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Lipitor, one of the most frequently prescribed medications for lowering cholesterol and preventing heart disease, is now available in generic form. Access to atorvastatin – the generic name for the drug – is going to save Indiana residents thousands of dollars. Here’s how:

According to the American Heart Association, heart disease is the leading cause of death in Indiana. Particularly alarming are the obesity rates (more than 65 percent) and the number of active smokers (more than 23 percent), both higher than the national averages. The state has the 14^th highest death rate from the disease in the country.

In the past, Indiana residents on high deductible health plans who were prescribed this medication had to spend about $80 a month for the drug.  Now that the generic version is available, the cost will decrease to just a few dollars for a 30-day prescription. Even residents on a co-pay plan will realize the savings; atorvastatin is expected to fall in the $10-or-less co-pay category.

On an individual level alone, this is great news. But it’s also going to benefit those enrolled in a group health plan. Employees in group plans will not only personally save money, but they’ll save their company money by reducing the overall claims. A large company that may have been spending more than $100,000 each year on Lipitor may now be able to reduce those claims by as much as 90 percent. As a result, the group health plans will have more buying power.

Some Indiana residents may be hesitant to make the switch. Although most generic medications are usually the same, the formulations can have minor differences. Keep in mind that if you do choose to continue taking Lipitor over the generic version, you will pay a higher cost – most health plans will categorize Lipitor as a Tier 3 drug, which means the co-pay would be substantially higher. Some carriers may choose not to cover it because the generic alternative is available. In that case, a person would likely be required to provide a letter from their doctor explaining why they have to take the brand name in order to get it covered.

For Indiana residents agreeable to the switch, the availability of the generic version of Lipitor should provide a substantial savings.

Are you or a loved one currently taking this medication? How does Lipitor going off-patent affect you?

Source: “Indiana Fact Sheet” American Heart Association (http://www.heart.org/idc/groups/heart-public/@wcm/@global/documents/downloadable/ucm_307172.pdf). Accessed December 10, 2011

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IBJ

The state of Indiana recently lost five individual health carriers from the market. For those working in the health insurance industry, this comes as no surprise. Below are the five companies that exited and the reasons for their departures:

American Community Mutual Insurance Co.

American Community left Indiana due to insolvency. The company had struggled for years to be profitable because of poor company leadership. Michigan’s Department of Insurance took over the company last year.

Pekin Insurance

 Though still practicing, especially in Illinois, Pekin Insurance is no longer active in the under-65 individual health market.

Guardian Life Insurance Co.

Guardian is a large, New York based insurance carrier. The individual health market in Indiana wasn’t a good fit for the company.

Cigna Corp

Cigna is a large group carrier that never offered significant individual health product in Indiana.

Aetna Inc

The loss of Aetna is a substantial blow to competition in Indiana’s individual health market.  Aetna offered a number of competitive products that were beginning to gain traction.  Recent statistics indicate the company still has more than 700 active policies in the state. 

Indiana’s health insurance market suffers from decreased competition. But the introduction of the Medical Loss Ratio (MLR) has made the reward in the individual market too risky for these companies.  The MLR is the percentage of your premium dollars an insurance company spends on providing you with health care, as opposed to what is spent on overhead and administrative costs.

Anthem and United Health Care are the most competitive carriers in the state, followed by a few small carriers like Humana, Assurant, and Medical Mutual of Ohio.

Have you been affected by any of these changes?

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 Forbes reported on the Government Accountability Office study children on Medicaid have lower access to health care and quality.

The study showed that Medicaid patients are 13% more likely to die than uninsured patients in a hospital. 66% of children covered by Medicaid were denied appointment with a specialist for an urgent medical condition.  The physicians do not want to deal with Medicaid.

With health care reform government is expecting 25 million people to join the Medicaid ranks.  This is going to lead to the rationing of care and two classes of health care. 

Indiana residents will be faced with tough decisions when it comes to the future of health care. Under the health reform law, if your house hold income is under $64,000 then you will qualify for Medicaid.  If you choose not to pay and take Medicaid the level of care will be much lower than an insured with private insurance.  There are now studies proving this. Most parents will never see the results of these studies because they will be suppressed.

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HL-ISY.com released a study showing a trend for small groups to shift towards a self funded health insurance. The report stated groups with as few as 50 employees could find savings in the self insured market.

We could see in the very near future where small employers entertaining taking on their employees medical risk in order to save money on health insurance premiums.

Stop-Loss Reinsurance products are being developed for small groups. This could create valuable options which would result in more choices for Indiana small group health plans.

The national carriers will not allow Third Party Administrators to get a market segment advantage. The national carrier will developed and market products to these groups. National carrier will develop administration only plans for small group.

Employers then will be able to weigh the pros and cons of a self funded health plan.  The self funded approach would give a small group an entirely new perspective on health care.

There are current  self funded plans in the Indiana market.

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My News 

Businessweek.com 

Reported a positive view of the Accountable Care Organization (ACO) The ACO is one of the main programs to reduce health care cost in the new health care law. This is really the 1^st publication that states this type of approach to health care can be successful.  The Gov. is developing this platform for Medicare but there seems to be a huge investment by the health insurance industry in this model. The health insurance industry is suggesting this could save 40%.

If this approach works for Medicare then we will see it in the private insurance markets. This could have a huge impact on Indiana health insurance.

The Indiana insurance Commissioner is asking for a waiver of Patient Protection and Affordable Care Act’s (ACA) 80 percent minimum medical loss ratio (MLR).

The commissioner states that 10% of the health insurance companies have left Indiana. If the waiver is granted that would encourage companies to stay in the individual health market. The commission is only asking the wavier on Consumer driven health plans.

There is a real problem in Indiana’s health insurance market with a lack of competition. There is serious concern that we could lose another large individual carrier.

Aetna recently left the individual market here in Indiana. The risk of loss was not worth the reward. What average people don’t see is that the individual market is not that profitable for the carriers. So now we have new laws on the medical loss ratio that could create even more risk for the carriers to offset individual loses.

I do believe the Commission is acting in the best interest of Hoosiers.

Chairman Max Baucus is not happy about the Mickinsey study that state 30% of employers will drop their group health plans after 2014. Chairman Baucus has order a full disclosure on the methodology of the study.

It will be interesting to see what methodology was used.

Being a health insurance broker with extensive experience in the small group market I think 30% is low. Groups under 100 lives I think we could see 50% of groups drop traditional employer sponsored health plans. This is not to say they will not replace them with some other approach to health care under the health care reform.  If employers can establish other qualified health plans through the exchange or guaranteed issued individual policies they will.

At this point I am not sure how large groups are going to be able to drop group health plans.  These plans are about attracting talented employees and retaining them. 

As Chairman Baucus reviews the methodology of the Mickinsey study he should also review the methodology of how the health care reform law was developed.

Nefouse News

As, I learn more about this option of individual plans it could turn out be a strategy for companies in the future.

IBJ Reported that so far only 18,000 people have enrolled into the plan. HHS was expecting 375,000.

The reality is the premiums for any high risk pool are high. They are high because the program can not sustain the high claims. 

For Indiana the premiums for the PCIP plans were already lower than the Indiana comprehensive health. So now with a premium reduction starting July 1st the new enrollment for the Indiana Comprehensive Health plan should stop. The only advantage now to the Indiana comprehensive plan is they will take anyone that has been declined. On the PCIP program you have to be without coverage for 6 months.

It will be interesting to see where the PCIP.gov rates go to.