Centene to Buy Health Net in $6.3 Billion Health-Care Deal

via Bloomberg/Yahoo News

Centene Corp. agreed to buy Health Net Inc. for about $6.3 billion in cash and stock, creating a combination of two smaller U.S. health insurers ahead of an expected round of mergers among the industry’s giants.

Health Net investors will get 0.622 shares of Centene and $28.25 in cash for each share they hold, the companies said in a statement on Thursday. The implied price of $78.57 a share is 21 percent more than Health Net’s closing stock price Wednesday.

The deal gives Centene the biggest market share among private administrators of Medicaid, the federally funded health program for the poor — a bet that the U.S. government will keep playing a larger role in health care. The transaction would give Centene a bigger presence in the California Medicaid program, which is the largest in the U.S. with more than 12 million individuals, and provides an entry into the Medicare market..

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An ObamaCare-Inspired Rebellion

via Wall Street Journal

The long battle over ObamaCare’s subsidies that culminated at the Supreme Court last week has overshadowed a consequential shift in health insurance: toward high-deductible plans that will help put market forces back into medicine.

Thirty-seven million Americans are enrolled in these high-deductible plans, which is more than the 22 million projected to be enrolled on the exchanges by 2025. PricewaterhouseCoopers reported last month that 83% of employers offer a high-deductible plan, up from 67% in 2014. Overall, 31% of employers report that these plans are the most popular they offer, up from 17% in 2012. This trend will only increase once ObamaCare’s “Cadillac tax” on high-value plans (those with premiums greater than $10,200 for individuals, and $27,500 for families) takes effect in 2018.

As millions of Americans move onto high-deductible plans, they will change their behavior—and the incentives of the market. Under these plans, in a typical year consumers will pay most, if not all, of their health-care expenses out of pocket. Since they will be spending their own money, they will compare prices for checkups and procedures. Providers will have to earn their business on the basis of quality, price and service, the way companies do in the other four-fifths of the U.S. economy. Competition has the potential to transform America’s sclerotic, overpriced health-care system into something much more transparent and affordable..

Click Here to read the full article from David Goldhill & Paul Howard

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Audit Your Auditor: DOL Study Calls for Better Scrutiny

via Lockton Retirement Services

In a Department of Labor (DOL) review of annual ERISA audits, two out of every five contained deficiencies significant enough to get them rejected. Anticipate increased enforcement in this area, and rethink your annual plan auditor selection process.

In this article Lockton Retirement Services presents more on:

  • DOL Study Findings
  • Choosing an Auditor
  • Reviewing the Audit
  • Next Steps

Click Here to read the full article

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How to Take Charge of Your Medical Records

via Wall Street Journal

It’s your health. So it’s time you took control of all the information about it. That’s the message that a growing number of patient advocates are trying to spread to American health-care consumers.

For most people, of course, it’s all too easy to simply leave their health records in the hands of doctors and hospitals. But that’s a big mistake, the advocates argue. First, it gives doctors too much power over information that is vital to patients, and it creates opportunities for errors. Perhaps more important, it keeps patients from using the information themselves for their own benefit.

“For consumers to start requesting and using their health information will be a game-changer for the health-care system,” says Christine Bechtel, a consultant for the National Partnership for Women and Families who spearheads the Get My Health Data campaign to get patients to ask doctors for their records. “Once we unlock the data, there’s an enormous amount we can do with it.”

Indeed, taking charge of your own records helps circumvent “data lock”—where one doctor’s records system can’t talk with another’s, or when hospitals make a stink about transferring files to competing providers. By obtaining their records, you can serve as your own data hub and give out information when you are consulting specialists, seeking second opinions or shopping for less expensive care..

Click Here to read the full WSJ article

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Pressure to Cut Employee Benefits Threatens Labor Peace

via Wall Street Journal

Members of the Communications Workers of America protesting outside Verizon’s office in Philadelphia three years ago.

Many big companies are pushing to cut spending on employee benefits—from pensions to health insurance—and could face labor strikes as a result.

In all, major employers have about 400,000 union workers whose contracts are up for negotiation this year. They include the Detroit auto makers, whose workforces have a combined 140,000 members of the United Auto Workers; a group of railroad operators including CSX Corp., with 142,000 union employees; and telecom companies like Verizon Communications Inc., which is in talks with about 40,000 wireline workers.

Most labor talks involve some head-butting over benefits. But what’s different this time, corporate finance chiefs say, are a looming “Cadillac tax” on health-care plans and pension burdens that are dragging down profits.

At New York-based Verizon, executives want to “redesign and reshape” health plans in a bid to cut overall cost, said Fran Shammo, Chief Financial Officer.

Verizon also aims to rein in pension expenses. Its obligations for defined-benefit pensions—the kind that guarantee retirees a set payout—totaled $25.3 billion at the end of 2014, up 10% from 2013.

Click Here to read the full article

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Company Benefits Get More Generous

via Wall Street Journal

Many employers are adding more benefits and perks for workers.

Wage growth is weak, but employers are using benefits packages to improve compensation and keep workers from jumping ship.

As the labor market improves and companies get more aggressive about retaining workers, employers are offering a wider range of benefits and perks, according to new research.

But the generosity has its limits. Firms are grappling with the effects of federal health-care reform, and while they are largely still offering health insurance, they are shifting more of the costs to employees.

Some 35% of employers increased their benefits offerings overall for 2015, compared with 28% increasing benefits last year, according to the survey of more than 450 employers of all sizes by the Society for Human Resource Management, or SHRM. Only 7% of firms decreased their benefits packages from last year, compared with the 9% that cut benefits a year earlier.

Employers offer hundreds of different types of benefits for their workers, ranging from health insurance and gym subsidies to corporate cafeterias..

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Supreme Court Upholds Obama’s Health-Law Subsidies

via Wall Street Journal

WASHINGTON—The Supreme Court on Thursday upheld a pillar of the Affordable Care Act, rescuing for the second time the most ambitious social program in nearly 50 years and ensuring that the law’s ultimate fate will be in the hands of the political process.

The 6-3 ruling, written by Chief Justice John Roberts, upheld a signature achievement of President Barack Obama’s tenure. In buttressing the health law’s legal foundation it raised the odds that it may become as entrenched as Social Security, Medicare and Medicaid.

The case turned on whether the law’s wording allowed for federal subsidies to help lower-income Americans nationwide buy insurance. A contrary ruling could have stripped coverage from millions by making their plans too costly. And it would have thrown the insurance and medical industries into turmoil as the 2016 presidential race heats up.

Insurance and hospital businesses, which were preparing for disruptions to the health-care system if the government lost, breathed a sigh of relief and stocks in the companies rose.

“The Affordable Care Act is here to stay,” Mr. Obama said at the White House, adopting a phrase used by cheering supporters of the law outside the Supreme Court.

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