News & Press: NAIFA-Wisconsin E-Newsletter

2017 Health Plan Developments in Review

Friday, January 5, 2018   (0 Comments)
Posted by: Terrence P. Frett, CESB, ChHC, REBC, RHU, CLU, CPC
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The year of 2017 began to unfold with optimism for legislative changes to the Affordable Care Act. After a prolonged legislative process of no new legislation passed out of the Congress, the law remains unchanged.

As a consequence, we saw the continued erosion of the individual health insurance marketplace that began in 2017 and cascaded as the open enrollment began for 2018. Since the formal implementation of the Affordable Care Act in 2014, the individual health insurance market in Wisconsin has gone from 25 insurance carriers offering policies to consumers, to less than 14 carriers that remain in the market today. At the same time, the premium cost for the second lowest Silver individual health plan option increased, on average, over 50 percent in the 72 counties according to a market report published by the Office of Commissioner of Insurance.

The small employer health insurance market (employers with 2 to 50 employees) saw the extension of “Transitional Relief” (opportunity to extend their grand-mothered plan from 2013) for an additional year (through 2018) as a result of an order from the Trump administration. We saw the further expansion of level funded health plan offerings as an opportunity to achieve a lower health plan cost based upon the positive health status of the group. The level funding plan options will continue to expand as “Transitional Relief” sunsets at the end of 2018.

Employers with 50 or more employees did not experience the insurance market volatility since the Affordable Care Act has not required the same market mandates of limited Metal Plan options and community rates. However, even large employers were exposed to increases in the cost of their health plans as a consequence of their group’s actual claim experience. In particular, the area of prescription medication continues to escalate with prescription costs averaging over 20 percent of a group’s total health care expenditures.

The challenge going forward will be affording the new pharmaceutical breakthroughs for targeted medical conditions. The new breakthroughs in some cases provide potential cures through drug therapies. We have already experienced the success of the drug therapy Harvoni that began in 2015, and has proven to be over 96 percent effective in curing patients diagnosed with Hepatitis C after a 100 day course of treatment that costs $100,000. For 2018, we have seen the approval of the first two genetically engineered therapies to cure two forms of blood cancers. In August of 2017, the FDA approved CAR-T therapy to treat advanced cases of childhood leukemia. The science behind the therapy involves genetically engineering a patient’s own blood cells to destroy the blood cancer. The treatment cost is estimated at $475,000. In 63 case studies that the therapy was provided, 83 percent of the patients had gone into remission. This new living drug therapy approval was then followed up in October with the approval of Yescarta Therapy to treat adults with advanced lymphoma. The same concept is used with reprograming the patient’s T-Cells to kill cancer cells. 

The insurance marketplace saw the further expansion of focused provider networks offered through health insurance carriers. Anthem Blue Cross started offering the Blue Priority Network back in 2014, but began promoting the focused network in 2017 as an opportunity to control and manage a group’s health care spending. In 2017, Humana launched the Wisconsin Value Network which included Ascension, Aurora and ProHealth but excluded Froedtert/Medical College and Children’s. In most cases, the adoption of the focused network resulted in a 10 percent or greater premium reduction. 

We experienced the continued expansion of provider direct health insurance plans. Network Health, who is owned by Ascension and Froedtert/Medical College, began marketing aggressively in the Southeastern Wisconsin market in 2017. The former Unity (owned by UW Health), Physicians Plus (owned by Meriter) and Gundersen Plan (owned by Gundersen Clinic) merged in July of 2017 and formed the second largest health insurance carrier in Wisconsin called “Quartz.” This trend will continue, as we move into 2018 with the continued mergers and acquisitions of health care systems.

In December alone we have received news of mega mergers involving health care systems. The one that hits closest to Wisconsin was the announcement that Aurora would be merging with Advocate Health (Chicago area provider system). The combination of these two health care systems would create the 10th largest non-profit health care system in the United States. Soon after the Aurora announcement came, the announcement from Dignity Health and Catholic Health Initiatives to create the largest non-profit health care system, even surpassing Ascension Health who is presently the largest non-profit health care system in the United States and the second largest in Wisconsin. Added to this is the announcement from CVS Pharmacy of their plans to acquire Aetna Health Insurance Company, and this trend of mega mergers makes you wonder what will happen next and how does this improve the quality and cost of health care.

As the calendar changes to 2018, I feel confident in making the following predictions for further health care and health insurance developments:

         Provider Delivery Systems

o   Wisconsin will continue to see the influence of large out of state health care systems acquiring local providers. We have already witnessed the acquisition of Columbia/St. Mary’s, Ministry Health, Affinity Health and Wheaton Franciscan by Ascension Health and the acquisition of Dean Health, Previa 360 and the Agnesian System by SSM Health.  I predict in 2018 further acquisitions will take place, leaving fewer community owned health care systems in our state.

         Insurance Carrier Acquisition

o   The announcement of CVS acquiring Aetna would signal additional acquisitions of health insurance carriers. I predict another major health insurance carrier acquisition will take place in 2018.

         Pharmacy

o   I predict that the release of the two genetically engineered drug therapies in 2017 will lead to real cures for specific forms of blood cancers.

         Individual Health Marketplace

o   A state can request what is called a “1332 State Innovation Waiver” to implement creative changes to restore the individual health insurance market in their specific state.  I predict the State of Wisconsin will file for the 1332 waiver and if granted, they will reinstate the Health Insurance Risk Sharing Pool (HIRSP) to help save the market for individual consumers in 2019.

The one constant in 2018 will be change. I want to wish you a Happy and Healthy New Year!


National Association of Insurance and Financial Advisors-Wisconsin

Regional Office
600 State Street, Suite A
Cedar Falls, IA 50613