state of the u65 and 65+ health insurance...

State of the U65 and 65+ Health Insurance Markets

Andy Dastur

For Agent Use Only | Copyright 2018

NALP Health Plan Conference | July 2018

State of Healthcare

State of the U65 health insurance market

State of the 65+ health insurance market


Agenda

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• Low transparency• CMS recently announced that they may require providers to disclose in

advance how much a given healthcare service costs

• High disparity of health care costs depending on how bill is paid• According to CMS, Hospitals issued $3.4 trillion in billed charges, but only

collected $897 billion • Which means that hospitals only collect 28.5% of what they bill• However, only 2-4% is considered “uncompensated”; the remaining is due

to insurance re-pricing


Healthcare Trends

• Prescription drug cost growth• According to CMS, Prescription drug costs are expected to grow faster then

general rate of health care inflation (6.3% vs. 5.3%) over the next 10 years

• Total Health Care Spending growth• According to CMS, annual health care spending is expected to rise to $5.7 trillion

in 10 years• That would mean that healthcare would be 19.7% of the U.S. economy vs. 17.9%

today

• New entrants to enter market to try to drive efficiencies in the system• The Amazon, Berkshire Hathaway, and JPMorgan Chase partnership - - named a

Harvard professor as CEO who’s specialty is healthcare system ‘waste’


Healthcare Trends


Healthcare Cost Growth

1960$27.2 billion 1970

$74.6 billion 1980$255.3 billion 1990

$721.4 billion2000

$1.4 trillion 2010$2.6 trillion 2016

$3.4 trillion 2026

(projected)

$5.7 trillion

• Health insurers reported 21+ million individual health insurance members• In 2018 there are reportedly around 11 million Obamacare members, a 4%

drop from the prior year• Nearly 90% receive subsidies• For those not receiving a subsidy, 36% pay over $1000 per month• Rate increases are again expected up to 30%• Advertising and Navigator budgets cut 90%• Individual mandate being eliminated in 2019• Short Term Major Medical policies are expected to be extended to 12 months

in 2019 (vs 3 month terms only)• CMS eliminated some cost sharing subsidies


U65 Health Insurance Market

• The uninsured rate is significantly higher over the last 2 years• 12.7% in 2016• 15.5% in 2018

• All age demographics saw an increase in the uninsured, but those 25-40 saw the biggest increase• In states that did not expand Medicaid (i.e. TX) the uninsured rate is

nearly 22%• With the proposed changes in 2019

• CMS expects 10% or around 1.1 million ACA members to drop their coverage• The CBO projects 4 million will drop their coverage• The Urban Institute projects 6.4 million will drop their coverage

• Those with high deductibles and/or high max out of pocket costs, are twice as likely to drop their coverage as those with low or no deductible.


U65 Uninsured Data

• Obamacare only for the low income• Networks continue to narrow• More alternative products to come into the market and sales will explode

• Alternative players will also enter the market• Market will be a ‘patchwork’ of health plan options (some strong, many

weak) that will further create market complexity and therefore need for expert advice• Continued technological advancements to make simpler, easier, and

faster• Government


Individual Health Insurance Predictions

• 55.5 million Medicare beneficiaries• 16.7 million Medicare Advantage members in 2017• Membership increased 7% • Total membership has increased 228% since 2007• Leading carriers: UHC, Humana, BCBS, Aetna, and Cigna• These top 5 represent 66% of MA membership

• 13.6 million Med Supp policyholders in 2017• 57% still choosing Plan F (over 60% in the prior year)• Leading carriers: UHC, MoO, BCBS, Aetna, and Cigna


65+ Data

• Medicare Advantage growth will slow, leading to more consolidation• With CMS now allowing more supplemental health related benefits,

there will be a push for more benefits • There will be greater demand for Medicare Advisors that are able to

‘stack’ additional benefits onto Medicare health plans • More carriers will enter the Medicare Supplement market due to the

low barrier to entry - - which will further drive down prices


65+ Medicare Insurance Market Predictions

Thank You!State of the U65 and 65+ Health Insurance

Markets


NALP Health Plan Conference | July 2018

state of the u65 and 65+ health insurance...

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