academy of Actuaries September 2009

6. Summary of Activities by Functional Category • Marketing • Provider & Medical Management • Account & Member Administration • Corporate Services American Academy of Actuaries September 2009

7. Behavior & Lifestyle Administration 12% Other Claims Cost 72.9% Behavior 15% Aon Consulting, Research Brief “The Impact of Consumer-Directed Health Plans with Integrated Health Improvement Services on Health Care Consumers,” 2007

8. Centers for Disease Control & Prevention, 2006 Behavioral Risk Factors Surveillance System Constraining Medical Costs Behavior & Lifestyle: Weight Gain ’86-’06 No Country Can Fund All the Consequences: Hypertension Type 2 Diabetes Osteoarthritis Stroke Coronary Heart Gallbladder Sleep Apnea Respiratory Issues Some Cancers 2006 1993 1985 1986 1987 1988 1989 1990 1991 2005 1992 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 1994 Obesity Trends Among U.S. Adults (BMI>30%) No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

9. NAHU’s Ideas Incorporate wellness and disease-management into all government employee programs Encourage employer wellness programs What You Can Do Recommend Consumer-Directed Plans: the first step to getting employees to care what health care costs. Recommend Wellness Programs with incentives to participate Behavior and Lifestyle: Solutions

10. System Inefficiencies Administration 14% Other Claims Cost 67.6% Behavior 15% Inefficiencies 3.3% PriceWater Coopers, “The Price of Excess” April 2008

11. NAHU’s Ideas Improve system inefficiencies in doctor and medical facilities Federal standards for interoperable electronic medical records What You Can Do Consumer-directed health plans will incentify consumers to police doctors who order duplicate or high-dollar procedures Use transparency tools and third party vendors to locate more efficient providers Portable electronic medical records might be a short-term fix System Inefficiencies: Solutions

12. Medical Malpractice Administration 14% Other Claims Cost 62.6% Behavior 15% Inefficiencies 3.3% Malpractice 5% Towers Perrin, “U.S. Tort Costs: 2005 Update,” March 2006 PricewaterhouseCoopers, “The Factors Fueling Rising Healthcare Costs 2006,” February 2006

13. NAHU’s Ideas Malpractice reform limits What You Can Do Communicate ideas of tort reform with your legislators! Medical Malpractice: Solutions

14. Cost Shifting Administration 14% Other Claims Cost 45.1% Behavior 15% Inefficiencies 3.3% Government Cost Shift 9.5% Malpractice 5% Uninsured Cost Shift 8% • Margaretann Cross, “Confronting the • Medicare Cost Shift,” Managed Care, Dec. 2006 • 2003 Health Affairs, “Kaiser Commission Report on Medicaid & the Uninsured”

15. NAHU’s Ideas Require Medicare, Medicaid, and SCHIP to reimburse doctors and hospitals at same level as the Federal Employees Health Benefit Plan. Provide incentives for states to streamline the application process for government programs. What You Can Do Grassroots – make consumers angry by educating them through presentations, the media, etc. Cost-Shifting: Solutions

16. Government Cost-Shifting to Hospitals Breakeven Premera Blue Cross, May 2006: Payment Level Comparison Between Public Programs and Commercial Health Plans for Washington State Hospitals and Physicians

17. NAHU’s Ideas Require Medicare, Medicaid, and SCHIP to reimburse doctors and hospitals at same level as the Federal Employees Health Benefit Plan. Provide incentives for states to streamline the application process for government programs. What You Can Do Grassroots – make consumers angry by educating them through presentations, the media, etc. We only have 20k members, but millions of voters can get the legislators’ attention. Donate to HUPAC and ISAHUPAC Transparency – make sure members are using transparency tools that are already available Cost-Shifting: Solutions

18. Decreasing Utilization Administration 14% Other Claims Cost 45.1% Behavior 15% Inefficiencies 3.3% Government Cost-Shift 9.5% Malpractice 5% Uninsured Cost-Shift 8%

19. NAHU’s Ideas Expand consumerism Health Savings Accounts (HSAs) Health Reimbursement Arrangements (HRAs) Flexible Savings Accounts (FSAs) Increase health care cost transparency What You Can Do Expand consumerism Health Savings Accounts (HSAs) Health Reimbursement Arrangements (HRAs) Flexible Savings Accounts (FSAs) Promote transparency tools Decreasing Utilization: Solutions

20. Access for All

23. Are you listening to what people are saying? Your clients are… • We get info from NAHU, but our clients don’t. • If we don’t educate our clients, where will they get their information?

24. February 2005 Blue Cross Blue Shield Association analysis of Census Bureau’s “Income, Poverty and Insurance Coverage” report Most Uninsured Not A Crisis 46 Million Considered Uninsured: Eligible for Government Program (but not signed up) 34% 80% $50,000+ Annual Income 32% Temporarily Uninsured 14% Long-Term Uninsured 20%

25. NAHU’s Ideas The federal government should require that all states have at least one private guaranteed purchasing option (risk pool). Seed grants to states creating high-risk pools Risk-pool premium subsidies to low-income citizens and older beneficiaries to help ensure continued coverage for early retirees. What You Can Do Help!!! People need assistance understanding and enrolling in: Risk pool SCHIP Medicaid Medicare LTC partnership Eligible for a Government Program

26. Indiana’s Uninsured Children • 131,000 Children Are Uninsured in Indiana • 􀂄 More than one in 13 children in Indiana is uninsured (7.9 percent of Indiana’s children). • Indiana’s Uninsured Children Come from Working Families • 􀂄 The vast majority of uninsured children in Indiana (95.3 percent) come from families where at least one parent works. 􀂄 Approximately two-thirds of uninsured children (67.1 percent) in Indiana live in households where at least one family member works full-time, year-round. • 􀂄 Still, 48.2 percent of Indiana’s uninsured children come from low-income families (families with income below twice the poverty level, or $35,200 for a family of three in 2008) who are likely eligible for Hoosier Healthwise. • Most Uninsured Children in Indiana Come from Two-Parent Households • 􀂄 Among uninsured children living with a parent, more than half (62.3 percent) live in two-parent households. 2008 Analysis conducted by the Census Bureau for Families USA

27. Karma Good things happen to good people! When you help others… • You gain a new perspective and may be able to identify new opportunities. • They sometimes refer business to you.

28. NAHU’s Ideas Educate lawmakers and the media about the true makeup of the uninsured. What You Can Do We’re the salespeople – if people aren’t signing up, we’re to blame. Maybe we’re selling the wrong product or using the wrong approach. Every time we sell a group and don’t get 100% participation, we’re contributing to the number of uninsured. $50k+ Annual Income

29. NAHU’s Ideas Educate lawmakers and the media about the true makeup of the uninsured. What You Can Do Sell short-term policies to employees in their waiting period – get the employer to sell it for you. Recommend short-term policies when people quit in lieu of COBRA. Send brochures with the COBRA notice. Short term policies: an affordable option for dependents. Temporarily Uninsured

30. CRISIS!!! • 47 million uninsured Health Insurance Crisis • Health insurance is expensive because health care is expensive: Health Care Crisis • Maybe we’re to blame – it’s a behavioral issue: Health Crisis • Center for Health Care Strategies: Health Literacy Crisis

31. What is Health Literacy? Health Literacy is the ability to read, understand, and act on health care information. More specifically, functional health literacy is “the ability to read and comprehend prescription bottles, appointment slips, and the other essential health related materials required to successfully function as a patient.” – AMA Council of Scientific Affairs

32. Why is Health Literacy Important? Studies show that limited literacy skills are a stronger predictor of an individual's health status than age, income, employment status, education level, and racial or ethnic group. CHCS strives to improve health literacy for people in government programs like Medicaid & Medicare.

33. People with low functional health literacy are less likely to: • Understand written and oral information given by physicians, nurses, pharmacists, and insurers . • Act upon necessary procedures and directions such as medication and appointment schedules. • Be able to navigate the health system to obtain needed services.

34. People with low functional health literacy are more likely to: • Receive health care services through publicly financed programs, even after controlling for such factors as age, education, or socioeconomic status. • Incur higher health care costs. A study of Medicaid patients found those reading below third-grade level had average annual health care costs four times those of the overall Medicaid population.

35. Who Has Health Literacy Problems? Health literacy problems affect people from all backgrounds, especially those with chronic health problems. • Older people, non-whites, immigrants, and those with low incomes are disproportionately more likely to have trouble reading and understanding health-related information . • Those with poor health literacy are more likely to have a chronic disease and less likely to get the health care they need. But you can’t tell by looking. • Even practitioners who have worked with low-literacy patients for years are often surprised at the poor reading skills of some of their most poised and articulate patients.

36. Impact of Low Health Literacy Skills on Annual Health Care Expenditures • Poor health literacy can have profound financial consequences. In 2001, low functional literacy resulted in an estimated $32 to $58 billion in additional health care costs. • According to the National Adult Literacy Survey (NALS), as many as 44 million people (age 16 and older), or 23% of all adults in the United States are functionally illiterate. • An additional 28% of all adults — 53.5 million people — had. only marginally better reading and computational skills. • This suggests that nearly 50% of all adults may have problems understanding prescriptions, appointment slips, informed consent documents, insurance forms, and health education materials.

37. Health Literacy and Understanding Medical Information Patients with poor health literacy skills struggle to understand basic medical forms and instructions. • It is especially difficult for less literate patients to fill out intake forms, enroll in insurance programs for which they may be eligible, get services once enrolled, follow medical instructions, or give informed consent. • Most informed consent and insurance forms, and most medication package inserts, are written at high school level or higher. • Of 979 emergency department patients with inadequate health literacy: • 81% could not read the rights and responsibilities section of a Medicaid application. • 74% did not know if they were eligible for free care.

38. Strategies to Assist Low-Literate Health Care Consumers • Surrogate readers / family members can help patients understand key information. • Tailoring medication schedules to fit a patient’s daily routine / color coding medicines • Providers can ask patients to “teach back” by restating the instructions. • Use commonly understood words: “keeps bones strong” instead of “prevents osteoporosis” • Slow down and take time to listen. Create an atmosphere of respect and comfort. • Limit info given to patients at each visit. Less than half of the info provided during each visit is retained.

39. NAHU’s Ideas All health insurance consumers, both private and public, should have access to quality information and assistance regarding their health care coverage. NAHU will assumeresponsibility for training insurance agents in all coverage options, both public and private, through the creation of a designation program—the Certified Health Care Access Advisor. What You Can Do CHCS educates people in government programs - it’s the agent’s job to educate people covered by private insurance Health literacy starts with understanding your coverage & how to access benefits. The agent should be both teacher & coach. Public/Private Producer Community Education Partnership

40. Commencement “This isn’t so much a commencement – an ending – as it is a new beginning.”

41. Lesson Plan • Consumer-Directed Plan Designs • Transparency • Wellness • Education & Communication • Tying it all Together

42. Consumer Directed Health Care “managed care is fading away” - Chaliese Rippey

43. Consumer Directed Health Care • Starts with a consumer directed plan as an option: • Flexible Spending Accounts (FSA’s) • Health Reimbursement Arrangements (HRA’s) • Health Savings Accounts (HSA’s) • Consumerism includes much more than just plan design • Give employees choices – that’s part of consumerism. • Defined contribution and dual option strategy. • 8 year projection of $350 rate at just a 10% annual increase $350 - $385 - $424 - $512 - $564 - $620 - $682 - $750

44. Transparency Tools • Price Transparency • Carrier Tools • Third-party pricing guidance • Quality Transparency • If we only compare price, we turn health care providers into a commodity • Carrier Tools • Consumer reports and third-party quality guidance • Legislative initiatives and the future of transparency

45. Wellness Programs • What Is “Wellness?” / Overview • Reducing Risk Factors • What A Complete Wellness Program Looks Like • Engaging Employees in Wellness • Case Studies • How To Measure Results

47. Education and Communication • Employer Proposal • Employee Communication Pieces • Enrollment Meeting • Benefits Websites

48. Employer proposal • Stop spreadsheeting! Identify what makes each plan unique. • Define all insurance terms and acronyms • Make it look easy to understand. Use pictures. • Introduce out-of-the-box solutions with multi-year projections • Make a recommendation! The employer wants guidance.

49. Rx Member pays $10-30-50 Doctor Member pays $35 Other In-Network Services Member pays 100% of first $3,000 Member pays 20% of next $15,000 Insurance pays 80% of next $15,000 Insurance pays 100% up to $5 million Monthly Premium

50. Rx Member pays $10-30-50 Doctor Member pays $35 Other In-Network Services Member pays 100% of first $500 Member pays 20% of next $17,500 Employer pays 80% of next $2,500 (MERP) Insurance pays 80% of next $15,000 Insurance pays 100% up to $5 million Monthly Premium