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Texas Blue Decision Could Signal Twilight of the Exchange PPO

"Lost in the noise over mega-mergers, one of the biggest carriers anywhere, Blue Cross Blue Shield of Texas, announced plans to stop selling its Blue Choice PPO on and off the exchange in 2016.... This isn't an insurer discarding a poorly performing plan design that failed to sway consumers. The Texas Blue plan has more enrollment in Blue Choice than many insurers have total members."

2016 Health Insurance Premiums: The Reverse Bait-and-Switch

"[It's] important to look between the lines and see which plans are not requesting double-digit hikes for 2016.... The classic 'bait-and-switch' entices consumers to the store with the lure of bargains, but when they arrive they find those items sold out, or are pressured to buy up to a more expensive product.... The insurers requesting big rate increases for 2016 may be doing just the opposite: jacking up the costs of existing products so that narrow-network products, typically featuring care integration, look more attractive."

Jury Still Out on Consumer-Driven Health Plans

"[C]onsumers tend to reduce their utilization of healthcare during their first one or two years in a CDHP, particularly through reductions in prescription drug spending.... [It] isn't clear whether the reductions in services tend to be necessary or unnecessary, and long-term utilization trends are not observable in most studies due to short study periods of only one or two years."

Broad Reach of Cadillac Tax Could Have Significant Impact on Employers

"After analyzing its plan, CalPERS found that if the tax were in place today, its Blue Shield Access+ plan offered through Blue Shield of California in the San Francisco area and the Anthem Traditional HMO plan in Sacramento would both trigger the tax because they cost more than the limit. The purchasing coalition estimated it would pay $3.9 million in excise taxes."

Formulary Exclusions May Be Yesterday's News

"[P]harmacy benefit managers and health plans appear to be turning their attention to contracts that put drug companies on the hook for reimbursing payers if those high-priced drugs do not live up to their promised results. In fact, one senior official of a national PBM ... [said] that the PBM would rather not exclude a drug from coverage ever again, preferring instead to pursue outcomes-based or other contracting terms that would bring payers some form of predictability in their drug costs."

Value-Based Benefit Design and Select Rx Utilization Controls Waned in 2014

"10 years of PBMI data show that, yes, there are higher tiers and copayments for specialty drugs, but cost sharing for these stratospherically expensive drugs has actually dropped, probably because their introduction and subsequent cost inflation has occurred so fast that insurance plans can't keep up with it. Even more surprising, value-based pharmacy benefit design was actually being used less in 2014 than in previous years. More than half (53 percent) of the respondents reported using none of the evidence-based tactics listed in the survey, compared with 43 percent in 2011.... These rather surprising trends away from value-based benefit design probably don't mean that employers are slacking off on encouraging wellness to cut insurance costs. Instead, employers may be finding more effective ways of influencing employees' health choices."

Lower Subsidies Could Lead to Exchange Sticker Shock for Enrollees

"The news that some exchange carriers will offer lower premiums in 2015 was a surprise in many markets. But the biggest surprise could await exchange customers who stick with their existing exchange plan without shopping around. An unintended consequence of lower premiums is lower subsidies, which raises the percentage of premium that enrollees pay for their plan."

California Health Plans on Notice: Drug Lists Will Be Standardized

"[A] new law in California ... will eventually require all plans in California to use a standard formulary.... The new law ... requires the two insurance state regulators ... to devise a standard formulary by Jan. 1, 2017. Within six months after the template is developed, all insurance plans in California, not just those on the exchange, will have to conform to that template and post regular formulary updates."

Eastward Ho! More Pioneer ACOs Turn Their Wagons Around

"Providers are quitting for three main reasons: they're losing money, they're unhappy with [CMS's Medicare Pioneer ACO program] design, and they have a lot more ACO control playing locally than federally.... Providers also cite benchmarks and formulas that don't reflect the unique dynamics of their markets or their patient case mix."

The Maker of Jumbo Jets Tries a Makeover of ACOs

"Within the half year, a large employer and three hospital systems in the Seattle area are launching an unusual accountable care experiment that removes the insurance company middleman. The arrangement is also notable because it will use practically every tactic under way in managed care: health savings accounts, value-based benefits, narrow networks and medical homes. The experiment involving large aerospace manufacturer Boeing Corp. will be closely watched not only for the ACO portion, but also for its everything-but-the-kitchen sink approach to making employees healthier while slowing down the costs of doing so."