CEOs at Aetna, Anthem Help to Reshape Health-Insurance Industry

via Wall Street Journal

Aetna CEO Mark Bertolini, left, walks with Anthem chief Joseph Swedish.
Aetna CEO Mark Bertolini, left, walks with Anthem chief Joseph Swedish.

The leaders of the top five health insurers periodically get together to discuss policy issues, Aetna Inc. Chief Executive Mark T. Bertolini told investors in a private meeting earlier this month. The group had a nickname, he joked: the G5. Soon, that could be down to the G3.

The change would come thanks to Mr. Bertolini, who has struck a $34 billion deal for Humana Inc., and Anthem Inc. CEO Joseph Swedish, whose company is seeking to acquire Cigna Corp. for $48 billion. The unprecedented tandem deals could reshape the industry into one topped by three giants, each with more than $100 billion in annual revenue. UnitedHealth Group Inc. would be the third major player and still the largest by revenue.

First, though, Mr. Bertolini and Mr. Swedish will have to run a gantlet of regulatory, political and operational challenges, sharing a joint spotlight that could make each of their jobs harder as they make a case for their combinations.

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Growth in Health-Care Spending Picks Up

via The Wall Street Journal

WASHINGTON—Growth in national health spending, which had dropped to historic lows in recent years, has snapped back and is set to continue at a faster pace over the next decade, federal actuaries said Tuesday.

The return to bigger growth is a result of expanded insurance coverage under the 2010 health law, a revived economy and crunch time as Medicare’s baby-boom beneficiaries enter their 70’s.

American spending on all health care grew 5.5% in 2014 from the previous year and will grow 5.3% this year, according to a report from actuaries at the Centers for Medicare and Medicaid Services published in the journal Health Affairs. In the years through 2024, spending growth is expected to average 5.8%, peaking at 6.3% in 2020.

The jump comes after five consecutive years of average spending growth of less than 4% annually—a rate touted by the Obama administration as the lowest since the government began tracking health spending in the 1960s and a sign that the health law’s Medicare provisions were helping rein in health costs.

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IRS Plans to End Approvals of Custom Plan Changes

via Lockton Retirement Services

Citing budget cuts, new responsibilities under the Affordable Care Act (ACA), and an increased number of requests, the IRS made the surprise announcement of intent to terminate the Determination Letter program by the end of 2016. With this significant change, sponsors of individually designed plans contemplating future changes—plan mergers or consolidations, or conversion to a new provider—should move quickly to take advantage of the program while it exists. Termination reviews will not be affected.

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Anthem Nears $48 Billion Cigna Deal

via Wall Street Journal

Anthem Inc. is nearing a deal to buy Cigna Corp. for more than $48 billion in a transaction that along with a previously proposed combination of rivals would shrink the five largest U.S. health insurers to just three.

Anthem, based in Indianapolis, is expected to pay about $188 a share for Cigna, of Bloomfield, Conn., according to people familiar with the matter. A deal between the two companies could be announced as soon as Thursday afternoon, one of the people said. The agreement hasn’t been signed, and it is possible that the timing could be delayed or deal terms changed.

The tie-up of Anthem and Cigna would accelerate the rapid-fire reconfiguration at the top of the U.S. managed-care industry. The biggest companies are seeking more cost efficiency and scale as the health-care landscape changes because of the Affordable Care Act and other factors.

The expected deal follows by about three weeks Aetna Inc.’s agreement to buy Humana Inc. for $34 billion. In a sign of the takeover frenzy among big health insurers, Cigna also vied for Humana but failed to arrange a cash-heavy offer that Humana had requested, people familiar with the matter said..

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EEOC Guidance Poses Risks for Employers That Limit Spousal Health Coverage to Opposite-Sex Spouses

via Lockton Benefit Group

In a ruling long anticipated and following closely on the heels of last month‟s Supreme Court decision on same-sex marriage, the Equal Employment Opportunity Commission (EEOC) has ruled that federal law prohibiting discrimination on the basis of sex includes an implied prohibition against discrimination on the basis of sexual orientation. For employer-sponsored health plans, the ruling means employers who refuse to offer coverage to same-sex spouses, while offering coverage to opposite-sex spouses, now have an enhanced risk of challenges from gay and lesbian employees, and the EEOC.

Click Here to read the full Compliance Services alert

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A Not-So-Transparent Attempt to Cap Drug Prices

via Wall Street Journal

At the dawn of the 20th century, life expectancy in the United States was 47 years. Today, it’s 79. Two decades ago, a diagnosis of HIV/AIDS or hepatitis C was a death sentence. The mortality rate from AIDS has since dropped 85%, to fewer than 7,000 deaths a year from 44,000. Hepatitis C cure rates have reached 90%.

These stunning improvements are the result of medical and scientific advances. If they continue, we could someday solve the riddle of such scourges as Alzheimer’s and cancer.

Why, then, are some people so willing to jeopardize if not halt this progress? It’s a question that those who seek to vilify pharmaceutical companies need to answer…

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Did Senators Commit Health Insurance Fraud?

via Wall Street Journal

A coalition of 10 organizations has filed an ethics complaint calling for an investigation into whether senators and their staff committed fraud when they submitted applications to the health insurance exchange in Washington, D.C.

The Council for Citizens Against Government Waste, the lobbying arm of the nonpartisan watchdog group Citizens Against Government Waste, led the coalition in filing the complaint to the Senate Select Committee on Ethics. The organizations involved are calling for an investigation into whether members of Congress and their staff violated laws by claiming to be a “small business” in order to buy their insurance and qualify for taxpayer-funded subsidies..

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