Blog

Personal Finance

Credit Card Perks that Honor Active-Duty Military

Originally published on CardRatings.

As a way to say “thank you,” both the country and credit card companies offer special benefits for active-duty military members and, in some cases, their spouses.

No matter your credit card, active-duty military members and their spouses are eligible for benefits related to the Servicemembers Civil Rights Act (SCRA). The SCRA provides financial help to active-duty military personnel and their spouses (more on these benefits below); however, many credit card issuers go above and beyond the SCRA and offer additional benefits, such as waiving annual fees or even lowering interest rates beyond what the law requires.

Let’s take a look at the SCRA, five additional military credit card benefits, how to request those benefits and some top cards for active military personnel.

What is the SRCA and how does it help military members?

The SCRA protects the finances of military members (and their families) while they are on active duty. Congress passed the SCRA, which expanded the Soldier’s and Sailors’ Civil Relief Act of 1940, in 2003.

The SCRA caps active military members’ interest rate at 6 percent for financial obligations incurred before military service. The creditor must forgive interest greater than 6 percent. It can’t defer it to later and it must also forgive the interest retroactively.

SCRA deals with rental agreements, security deposits, mortgage interest rates, health insurance, income tax payments, mortgage foreclosures and, yes, credit cards.

Military members have until 180 days after their end of service to notify creditors and provide the necessary documents to benefit from the 6 percent APR cap.

To be eligible, you must meet at least one of the following criteria:

  • Be a member of the U.S. Armed Forces on active duty or a reserve component called to active duty,
  • Be National Guard personnel under a call or order to active duty for more than 30 days,
  • Be a Public Health Service and National Oceanic and Atmospheric Administration commissioned officer,
  • Be a U.S. citizen servicing with another nation, which is allied with the U.S. “in the prosecution of a war or military action,” or
  • Be the spouse of an active duty service member.

The SCRA helps those in the active military with a number of financial situations, but let’s look at how credit cards go beyond that.

4 additional credit card perks for military members

From waiving fees to cutting the APR, credit card companies thank active service members in multiple ways. Here are a few of the ways credit card companies say “thank you” to military members.

Annual fee waivers

This is largely an under-the-radar perk but can be a huge money saver, especially for cards with hefty annual fees like the CardName, which offers lucrative luxury perks but comes with a $550 annual fee (read more about this card below). If you’re active-duty military, however, you don’t have to worry about the $550 fee.

American Express isn’t the only issuer to waive annual fees for active duty military. ChaseCapital One and Citi all waive annual fees for active military members (and, yes, you must be active duty to qualify for the fee waivers).

Lower APR

The SCRA requires creditors cap their APR at 6 percent for active service members; however, some card issuers drop it even further.

Citi completely removes the APR during active duty time. USAA and Capital One lower the APR to 4 percent. USAA even goes beyond that and extends the 4 percent APR until a year after active duty ends.

No late fees

American ExpressCapital OneUSAA and Chase will waive late fees for active military members.

A word of caution — late payment information will still go to credit bureaus, which can affect your credit score. So, it’s not a good idea to miss a payment even if your card may waive the fee.

Wipe out all fees

Some credit card companies remove all fees while you’re on active duty. For instance, Capital One and USAA cut foreign transaction, balance transfer, cash advance and all other card-related fees.

How to request SCRA, additional military-based benefits

Now that you know about all of these benefits let’s talk about how you notify credit cards about being an active military member.

You must provide the creditor with a copy of your military orders. Contact your credit card company either via phone or online. Don’t be deterred if the customer service representative isn’t familiar with these benefits. Just request to speak to a supervisor. You should also expect to answer a series of questions about your military service.

Once your creditor receives your information, it will review your SCRA eligibility to confirm you are an active duty military member or the spouse of an active service member. The creditor will examine the provided documents and check the Department of Defense Manpower Data Center.

Each credit card has a similar process to verify SCRA benefits and to get other active military-related card benefits.

Top cards for military members

All credit cards will give you the benefits that are part of the SCRA, and some cards will provide added benefits. If you’re ready to start taking advantage of these benefits available to you, keep reading for some of the top cards from issuers offering special military benefits.

Before you apply, however, remember that being active duty military doesn’t automatically mean you’ll be approved for a credit card; your credit history and score will still be factors in whether you’re approved.

To see the list of best cards, head over to CardRatings.

Personal Finance

5 Credit Card Trends for 2018

Originally published on CardRatings.

Credit cards usage is nearing pre-Great Recession levels as Americans feel more confident about their jobs and economy.

The Consumer Financial Protection Bureau recently reported that the average credit line, number of accounts and outstanding card debt are all on the upswing. There isn’t quite as much credit card debt (yet!) compared to before the recession, but it’s increased 9 percent over the past two years.

The credit card upswing has led credit card companies to think up new ways to woo customers. They’ve diversified rewards programs, expanded technology like mobile payments and implemented better account security.

The already active credit card market will get another jolt when the tax cut goes into effect in 2018, which could mean more disposable income over the next year.

Economists and consumers are optimistic about 2018, but what can you expect for credit cards? Here are five things to watch in 2018:

Less signing when you make purchases

You’ve probably noticed that you don’t have to sign for as many purchases you did just a couple of years ago. Credit card companies and businesses have lowered the hassle of signing after you swipe or insert your card. These policies are about making things easier at checkout.

And the “no-signing” trend continues to gain steam. American Express, Discover and Mastercard have all announced that they are doing away with signatures for domestic purchases (and, in some cases, for purchases abroad as well).

You’re probably wondering: How will credit card companies prevent fraud if you don’t have to sign? Well, first off, your signature at check out is likely a squiggly line anyway, so it’s not exactly helping prevent fraud at present.

Plus, more and more shopping each day is done online where you don’t sign for your purchases. And lastly, credit card companies have improved fraud prevention through better technology (see below for more on that) and customer alerts, so they believe the signature isn’t needed anymore.

Not signing for your credit card purchases may seem off-putting at first, but once you get used to it in 2018, you’ll likely not pine for the days of signing for those purchases.

More chip technology

Anyone who has used a credit card outside of the U.S. knows that shopping with a credit card is quite different outside of the American borders.

EMV technology, which stands for Europay, MasterCard and Visa, is standard in other parts of the world, but Americans continue to occasionally swipe for purchases even if you have noticed a significant increase in the “insert your card” EMV technology closer to home in the past few years. The EMV technology can feature chip and signature or chip and PIN, which offers it a little bit of added protection.

EMV stores credit card data on a computer chip embedded on the card rather than on the magnetic stripe you’re used to. Card readers that utilize chip technology don’t need to be connected to a phone or the internet to approve the charge. That’s different from the classic magnetic stripe card that continually communicates with the credit card company.

Also, hackers can tap into magnetic stripe card by attaching a reader over the existing card reader. That means a cardholder who swipes for a full tank of gas may not realize that a hacker just got their credit card information. Overall, American consumers with magnetic stripe cards are much more at risk of being the victim of credit card fraud. In fact, a 2013 Nilson Report study found American consumers accounted for one-quarter of credit card purchases, but half of the world’s credit card fraud.

Chip technology is designed to change that stat.

U.S. credit card companies are moving more into EMV technology, though many are still in the chip and signature world with future plans to move into the chip and PIN world. Cayan reported that 73 percent of credit card purchases on Black Friday in 2017 were with chip technology. That’s an increase from 55 percent in 2016. Credit card companies have issued 462 million chip cards to cardholders, and more than half of U.S. storefronts now accept cards with the technology.

The added fraud protection seems to be working. Visa reported that counterfeit fraud at U.S. chip-enabled merchants decreased 66 percent in June 2017 compared to two years ago.

If you don’t have a card with chip technology yet, your credit card company could very well be sending you one in 2018. If you already have a chip card, be aware that your company could be moving in the chip and PIN direction very soon.

More metal cards

Credit cards are not just a tool to make purchases. In many ways, they’ve become a status symbol.

Credit card companies now offer special cards that set you apart from other consumers. Sure, plastic rewards cards are great, but metal cards can impress.

Beyond the look and feel, a metal card’s benefits vary by card – just like plastic cards. Some metal cards specialize in travel rewards, while another might give cash back. Some have hefty annual fees, while others are more affordable.

Plastic credit cards remain more common than metal cards, but that’s the point. Metal cards are meant to stand out.

Offering a metal card gives credit card companies another way to tempt top customers and high spenders. In many cases, the metal cards offer similar rewards and perks as regular plastic cards, but with the added benefit of a special card that will get a second look by store employees and friends alike. Furthermore, those metal cards just might hold up better in your wallet.

If you want a side of prestige with your credit card, you’ll likely have more opportunities to get a metal card in 2018 if you’re a top customer.

More rewards for balance transfers

There was a time not too long ago when credit card companies were focused on fairly bare-bones balance transfer credit cards. The thought was that consumers interested in these cards solely cared about getting a temporary lower APR and maybe even not paying a balance transfer fee. It was great for consumers, but it meant that many of them just put the card in a drawer after taking advantage of that balance transfer offer – not exactly what credit card issuers want you to do with the card they send you.

Now, more companies are sweetening their balance transfer cards by adding rewards programs and perks. It’s a win-win for consumers and credit card issuers. Suddenly that awesome rewards credit card that you want to use every day might also come with a sweet balance transfer or 0 percent interest deal as well.

With Americans feeling confident about the economy and spending more as a result, many consumers will likely look for ways to consolidate debt and pay a lower interest rate. Wouldn’t it be nice to have a balance transfer card that allows you to do all that, but that you want to keep in regular rotation because of the rewards it offers?

A better economy means more available money for consumers; therefore, look for credit card companies to offer more cards and added perks as they try to lure more consumers to their brand.

More emphasis on mobile wallet

Despite credit card and technology company efforts, mobile payments remain a small percentage of credit card-related purchases. Companies will continue to look for ways to increase mobile payments in 2018. In fact, Chase Freedom® cardholders who activate the bonus categories for the first quarter of 2018 will earn 5 percent back on up to $1,500 spent in mobile payments with Chase Pay®, Apple Pay®, Android Pay™ and Samsung Pay (and on gas station and phone/cable/internet purchases).

More users have mobile wallet technology these days. For instance, Apple Pay® doubled its users in 2017 with one estimate saying the service could have reached 86 million customers by the end of the year. Starbucks also saw a 10 percent increase on its Mobile Order & Pay service in 2017. In fact, 30 percent of Starbucks payments in June were done via its mobile app.

Despite those numbers, mobile payments still are just a small portion of credit card payments.

However, as cardholders look to offer easier ways to use their credit cards and smartphones continue to play a larger part of our lives, look for credit card and mobile phone companies will continue to push mobile payment offerings in 2018.

Healthcare, Insurance

5 Payer Trends to Watch in 2018

Originally published on Healthcare Dive.

The past year has been an eventful one for payers, from the tumultuous Affordable Care Act (ACA) exchange markets to potential mega-mergers. Insurers continue, however, to keep their efforts focused on lowering healthcare costs where possible, with the intention that quality of care is not sacrificed.

Those payer efforts are working. Healthcare spending growth dropped to the lowest level in nearly two years, and hospital spending growth lags behind all other healthcare sectors. Hospital spending increased by only 0.8% year-over-year in June, which was the slowest growth rate since January 1989.

Payers have ratcheted down hospital payments by creating policies with an eye toward providing care at less-costly locations, designing health plans that put more healthcare utilization costs on members and by replacing fee-for-service payments with value-based contracts. Providers have also teamed up with insurers in partnerships that look to offer better outcomes.

Looking ahead to next year, you can expect payers to implement more cost-saving measures and push for value-based contracting. Here’s a look at five payer trends to watch for in 2018, and some tips for preparing to deal with them.

1. Payers will continue to ramp up ways to cut costs

Insurance companies have created policies, designed plans and narrowed provider networks to bring down healthcare costs. They’ve shown success. Expect payers to accelerate those programs and policies and search for more cost-saving levers in 2018.

The most public example of health insurers cutting costs over the past year was Anthem’s policies to not pay for unnecessary emergency department visits or imaging services at hospitals. Anthem’s policies looked to nudge patients to less costly outpatient facilities, including urgent care centers and freestanding imaging centers.

Michael Abrams, co-founder and managing partner at Numerof & Associates, told Healthcare Dive that Anthem’s decision to not reimburse hospital outpatient MRI and CT scans without precertification is “an important message to the provider community.” Anthem’s policy is in response to “ballooning growth in outpatient imaging — both in volume and in unit cost.”

For hospitals searching for ways to improve their bottom lines, many health systems viewed imaging as a way to make up for lost reimbursements and less utilization elsewhere. However, Abrams said the payer’s message was that medical necessity is the stronger consideration and that unit pricing needs to reflect broader market pricing.

“Many provider institutions had turned this under-regulated service line into a profit center,” Abrams said. “Anthem’s action made it clear that such actions would not be acceptable.”

Aneesh Krishna, partner in McKinsey & Company’s Silicon Valley office, told Healthcare Dive payers will likely roll out similar policies for imaging, lab, diagnostic testing and low-risk surgeries. “We see a trend toward rationalizing the levels of payments across various sites of service,” he said. “Imaging-related initiatives are the first steps in that direction.”

In addition to pushing for more services outside of hospitals, Fred Bentley, vice president at Avalere, told Healthcare Dive that he expects payers to focus on readmissions. Providers will need to manage patients post-discharge and keep them healthy in their homes rather than in hospitals.

Though not as high profile as Anthem’s policies, payers have been narrowing provider networks to bring down costs. This has been especially true in ACA exchange plans and Medicare Advantage (MA). In fact, a recent Kaiser Family Foundation study found that 35% of MA enrollees were in narrow-network plans in 2015, while only 22% were in broad-network plans.

Bentley said narrow provider networks haven’t had a huge impact yet. However, the “significant value” associated with narrow and tiered provider networks will ultimately cause more payers to expand narrow provider networks in the employer-based market.

2. Greater emphasis on value-based care and contracting

Payers and the CMS have pushed for more value-based care and payments, but it’s been slow going.

“Payers see potential to contain costs and improve quality in such contracts. However, the pace of adoption is tempered by provider resistance to taking on risk and by payer reluctance to push providers to do so before they are operationally prepared to be successful,” Abrams said, referencing findings in Numerof & Associates’ 2017 State of Population Health Survey.

Krishna believes payers may move more into bundled payments, bonus payments and capitation as it pushes providers to care for the whole patient rather than receiving payments for individual services.

Krishna said the shift toward cost-effective sites of service will require payers to align provider incentives to get the best outcomes. It also gives providers greater flexibility to choose the right care for their patients. This will additionally mean payers will need to share the right data with providers. “Increasing levels of data availability and easier integration between payer and provider systems will make the transition easier and scalable,” Krishna said.

Steve Wiggins, founder and chairman of Remedy Partners, told Healthcare Dive payers will continue to leverage payment models that encourage patients to find care in the most cost-effective locations and use those service efficiently. This will lead to more bundled payments that trigger at diagnosis rather than only at inpatient admission, which is already happening in Medicare, he said.

“Orthopedics, all post-acute services, oncology care, most elective surgeries, all episodes that patients control and a wide range of chronic conditions lend themselves to bundled payments that start at diagnosis,” Wiggins said.

3. More outpatient and virtual care utilization

Payers have been pushing more patients to outpatient facilities as a way to cut costs.

“Care delivery is moving out of the acute care setting and into the community. Such a trend is responsive to consumer demands for fast, convenient access, and it offers the potential for higher volume and lower costs in specialized clinic settings. An increasing portion of hospital system revenues comes from outpatient services, and that ratio will continue to define the progress of systems in a market-driven, value-based healthcare environment,” Abrams said.

Wiggins said innovations will also play a larger role in keeping down costs. He said shifting away from traditional delivery models and fee for service to bundled payment models will lead to more remote monitoring and telemedicine.

“Bundled payments hold great potential to become the driver of innovations that leverage the explosion of wearables, remote monitoring and greater patient engagement,” Wiggins said.

A recent KLAS Research and the College of Healthcare Information Management Executives survey found that reimbursement remains the main barrier to telehealth expansion, but Krishna said virtual care will play a bigger role in the coming year, including for initial consultations and follow-up visits that don’t require an onsite doctor visit.

“Overall, these trends will likely shift significant patient volume from higher-intensity settings to lower-intensity settings while maintaining — or in some cases even improving — quality of care or patient experience,” Krishna said.

Abrams said the cost consequences of virtual care are not fully known, but consumers want that access to providers. More virtual care could include nurses offering guidance on day-to-day health issues and physicians monitoring and visiting virtually with chronically ill patients at home.

“As larger and better capitalized healthcare systems move toward risk-based contracting, we expect to see growth in the use of such services,” Abrams said.

4. Consumers want cost, quality transparency

Consumers are demanding more healthcare cost data on procedures. A recent HealthFirst Financial Patient Survey found that 77% of healthcare consumers say it’s important or very important to know costs before treatment.

Higher out-of-pocket costs and high-deductible health plans are the biggest reasons for this greater interest in transparency. A recent Kaiser Family Foundation study found that out-of-pocket spending is outpacing wage growth.

Deductibles went from accounting for less than 25% of cost-sharing payments in 2005 to almost half in 2015. The average payments toward deductibles rose 229% from $117 to $386, and the average payments toward coinsurance increased 89% from $134 to $253 in that period. Overall, patient-cost sharing increased by 66% from an average of $469 in 2005 to $778 in 2015.

With members taking on more healthcare utilization costs, payers and employers view cost and quality data as a key to reducing healthcare costs. However, the information is not always easy to find for consumers.

Bentley said consumers are frustrated and confused by their bills. Health systems understand they need to provide pricing and outcomes information and payers like Anthem have created comparison shopping tools for consumers, he said.

That is just the start of a greater move toward consumerism as patients take on more out-of-pocket costs.

“In the new market-based healthcare landscape that is evolving, buyers will look for transparency, accountability for cost and quality across the continuum and consumer choice based on real competition,” Abrams said.

5. More payer/provider partnerships

Payers have pushed more cost controls that are affecting provider bottom lines, but there have been some moments this year when payers and providers have seen eye-to-eye. Providers and payers have increasingly worked collaboratively.

Payer-provider partnerships vary in type, size, location and model. There are 50/50 joint ventures with co-branding, and less intensive partnerships like pay for performance, accountable care organizations, patient-centered medical homes and bundled payments. Oliver Wyman found the partnerships can be broken down depending on providers’ appetite for risk.

They involve national payers like Aetna, Cigna and various Blues and new players in the payer space like Oscar Health and Bright Health.

Bentley said healthcare is becoming a “messy hybrid world” in which payers get more involved in the provider side and vice-versa. Increasingly, providers and payers are more concerned about managing patients’ health rather than viewing them as volume. Bentley said to expect more experiments and partnerships as the lines in healthcare continue to get blurred.

How hospitals and providers should prepare for these trends

Now, the important question for hospitals and providers is: What should we do to get ready?

Here are five suggestions from experts:

  • Strengthen your acute care core. Krishna suggested providers do this by addressing the acute care cost structure, improving care coordination/continuity and expanding efforts to deliver lower costs of care in post-acute care.
  • Think about a patient’s total episode of care, including what happens to patients long after discharge. Wiggins said providers should think like a product manager in industrial America who is responsible for the entire value chain. Stop organizing hospitals into specialty silos and organize around patient conditions, episodes and needs. Providers should also track behaviors and identify failures and inefficiencies in patient care. “With those insights, dive into value-based payment models, especially bundled payments that are most closely aligned with the role hospitals play,” said Wiggins.
  • Consider your approach to value-based care and long-term transition in the market. Krishna said systems need to find the right balance to move into value-based care. Moving too quickly from fee-for-service will reduce near-term earnings, but moving too slowly could leave you behind.
  • Bolster revenue cycle management capabilities to manage both patient responsibility and payer denials, said Krishna. The revenue cycle is a key aspect for hospitals, and that’s morphing as patients take on more responsibility. Tracking down patient payments is quite different from working with payers, but hospitals and health systems will need to make sure they are prepared to handle both.
  • Focus on efficiencies on operating costs. Hospitals and health systems have turned to M&A as a way to improve profit margins. Some systems like Community Health Systems, which is divesting at least 30 hospitals this year, are shedding unprofitable facilities. Health systems will need to continue that process to sell off facilities that don’t make sense financially or don’t fit a health system. “I do think it is time for them to review their portfolio of assets on inpatient and outpatient to figure out is this something we need to own,” Bentley said.
Healthcare

Why Payers are Flocking to the Medicare Advantage Market

Originally published on Healthcare Dive.

Medicare Advantage (MA) and the Affordable Care Act (ACA) exchanges are both federal programs, but they couldn’t be more different in payers’ eyes. Insurance companies are entering or expanding their footprints in the MA market, while simultaneously pulling back or out of the ACA exchanges. They’ve found success in MA. Not so much in the ACA exchanges.

Payers see MA as a stable market. That’s evident in the fact that MA premiums are expected to decrease by 6% next year. Insurance companies like stability. Insurers increase premiums by double digits when there isn’t stability, which is the case with the ACA exchanges.

A large part of the ACA exchanges’ problems is linked to actions and inaction in Washington, D.C. President Donald Trump’s administration stopped paying cost-sharing reduction payments to insurers, cut the exchanges’ open enrollment in half, reduced the exchanges’ advertising budget by 90%, offered proposed rules and executive orders that hurt the ACA and threatened not to enforce the individual mandate that requires almost all Americans to have health insurance.

Congress, meanwhile, has tried and failed to repeal the ACA this year. All of this created an unstable exchanges market, which resulted in payers leaving the exchanges or jacking up premiums by 20% or more for 2018.

Meanwhile, the MA market is a picture of stability and payer success.

  • There is a steady stream of new people eligible for Medicare daily, and many choose MA.
  • People usually don’t switch back from MA plans after leaving traditional Medicare.
  • Payers can easily convert members from traditional Medicare to MA via marketing campaigns.
  • The MA demographics are usually people who once had an employer-based plan, so they know insurance and how healthcare works. That also means they usually don’t have pent-up healthcare needs.
  • The CMS pays MA plans upfront for covering people with high healthcare costs and payers have enjoyed stable MA payments from the CMS.

So, MA members are easier to get and keep, they usually have fewer health needs and payers like the MA payment structure better than the exchanges, which get compensated at the end of the year. All of that equals a stable market for payers.

One-third of Medicare beneficiaries are enrolled in an MA plan this year compared to 25% just six years ago. Enrollment grew by 8% between 2016 and 2017 and the CMS recently announced that MA membership will grow by 9% to 20.4 million members in 2018.

Gretchen Jacobson, associate director with the Kaiser Family Foundation’s (KFF) Program on Medicare Policy, told Healthcare Dive that more than half of those in Medicare will have MA plans in many counties next year.

That growth isn’t expected to slow — especially with Republicans controlling both houses of Congress and the White House, according to Steve Wiggins, founder and chairman of Remedy Partners.

“With Republican control of the federal government, it is conceivable that Medicare Advantage will become a centerpiece of CMS’ strategy to control spending growth,” Wiggins told Healthcare Dive.

What more MA members and payers means for hospitals and providers

With more MA members expected next year, the continual shift to MA will have mixed benefits for providers. Jacobson said it’s not entirely clear how more MA members will affect hospitals and providers. “One of our studies recently showed that the provider networks for Medicare Advantage plans greatly varies and these networks will become even more important as enrollment in Medicare Advantage plans grows,” she said.

Fred Bentley, vice president at Avalere Health, told Healthcare Dive that MA’s growth will present a whole new set of challenges for hospitals and health systems.

Bentley listed two issues:

  • Narrow networks
  • Tighter utilization management compared to Medicare’s fee-for-service model

recent KFF report found that 35% of MA enrollees were in narrow-network plans in 2015. Payers have increasingly turned to narrow networks to control costs and improve quality of care. To take part in the narrower networks, physicians usually have to agree to payer demands concerning cost and quality.

“Differences across plans, including provider networks, pose challenges for Medicare beneficiaries in choosing among plans and in seeking care, and raise questions for policymakers about the potential for wide variations in the healthcare experience of Medicare Advantage enrollees across the country,” KFF said.

Another issue for hospitals and providers is that more payers involved in capitated plans like MA will result in more pressure on providers and hospitals to focus on the cost of care, Michael Abrams, partner at Numerof & Associates, told Healthcare Dive.

There’s also the issue of having too few MA payers in some regions. Aneesh Krishna, partner in McKinsey & Company’s Silicon Valley office, told Healthcare Dive the concentration of MA plans in certain markets is a worry for providers. “This concern would be magnified in markets where there is a similarly high concentration in commercial segments from the same payers, and where overall MA penetration is high,” he said.

There’s also a potential payment issue. MA generally reimburses at a slightly higher level than traditional Medicare, but utilization is managed more tightly. Krishna said providers willing and capable of sharing medical cost savings are “likely to see more benefit from the shift to Medicare Advantage plans.” However, MA networks are often narrow, which means providers will need to weigh the relative price/volume trade-offs of accepting MA.

More MA growth in the coming years

MA will have more payers and members than ever next year and the two largest payers, UnitedHealth and Humana, are expected to increase their footprint. Despite new payers showing interest in the market, Jacobson expects the market break down will look similar in 2018. She said small payers entering the market will offset the plans exiting MA next year.

The Congressional Budget Office (CBO) and HHS both project MA enrollment will continue to grow over the next decade. The CBO estimated that about 41% of Medicare beneficiaries will have an MA plan in 2027. UnitedHealth even predicted half of Medicare beneficiaries will eventually have an MA plan.

MA’s popularity with payers is easy to understand — 10,000 people turn 65 every day. The CBO expects 80 million Americans will be eligible for Medicare by 2035.

There’s also an opportunity in the MA market to sign up members quickly. Rachel Sokol, practice manager of research at Advisory Board, told Healthcare Dive that utilizing a strong marketing engine allows payers to grow MA membership. This is quite different from the employer-based market, which relies on payers working with companies.

Potential MA barriers

The MA market is largely positive for payers, but it does face challenges, including:

  • A small number of payers dominate the market
  • The CMS expects improved efficiency and savings
  • There is increased federal oversight, especially concerning possible overpayments to MA insurers

CMS is all in supporting MA plans and its market space. The agency last week proposed a rule with an aim toward improving quality and affordability in contract year 2019. According to the agency, the number of plans available to individuals will increase from about 2,700 to more than 3,100.

The agency is proposing to expand the definition of quality improvement activity to include fraud reduction activities, changing the medical loss ratio (MLR) requirements for Medicare Advantage plans. This change should excite payers because they can add the administrative service to the MLR ratio they are required to spend on healthcare, which is at least 85%. CMS states it believes the service will help combat fraud.

For now, the MA market is consolidated around only a handful of payers. UnitedHealth and Humana have more than 40% of the market. UnitedHealth has one-quarter on its own. KFF said UnitedHealth, Humana and Blue Cross Blue Shield affiliates make up 57% of MA enrollment and the top eight MA payers constitute three-quarters of the market.

Also, CMS is imposing improved efficiency in the traditional Medicare program. This could ultimately affect MA. Accountable care organizations (ACO) and bundled payments will “put downward pressure on the benchmarks used to set payment rates for Medicare Advantage plans,” Wiggins said.

This pressure will result in MA payers needing to either cut costs or trim benefits. “The former is difficult, except through narrow networks, and the latter will diminish the attractiveness of Medicare Advantage plans,” he said.

Then there’s the 800-pound gorilla in the market — potential overpayments. The Department of Justice (DOJ) has joined whistleblower lawsuits against UnitedHealth Group concerning MA overpayments. The lawsuits allege that UnitedHealth changed diagnosis codes to make patients seem sicker, which resulted in higher reimbursements to the insurer. A federal judge threw out one of the lawsuits in October.

The DOJ is investigating other MA payers for the same reason, and Congress is also interested. Sen. Charles Grassley (R-Iowa), chairman of the Senate Judiciary Committee, sent a letter to CMS Administrator Seema Verma in April questioning what CMS is doing to “implement safeguards to reduce score fraud, waste and abuse.” Grassley said there was about $70 billion in improper Medicare Advantage payments between 2008 and 2013 because of “risk score gaming.”

It’s understandable that investigators and Congress have grown interested in MA payers. The federal government paid $160 billion to MA payers in 2014. The CMS estimated about 9.5% of those payments were improper.

The combination of billions being paid to insurers, the potential for fraud and growing membership numbers make MA ripe for oversight. The stability of the market, particularly compared to other options for payers, however, will mean growth continues.

Healthcare

How Will Instability in the ACA Exchanges Affect Healthcare in 2018?

Originally published on Healthcare Dive. 

Threats, actions and inactions from Washington, D.C., have left the Affordable Care Act (ACA) exchanges teetering and insurance companies fleeing the individual market for 2018. This state of affairs can be harmful for payers, who are sometimes unable to share population risk with other insurers. It’s also an issue for providers, who will see fewer people with coverage and will lose leverage in payer negotiations on reimbursement and provider networks.

The effects of an uncertain individual market are already showing in premium rate hikes, but 2019 will likely be even more troublesome — unless there are policy changes.

Congress has failed to pass major healthcare legislation this year, and critics charge the executive branch has been undermining the exchanges, including:

  • President Donald Trump has ended cost-sharing reduction (CSR) payments to insurers. CSR payments help keep down out-of-pocket costs for lower-income Americans.
  • The Trump administration may not enforce the individual mandate. This would lead to fewer members and cause younger, healthier people to leave the exchanges. The result would be an imbalanced risk pool with not enough healthy people to offset the sickest members.
  • The administration cut the open enrollment period for ACA plans in half this year, slashed its advertising budget by 90% and moved healthcare.gov offline on Sundays, which is when many working people may try to sign up for an ACA plan. These moves could reduce ACA plan membership.

These actions and threats have resulted in some payers exiting the ACA exchanges or proposing more than 20% premium increases.

“Insurance markets work best when there’s stability and when everyone has a pretty good sense of how the market is going to operate. Sadly, we’re not there right now,” Ken Wood, senior vice president of health plan development at Evolent Health, told Healthcare Dive.

During her time at HHS, Chiquita Brooks-LaSure, a managing director at Manatt Health, saw firsthand how much insurers worry about uncertainty. As director of policy coverage at HHS during President Barack Obama’s administration, Brooks-LaSure was there at the start of the ACA exchanges. She recalled how insurers’ No. 1 concern was uncertainty.

Brooks-LaSure told Healthcare Dive insurers care less about specific rules and regulations than not knowing what to expect. They can price bad risk and design products when they know the market.

“Uncertainty has caused a lot of insurers to say (the exchanges are) too volatile,” said Brooks-LaSure.

Only one ACA payer in nearly half of counties in 2018

The ACA market uncertainty almost resulted in counties without any options in the exchanges. Major payers like UnitedHealth Group, Aetna, Humana and Anthem pulled back or completely out of the exchanges for 2018, which left state insurance commissioners scrambling to fill the gaps.

Nevada, Ohio, Missouri, Indiana, Virginia, Tennessee, Washington and Wisconsin all feared that they would have counties with no ACA payers in 2018. Ultimately, state officials and payers were able to get all counties covered. However, nearly half of counties will have only one ACA plan option in 2018, which is far from ideal for payers, providers and members.

Entire states like Kentucky, Oklahoma, Iowa, Nebraska, South Carolina, Mississippi and Wyoming will have only one payer for the entire state. Other states like North Carolina, Georgia, Tennessee, Alabama and Arizona will have most counties with only one payer.

Counties with only one payer option are mostly rural areas. Higher population areas mostly have multiple payers competing for business. For instance, Texas has four or more ACA payers in metro areas like Dallas-Fort Worth and Houston, while the more rural areas have only one or two ACA payers.

Having only one payer doesn’t provide members any choice, leads to higher health costs and gives insurers more leverage over physicians and hospitals. Chris Sloan, senior manager at Avalere, told Healthcare Dive that payers can pretty much say “we want to pay X or you’re not in the network.”

Brooks-LaSure said those insurers also can set prices, provider networks and cost-sharing structures without any competition.

“States don’t have a lot of leverage if there’s only one insurer,” she said. “(The payer) has no incentive to try to compete better because they’re not competing against anyone.”

What does having only one ACA payer mean for hospitals and providers?

Payer contracts are likely already signed for 2018, so reimbursements won’t be affected in the counties with only one ACA payer next year. That impact may come in 2019.

This lack of competition will mean higher premiums. Sloan said Avalere’s research found that premiums are higher with lower competition. Places with one insurer had about 10% lower premiums than those with two and 15% less than places with three or more carriers.

There are three major concerns for hospitals in areas with only one ACA payer:

  • Out-of-pocket costs could increase. Higher out-of-pocket costs, especially in high-deductible health plans, may result in more bad debt for providers.
  • Narrower networks may nudge members toward HMOs, which will affect doctors not in those networks.
  • Decreased ACA plan enrollment will result in people using the emergency room for non-urgent healthcare. If this happens, hospitals will see more bad debt and uncompensated care because of fewer insured Americans.

To prepare for 2018, Sloan suggested hospitals in lone ACA insurer areas review their patient population. Find out the percentage of patients in ACA plans. Think about what would happen if say 10% of those patients drop out of the plans in 2018. Then, determine whether you need to set aside more money for charity care next year.

Wood said providers can also help patients who lose their insurer and need to choose a new plan. “I think the most important thing that hospitals and physicians can do is get the word out for people to get coverage,” Wood said.

Sloan suggested another way to help is for providers to advertise open enrollment in their waiting rooms. Having those patients insured is not only important for their health, but providers’ bottom lines.

What will this mean for payers?

Being the only game in town isn’t exactly great news for insurers either. Sure, they get all the business, but that’s not a positive. There’s a reason the other payers pulled out of the counties.

“There is clearly a reason why plans didn’t want to stay in those counties. There are clearly risk issues,” Sloan said.

Without any competition, the insurance companies don’t have another payer in which to share the risk. This means the remaining insurer will need to find ways to balance the risk and figure out how to reach profitability.

Given the increasing costs and reduced outreach and open enrollment period, insurers will likely see fewer members enrolled in ACA plans next year. Sicker members will remain in the plans. This will lead to higher premiums and out-of-pocket costs, which in turn may make more people leave the ACA plans.

Payers in rural areas especially will need to work on getting enough healthier members to offset those who need the most care, Wood said. Those insurers may also need more innovation, such as using telehealth, to help keep down costs.

“If you’re in a rural area and you’re the only health plan, you’re just hoping for an adequate mix of enrollment,” Wood said.

Sloan will closely watch how the only insurers in counties perform in 2018. He’s especially interested to see if they can manage risk and price plans correctly for the patient population.

“It’s going to be interesting how these health plans do,” Sloan said.

How will payers perform in 2018?

Sloan said one reason some of the larger payers pulled out the ACA exchanges is they’re publicly traded, and need to explain to shareholders why they’re losing money in the exchanges. The Blues, on the other hand, are nonprofit and have a mission to serve the individual market. Sloan said Blues plans cover about 90% of counties with only one payer in 2017.

“The Blues are holding up the market,” he said.

The Blues were in the individual market well before the ACA. So, while insurers with limited individual experience have pulled out of the ACA exchanges, the Blues continue to largely stay in the exchanges except for Anthem, a Blues plan that pulled out of nine of 13 exchanges for 2018.

“The Blues have been in this market and, in general, have been interested in making it work,” Brooks-LaSure said.

Beyond the Blues, another insurer to watch is Centene, which is expanding its ACA plan footprint. The St. Louis-based payer is growing ACA plan coverage in six states and entering three new ones (Kansas, Nevada and Missouri).

Centene has experience in Medicaid managed care plans. Those plans are closer to the ACA plan population than employer-based plans, so that could be a reason company officials spoke positively about their experience in the ACA market. Centene, which has 1.2 million ACA plan members, announced earlier this year it saw 69% growth in the first quarter of the year.

What about 2019?

Will more insurance companies drop out of the ACA exchanges for 2019? A lot can change over a year — or even over a week given the current political climate. Predicting the future is difficult when everything keeps changing.

However, health insurance experts agree that unless Congress passes legislation to provide CSRs — and take the decision out of the hands of the president — more payers will leave in 2019 and members’ costs will continue to skyrocket.

This scenario would lead to counties with no ACA plan options in 2019, more counties with only one payer, difficult negotiations with payers, higher costs for members and likely more bad debt for providers.

One possible solution may come from the states. States are seeking their own reinsurance programs, which helps insurers manage risk. Brooks-LaSure said states could create reinsurance programs to help balance the market.

Ultimately, however, she would prefer a federal solution. “A national reinsurance program would be great. I’m not sure if it’s feasible now,” she said.

Healthcare, Insurance

How Will Expanding Catastrophic Health Plans Affect Providers?

Originally published on Healthcare Dive.

President Donald Trump’s recent executive order to expand catastrophic health insurance plans would offer a low-cost alternative to people in the Affordable Care Act (ACA) exchanges. However, there are serious questions about what they would mean for consumers, providers and hospitals.

The expansion of catastrophic plans would likely result in less utilization of providers and could increase costs as patients put off care until their medical issues are more serious, and therefore more costly. But it could also push providers to improve their patient engagement and embrace the increasing level of consumerism in healthcare, experts say.

It’s a mixed bag for payers as well. These plans could upset the balance of risk pools, but insurers can benefit from offering more options to beneficiaries.

Bret Schroeder, healthcare expert at PA Consulting Group, told Healthcare Dive there is market demand for less-costly plans. Expanding catastrophic plans could help patients who can’t afford more comprehensive plans. The downside is consumers will pay more out-of-pocket costs if they need care.

“If you’re unemployed and seeing skyrocketing premiums, this is an attempt to get care at lower costs. On the other hand, there’s a slippery slope in terms of the financial impact, which can be significant,” Schroeder said.

What are catastrophic plans?

Catastrophic plans are meant as a low-cost safety net from financial ruin. Members in those plans pay little for premiums, but also have the highest deductibles allowed by the ACA. How high? This year, the deductible was $7,150 for an individual plan and next year that increases to $7,350 per person and $14,700 for a family policy.

These plans cover you if you have a serious health issue that surpasses your deductible, but you’re on the hook for out-of-pocket costs until you reach that deductible.

Unlike his executive order to stop cost-sharing reduction (CSR) payments to insurers, Trump’s order including catastrophic plans won’t cause any changes soon. Instead, his action directed the Departments of the Treasury, Labor and Health and Human Services to “consider expanding coverage through low-cost short-term limited duration insurance,” also known as catastrophic insurance. That executive order also trumpeted association health plans.

The departments would need to partake a process of proposing rules and getting public input, which could take years. So, it’s going to be a while before catastrophic health plan expansion happens. Catastrophic health insurance is already part of the ACA exchanges, but it’s not open to everyone. The only people eligible for the short-term plan are those under 30 or with a hardship exemption or affordability exemption. Trump’s order would open up the-short-term plans to more people, possibly everyone.

Currently, the short-term plans hold a small portion of the ACA exchanges market. Out of the 12.2 million people with exchange plans altogether at the beginning of the year, only about 110,000 people were enrolled in ACA catastrophic plans.

People currently enrolled in catastrophic plans are covered for the same essential health benefits as those in the other ACA plans. However, in Trump’s executive order, he suggested catastrophic plans could be exempt from ACA provisions, which could lower costs of the plans, but also offer fewer benefits.

Trump’s proposal also looks to increase the length of the short-term plans. Now, the plans are meant strictly as a stop-gap measure to provide a low-cost option before the person enrolls in a “metal” plan in the exchanges or an employer-based plan. The ACA only allows for three-month catastrophic plans. However, Trump is looking to making them a more permanent option, with people being able to stay on the plans for a year.

What could this mean for providers and hospitals?

Rita Numerof, co-founder and president of Numerof & Associates, told Healthcare Dive studies on high-deductible health plans (HDHP), such as catastrophic health plans, show they reduce healthcare costs, at least in the short-term, but that’s not always positive.

HDHP members often delay care because those plans require the consumer to shoulder more of the cost. Delaying care can lead to long-term health problems for the patients — and less utilization for providers.

“Based on this evidence, we should expect an increase in catastrophic health plan enrollment to result in decreased utilization and lower short-term healthcare costs,” Numerof said. She added that not getting appropriate health services and not adhering to medication can cost more in the long run and lead to more severe health issues over time.

Having more patients pay a larger percentage of their healthcare bills also likely means more uncompensated care and bad debt for providers and hospitals. Stenglein said health systems are already seeing patients paying more out-of-pocket. A recent Kaiser Family Foundation study found that the average deductible for people in employer-based health insurance increased from $303 in 2006 to $1,505 in 2017.

Having people pick up a larger portion of healthcare bills also complicates the billing cycle. Hospitals and providers need to track down payments from patients rather than dealing directly with payers. That’s harder on health systems and more time intensive.

Expanding catastrophic plans may cause issues for providers, but reimbursements to hospitals and providers likely won’t see a change. Numerof said healthcare companies have already seen downward pressure on reimbursements and she doesn’t see that ending, but catastrophic plans won’t quicken that.

What does this mean for payers?

Beyond helping people between jobs, Trump views catastrophic plans as a solution to those who live in counties with only one insurer offering ACA exchange plans, people with limited provider networks and those who missed open enrollment. Nearly half of counties will only have one ACA exchange payer in 2018.

Numerof said the executive order looks to promote competition within the health insurance market and offer more choices for consumers. Numerof said the order is a step in the right direction regarding healthcare consumerism.

There are questions as to whether catastrophic plans could help insure more Americans. Gallup reported recently that the percentage of uninsured Americans increased for the first time since 2014 and is now at 12.3%. Numerof said it’s difficult to know whether expanding short-term plans might improve those numbers. “Ultimately, if the goal is to ensure everyone has access to healthcare in this county, we must first focus on bringing down the overall cost of healthcare,” she said.

Chris Stenglein, CEO of Provider Web Capital, which works on both the practice and patient side of financing, told Healthcare Dive that catastrophic plans could help people who are currently uninsured. “If you don’t have insurance today and you have a high-deductible plan, it’s better than nothing,” he said.

For payers, there is a worry that expanding catastrophic plans may result in healthy people abandoning other types of plans. This could create an unbalanced risk pool in the other plans, which will lead to higher costs for the remaining members.

However, UnitedHealthcare, for one, is speaking positively about catastrophic health plans. During a recent third-quarter earnings call, UnitedHealth officials said they are interested in both types of plans in Trump’s executive order (short-term and association plans).

What can providers and hospitals do?

More HDHPs and catastrophic plans could spark further healthcare consumerism. Numerof said more patients will demand data from providers so they can make better healthcare choices. That information could include costs and quality data for facilities, physicians and treatment options.

Consumers already have difficulty finding information about cost, quality and outcomes. That needs to change, she said.

“Consumers that are responsible for a greater share of the healthcare dollar will also expect a more convenient healthcare experience — from scheduling initial appointments and the intake process to the discussion and scheduling of follow-up treatment,” she said. She added that patients will likely prefer getting care at lower-cost settings, such as ambulatory surgery centers, retail clinics and even within their own homes. That means fewer dollars for hospitals.

Healthcare consumerism is already forcing hospitals and health systems to rethink their business models to remain viable, Numerof said.

“(Healthcare delivery executives) need to place less emphasis on site-level reimbursement and more emphasis on finding new and innovative ways to increase market share. One way to do this is by shifting elements of care delivery away from high-end, expensive settings to more convenient and affordable options for consumers,” she said.

Stenglein said greater consumerism is an opportunity for providers to engage patients. One way to accomplish this is to offer multiple payment options, including extended billing options that give patients a longer time to pay for services, he said.

Stenglein suggests caregivers remain focused on providing healthcare and delegate financial tasks to administrators, front-end staff or outsource to another company. What’s important, he said, is for providers to innovate and practice medicine and let others handle the financial aspect.

Stenglein offered these solutions for providers:

  • Implement more affordable tech-based health solutions like text messaging services or appointment scheduling apps
  • Provide counseling with onsite billing staff to make bills easier to pay and understand
  • Supply patients with estimation tools from practice management & EHR systems
  • Consider practice financing options to bridge any revenue gaps from patients
  • Offer flexible patient financing options — including longer terms — to provide more manageable solutions for families by offsetting costs

Despite the potentially negative impacts to providers and hospitals, Numerof said catastrophic plans are an opportunity for hospitals and providers to compete for business and help patients make better healthcare decisions.

Numerof said providers that will benefit from more catastrophic plans include those that:

Offer patients alternative products and services

  • Demonstrate and communicate economic and clinical value through the use of costs and outcomes data
  • Manage variation in cost and quality across the continuum of care
  • Operate efficiently
  • Show transparency about cost and quality of services

“This is an opportunity for those organizations that want to move to total cost of care and are focused on caring for patients in a more comprehensive way to compete for patients,” said Numerof.

Healthcare

Trump Eyes Executive Order to Cripple Individual Mandate

Originally published on Healthcare Dive.

President Donald Trump’s administration has reportedly prepared an executive order to end the Affordable Care Act’s (ACA) individual mandate. Trump may direct his departments to not enforce the mandate and could allow for more hardship exemptions that let people avoid fines for not having coverage.

Trump is reportedly not following through until he sees whether an individual mandate repeal winds up in major tax legislation. Republicans are trying to pass a tax bill by the end of the year, but they need to find ways to fund the $1.4 trillion tax cut over 10 years. One way is by repealing the individual mandate, which could save $416 billion over a decade.

 

House Speaker Paul Ryan (R-Wis.) said the individual mandate repeal isn’t part of the current tax bill, but leaders could add it to the legislation.

The Congressional Budget Office predicted earlier this year that about 15 million Americans would lose coverage over 10 years and premiums would increase 20% for individual plans without the individual mandate.

Scrapping the individual mandate would result in fewer people seeking health insurance and fewer government subsidies to help people buy coverage.

Repealing or seriously weakening the mandate would also result in healthier people leaving the insurance markets. Healthier members help offset the sickest members. Without that offset, the health insurance markets will become unbalanced, which would likely result in higher premiums and out-of-pocket costs for those who maintain coverage. Ending the individual mandate would also cause more payers to flee the ACA exchanges.

Increasingly frustrated by the Republican-led Congress not passing ACA repeal legislation this year, the president has taken other ways to chip away at the ACA law. One of his first executive orders in January requested the HHS “exercise all authority and discretion” to delay ACA provisions that impact members and states financially.

That order led to the CMS’ recent proposed rule that would allow states to bypass the ACA’s essential health benefits (EHBs) and let them decide on their own EHBs. It would also remove regulations that require payers in the ACA exchanges to pay a certain amount of premium dollars on claims. Right now, the ACA requires payers in the exchanges to uphold at least an 80% medical loss ratio. In the proposed rule, states would also have more influence over deciding what’s considered a qualifying health plan.

Trump additionally signed an executive order to allow small businesses and groups of people to come together to buy insurance as an association health plan. That order also expands short-term catastrophic plans, which offer barebones insurance coverage with high deductibles. Currently, only young people and those who meet hardship requirements can buy catastrophic plans in the exchanges. Trump’s order could open catastrophic plans for everyone.

In addition to the executive orders, the Trump administration has slashed the ACA advertising budget by 90% and cut the open enrollment period in half this year.

ACA opponent on Capitol Hill haven’t been as successful as the president in weakening the law. The House could add an individual mandate repeal to its tax bill, but the legislation may face impenetrable obstacles in the Senate. The Senate has already failed to pass ACA repeal legislation multiple times this year. Trying to wipe out a key plank to the ACA in the Senate likely won’t happen.

If Congress fails to repeal the individual mandate, the president may once again take aim at the ACA. The president’s previous executive orders and policies have wounded the ACA, but harming the individual mandate could be the final trump card that topples the ACA exchanges.

 

Personal Finance

A Whole New World of Rewards for Disney Fans

Originally published on Credit Karma.

You no longer have to wish upon a star to have Mickey Mouse, Tinker Bell or even Yoda on your credit card.

Disney offers two rewards credit cards through Chase that offer all kinds of Disney-related perks: Disney® Premier Visa® Card and Disney® Visa® Card. From fun Disney and Star Wars card art to the chance to earn Disney Rewards Dollars that you can use toward Disney products or vacations, these cards are perfect for fueling your Disney fanatic side.

Disney® Premier Visa® Card takes the perks one step further by offering a more generous rewards program and introductory bonus. These add-ons come with a $49 annual fee, while Disney® Visa® Card charges no annual fee, but we still think Disney® Premier Visa® Card is the clear winner between the two.

Let’s compare the cards side-by-side to find out why.

See Credit Karma page for side-by-side comparison.

The winner: Why we prefer Disney® Premier Visa® Card

Both cards offer great Disney benefits, but Disney® Premier Visa® Card gives a little bit extra. Yes, that “extra” come with a $49 annual fee, but you can more than offset the cost if you expect to use your card for everyday purchases or plan to use the card to pay for an upcoming flight.

Extra rewards

Disney® Premier Visa® Card lets you earn 1 percent in Disney Rewards Dollars on your everyday purchases and 2 percent at gas stations, grocery stores, restaurants and most Disney locations. Those locations include Walt Disney World® Resort, Disneyland® Resort, Disney Cruise Line and more.

With Disney® Visa® Card, you only earn 1 percent on all purchases.

Option to redeem points toward flights

With the Disney® Premier Visa® Card, you can even redeem Disney Rewards Dollars toward flights. There are no airline limitations or blackout days. Just pay for a flight using your Disney® Premier Visa® Card, then redeem your Disney Rewards Dollars for a statement credit toward your ticket purchase. (Just make sure you redeem them within 60 days of purchasing your ticket.)

This flight perk means you could use your Disney® Premier Visa® Card to book a roundtrip flight to a Disney resort, enjoy card benefits while you’re there, earn more Disney Rewards Dollars while you’re at it, then fly home and partially cover your flight by redeeming your Disney Rewards Dollars.

Note that with either card, once you rack up your Disney Rewards Dollars, you can use them toward Disney and Star Wars toys and movies at Disney Store or other Disney locations. You can also request a Disney Rewards Redemption Card once you collect 20 Disney Rewards Dollars. However, it’s only with Disney® Premier Visa® Card that you can redeem points for statement credit toward flights.

As a bonus, there are no limits on the number of Disney Rewards Dollars you can earn with both cards, so you have unlimited opportunity to save up for a big Disney trip or purchase.

Special events and discounts

The following special discounts and events are available to cardholders of either Disney card.

As a card member, you have access to exclusive events at Disney Store and VIP packages when you buy premium tickets to Aladdin or The Lion King on Broadway.

You get 10 percent off select merchandise purchases of $50 or more at Disney Store and DisneyStore.com, and at select locations at Disneyland® Resort, Walt Disney World® Resort, Disney’s Beach Resort Destinations and the Aulani Resort in Oahu, Hawaii.

You and six guests can also enjoy one Disney Character Experience per day at private cardholder locations at Disney parks. Plus, you can enjoy 10 percent off select dining locations most days at Disneyland® and Walt Disney World® Resorts.

Cool card designs

Both Disney credit cards offer card art that will be the envy of your Disney-loving friends. You can choose from 10 different designs, including the Magic Kingdom, Sorcerer Mickey and Elsa. There are cards with Yoda and Darth Vader for Star Wars fans, too.

Generous introductory bonus

We’ve gone over all of the Disney perks, but this card is more than just a rewards card for Disney purchases. You also earn a $200 statement credit when you spend $500 on purchases with Disney® Premier Visa® Card in the first three months from account opening.

With the Disney® Visa® Card, you only get a $50 statement after your first purchase.

Counterpoint: Why you might want the Disney® Visa® Card instead

Disney® Visa® Card offers many of the same benefits as the premier card, but without an annual fee.

You still get the choice of 10 card designs, the prestige of a Disney card and the chance to earn 1 percent in Disney Rewards Dollars on all purchases. But you miss out on Disney® Premier Visa® Card’s added perks.

When is Disney® Visa® Card a better bet? If you don’t plan to use it much.

Maybe you already have other cards and see the Disney card as a cool addition to your wallet, but not one you expect you’ll use that often. In that case, a card without an annual fee could be a better choice.

This card might also be a wise move if you’re interested in the Disney discounts and special events, but don’t care as much about the rewards program. This card earns 1 percent in Disney Rewards Dollars across all purchases, so you may not collect rewards as quickly. The premier card rewards can add up more rapidly, but that won’t matter if you’re not interested in the perks unique to Disney® Premier Visa® Card.

Healthcare

What Will be the Fallout from Anthem’s New Imaging Policy?

Originally published on Healthcare Dive.

A movement health systems have been dreading is gaining speed, as commercial and government payers are implementing more and more policies that restrict reimbursements for services that can be performed outside a hospital. Anthem’s recent announcement that it will no longer pay for MRIs and CT scans performed at a hospital in an outpatient basis could be a harbinger for what’s to come.

Several hospitals and health systems have already taken steps to recapture revenue lost to these demands for pushing patients outside their walls whenever possible. But with the industry already suffering from reduced patient volumes and lower reimbursements in general, policies restricting the services hospitals count on for steady cash flow could be a major disruption.

Anthem’s new rule

Anthem plans to implement the policy in 13 of its 14 states by March 2018, with only New Hampshire exempt from the new policy. The payer has already implemented it in nine states.

Hospital officials are predictably concerned about what this could mean to their margins. Higher in-hospital reimbursement for MRIs and CT scans made them profitable, even though they’re not a major service for hospitals. One estimate said some health systems collect more than half of their profit from imaging services.

Anthem’s new policy is part of a payer movement to reduce healthcare costs by pushing patients to get care at locations less expensive than hospitals. That’s also true for another controversial Anthem policy to stop paying for Emergency Department (ED) care it deems unnecessary.

Trying to cut healthcare costs is nothing new for insurance companies, or the industry in general. For many years, payers and employers have created health plans that reward members for getting care at less expensive locations. That benefit design has resulted in patients paying more to go to specialists rather than primary care physicians and going to EDs rather than places like urgent care centers. Payers have also nudged members to get more services as an outpatient and avoid being admitted to a hospital.

Those cost-cutting efforts seem to be working. Altarum’s Center for Sustainable Health Spending’s recent Health Sector Economic Indicators reported overall national health spending growth decreased in the second quarter. A major reason for the slower spending growth was connected to hospital spending growth, which was only 1.3% rather than the expected 4% growth rate. Hospital spending growth was the slowest major healthcare category over the past year. Hospital spending increased in June by 0.8%, which was the slowest growth rate year-over-year since January 1989.

While payers have looked for passive ways to re-direct patient care in the past, Anthem’s two new policies extend beyond benefit design and go to the heart of hospital funding. In recent years, hospitals overcame lower Medicare reimbursements by making more on imaging and ED services, which have been steady profit centers. Now, hospitals in 13 states will see that funding dry up.

Anthem said its new Imaging Clinical Site of Care program dovetails with the Institute for Healthcare Improvement Triple Aim Initiative, which seeks to improve the patient experience, improve population health and reduce per capita cost of healthcare.

Anthem subsidiary AIM Specialty Health is administering the program to identify when hospital outpatient services for services like MRIs and CT scans are medically necessary. Lori McLaughlin, Anthem communications director, told Healthcare Dive getting services in a “clinically appropriate setting” like a freestanding outpatient clinic or imaging center is less expensive and clinical research shows those locations are safe.

Anthem said the policy will result in lower healthcare costs for members and the healthcare industry overall. Imaging services in a hospital can cost $1,000 more than a freestanding clinic, and that cost could fall to the patient if they haven’t met their plan’s deductible.

Anthem said AIM Speciality Health will only review the level of care if there are at least two alternate freestanding imaging centers nearby. So, imaging would be approved in rural areas that might not have more than one option for an MRI or CT scan, according to the payer.

McLaughlin said Anthem doesn’t know how much it has saved or how many hospital scans it has reduced because the plan is still so new. With the imaging policy set, McLaughlin said Anthem will continue to look for more ways to save healthcare costs.

“Anthem’s primary concern is to provide access to quality, safe and affordable healthcare for our affiliated health plan members. We’re always looking at new approaches to ensure clinical quality and improve affordability and we are committed to reducing overall medical cost where possible when the safety of the member is not put at risk,” she said.

Will other payers follow suit?

Anthem is a major insurer in more than a dozen states, so any decision will have a ripple effect in those areas and beyond.

Lea Halim, senior research consultant at Advisory Board, told Healthcare Dive other payers will likely watch how Anthem’s policy plays out.

“Will Anthem get a lot of pushback from patients and employers? Will hospital lobbies succeed in getting state governments to force Anthem to roll back the policy? If Anthem does not face, or successfully overcomes these types of challenges, other payers may very well follow suit,” Halim said.

Payers are working to bring down costs in other ways, too. One example is insurance companies buying surgical centers, said Gregory Hagood, senior managing director at SOLIC Capital Advisors, which works with hospitals on mergers and acquisitions. Another example is payers creating networks that encourage members to use alternative (i.e., less expensive) services.

Hagood expects payers will continue to look for more ways to cut costs, including reviewing elective services performed in hospitals. “We’re seeing all insurance companies trying to create an alternative network where, theoretically, the quality of these centers are what you get in the hospital, but at a lower rate because you don’t have all the overhead of hospitals,” he told Healthcare Dive.

Private companies like Anthem aren’t the only payers creating policies that cut costs and affect hospital finances. The CMS also recently announced a proposal to make costs more site neutral. With this change, CMS would pay services at off-campus hospital outpatient departments by 25% of regular outpatient rates (while increasing outpatient payments overall by 1.75%). The CMS expects the proposal would save about $500 million this year. The American Hospital Association has spoken out vociferously against the proposal.

Medicare is also proposing hip surgeries in surgery centers in addition to just hospitals. Knee and hip surgeries have the highest margins for hospitals, but Medicare is pushing more volume to outpatient services.

“Those are huge dollars you’re talking about there,” Hagood said. “It’s another where a hospital’s lucrative services like joint replacement and imaging are starting to get squeezed from both sides — from CMS and private payers.”

Impact to hospitals

Anthem’s size and importance in the 13 states where it is active means its imaging policy will affect hospital finances. However, Paul Keckley, healthcare researcher and managing editor of The Keckley Report, told Healthcare Dive many hospitals are already competing with freestanding and physician-owned facilities. So, though Anthem’s policy will affect hospitals, Keckley said those facilities are already “accustomed to the downward pressure on their margins.”

Hagood estimates that MRIs and CT scans make up only 5%-10% of a hospital’s business, but those services are profitable and have huge profit margins for hospitals.

Hagood said an MRI for a knee or shoulder would cost about $500 on average in a physician’s office, but that would swell to somewhere between $1,000 and $2,000 at hospitals in many markets. This means hospitals are making an average of $1,000 more on each procedure, he said.

Spread over a year, that’s about $800,000 more profit for hospitals, which these facilities stand to lose with Anthem’s new imaging policy.

Halim said hospitals stand to lose the reimbursements from Anthem, but those with their own freestanding imaging facilities that bill at a lower rate already should be able to capture a portion of the lost revenue.

Beyond hospital finances, the policy change would impact patients both positively and negatively. Anthem patients in a high-deductible plan will pay less out-of-pocket for an MRI or CT scan at freestanding facilities. However, patients not in a high-deductible plan and who may not pay much out-of-pocket anyway, may feel inconvenienced if they’re told they can’t get the services at their local hospital. Plus, if the ordering physician doesn’t direct the patient to a freestanding facility and the person gets the services at a hospital, Anthem could deny the claim and the patient will get stuck with the bill, said Halim.

What will hospitals do?

Hagood doesn’t think hospitals will make up the lost funding in other areas. Instead, he expects staffing cuts and hospitals squeezing vendor contracts for supplies and maintenance.

One way hospitals could respond is by working with the payer to get a little more money for imaging than a freestanding imaging center, but much less than what Anthem has been paying hospitals. Hagood said hospitals may get a “modest premium,” such as maybe get another $100 or $200 for a scan instead of the extra $1,000 Anthem has been paying them.

Halim said hospitals may accept the outpatient payment rate for hospital-based facilities in exchange for a policy waiver. Plus, they may invest more in their own freestanding imaging centers.

“If Anthem represents a significant portion of their revenue — and if the new policy sticks — that may lead some hospitals to consider investing in freestanding facilities so that they can still capture Anthem’s outpatient imaging business,” Halim said.

Personal Finance

American Express Waives Annual Fees for Military Personnel, Their Spouses

Originally published on CardRatings.

American Express offers quite the money-saving perk to military personnel: The issuer waives the annual fees for its credit cards – even for The Platinum Card® from American Express, which comes with a $550 annual fee price tag.

This is largely an under-the-radar perk, but can be a huge moneysaver for American Express cardholders, especially if you’re a service member who wants to enjoy the lucrative luxury perks that accompany The Platinum Card® from American Express. As an added bonus, the spouses of military personnel are also eligible for the annual-fee waiver.

Before you start crunching numbers only related to your annual fee savings, know this: The Servicemembers Civil Rights Act (SCRA) offers protections to active duty military personnel and their spouses when it comes to a number of financial situation and loan terms and those terms apply regardless of credit card issuer. Amex takes it a step further, however, with the annual-fee waiver. More on the SRCA below, but first, let’s look at some of the top Amex cards military personnel should consider in light of this annual-fee waiver perk.

American Express cards for military personnel

So, now that you know you can get your American Express annual fee waived as an active service member or spouse of a service member, what are some American Express cards to check out?

Well, since that annual fee is going to be waived, you might as well take advantage of some of the fantastic perks (airport lounge access, for instance, with The Platinum Card® from American Express) available with higher-annual-fee cards. In fact, you and your spouse could apply separately to really take advantage of the features and rake in the rewards.

The Platinum Card® from American Express

The Platinum Card® from American Express is the perfect card to have when the card waives the annual fee. Why? It has a $550 annual fee, but servicemembers can benefit from the card’s perks without paying the annual fee that would otherwise be cost-prohibitive.

This is a premium credit card, and you get a lot with it including a generous rewards program if you’re a frequent flyer. The card offers a whopping five-times the Membership Rewards® points on flights booked directly with the airlines or with American Express Travel. Plus, you get a 60,000-point bonus when you spend $5,000 on your card in the first three months.

The card offers many travel-related perks, including access to hundreds of airport lounges through the Global Lounge Collection, 24/7 access to the Platinum Club Concierge who can help with travel arrangements, and a credit to cover your Global Entry or TSA Precheck™ application fee every five years. Plus, cardholders have access to the Hotel Collection and Fine Hotels and Resorts programs, which give members perks such as hotel credits for spa services and meals and complimentary WiFi and room upgrades at select hotels. And, as you would expect with a card of this caliber, you won’t be charged foreign transaction fees when you use your card while abroad.

The Platinum Card® from American Express also gives you up to $200 a year in statement credit to cover travel-related charges like baggage fees and in-flight refreshments that you charge on your card.

Not too shabby when you consider you won’t be paying any annual fee.


Blue Cash Preferred® Card from American Express

The Blue Cash Preferred® Card from American Express doesn’t have an untouchable annual fee – it’s just $95, and, thanks to a special offer, that’s waived for everyone for the first year, but as a member of the military you don’t even have to worry about it after the first year. So, while The Platinum Card® from American Express is probably the card you want to consider first given the huge annual fee savings, the Blue Cash Preferred® Card from American Express is a worthwhile candidate for the second slot in your wallet.

The reward categories for the Blue Cash Preferred® Card from American Express make it an excellent card for your everyday spending; you earn 6 percent back on the first $6,000 spent annually at U.S. supermarkets, 3 percent back on purchases at U.S. gas stations and select U.S. department stores and 1 percent back on all your other purchases. By the way, most supermarkets these days sell a host of gift cards and, yes, you can earn 6 percent back when you buy gift cards at those supermarkets.

Since you, as a member of the military, are eligible for waived annual fees, consider carrying both the Blue Cash Preferred® Card from American Express for your everyday spending AND The Platinum Card® from American Express with which you earn maximum rewards on your travel and enjoy those luxury travel perks described above.

There’s really no reason not to carry both cards and those rewards you’ll be racking up will come in handy down the road.


Premier Rewards Gold Card from American Express

Premier Rewards Gold Card from American Express is another exclusive card that charges a $195 annual fee (waived for everyone the first year). It also offers a travel-related rewards program, but it adds restaurants, gas stations and supermarkets to its rewards categories, making this another excellent option for your everyday purchases.

The card offers three times the points for flights booked directly with airlines; two points per $1 spent at U.S. restaurants, gas stations and supermarkets; and one point per $1 for all other purchases. The card also gives you 25,000 points when you use the card for $2,000 worth of purchases in the first three months. In addition, you are also eligible for a $100 airline fee credit to cover baggage fees at one pre-selected airline and a $75 hotel credit and room upgrades through The Hotel Collection.

Overall, the travel rewards are not as generous as with The Platinum Card® from American Express and the everyday rewards aren’t as high as with the Blue Cash Preferred® Card from American Express, but if you’re committed to carrying only one credit card, rather than combining the rewards from both The Platinum Card® from American Express and the Blue Cash Preferred® Card from American Express as described above, the Premier Rewards Gold Card from American Express offers the best of both worlds.

How to request a waived fee and SCRA benefits from American Express

If you already have an American Express card, you can call American Express at 1-800-253-1720. Tell the representative that you’re an active duty military member and request a waiver of your card’s annual fee as well as the SCRA protections for your card. Don’t be deterred if the customer service rep isn’t familiar with these benefits; just request to speak with a supervisor. You should also expect to answer a series of questions about your military service.

You can also contact American Express online. American Express allows you to log into your account and request SCRA benefits. Once you’ve made contact with American Express, you can also send a copy of documents with the account number to: American Express, Attn: Servicemembers Civil Relief Act, PO Box 981535, El Paso, TX 79998-1535. It’s a good idea to contact the company before sending your documents, so Amex is aware that you’re sending documentation its way.

Once American Express has your information, it will review your SCRA eligibility to confirm you are an active duty military member or the spouse of an active service member. American Express will examine the provided documents and check the Department of Defense Manpower Data Center. Be aware that, depending on how long the verification process takes, you may have to pay the annual fee up-front before being reimbursed when your status is verified.

Even if you don’t choose to take advantage of the annual fee waiver offered by American Express (but, really, why wouldn’t you?) each credit card issuer has a similar process to verify your eligibility for SCRA benefits even though they don’t necessarily waive the annual fee, so contact your card company by phone or online and it can start the verification process.

Speaking of the SCRA, just what are some of the benefits? Keep reading to find out.

SCRA protection for active military members

American Express goes above and beyond with its annual-fee waiver, but there is federal legislation that caps interest rates for active servicemembers and their spouses and that law applies to credit cards beyond those issued by American Express.

Congress passed the Servicemembers Civil Rights Act (SCRA) in 2003, which expanded the Soldiers’ and Sailors’ Civil Relief Act of 1940. The SCRA protects the finances of military members (and their families) while they are on active duty. The provisions deal with rental agreements, security deposits, mortgage interest rates, health insurance, income tax payments, mortgage foreclosures, and yes, credit cards.

To be eligible, you must be a:

  • A member of the U.S. Armed Forces on active duty or a reserve component called to active duty,
  • National Guard personnel under a call or order to active duty for more than 30 days,
  • A Public Health Service and National Oceanic and Atmospheric Administration commissioned officer,
  • A U.S. citizen servicing with another nation, which is allied with the U.S. “in the prosecution of a war or military action,” or
  • The spouse of an active duty servicemember.

The SCRA caps active military members’ interest rate at 6 percent for financial obligations incurred before military service. The servicemember must provide the creditor with a copy of his/her military orders and a written notice to take advantage of the interest rate cap, but that’s not a bad hoop to jump through for an interest rate cap that could literally save you hundreds of dollars if you happen to have some credit card debt you’re working to pay off.

The creditor must forgive interest greater than 6 percent. It can’t defer it to later and must also forgive the interest retroactively. Military members have until 180 days after their end of service to send the required documents to the creditor.