Feds offer some relief as ACA rollout continues

Health insurers continue to implement and respond to numerous aspects of the federal health reform law. At the same time, they also seek to gain more control over the cost and quality of care by aligning themselves more closely with providers.

Regulations from Washington are defining how insurers do business in 2011 and beyond. Health plans continue to gear up for anticipated full implementation of the law in 2014, unless legal challenges to the law succeed. That means, in individual states, insurers are participating in and watching closely the development of health insurance exchanges, which will start in 2014. Insurers are also reacting to Institute of Medicine recommendations, released in October, on essential benefit packages that insurers must provide to members who purchase coverage through the exchanges. To the relief of insurers, the recommendations call for flexibility and the need to strike a balance between affordability and comprehensiveness of coverage.

Several high-profile deals with providers highlight insurers' desire to gain more control over the cost and quality of care. UnitedHealth Group announced in September that it would acquire the operations of Monarch HealthCare in Irvine, Calif., an independent practice association with 2,300 physicians. Monarch is engaged in several accountable care organization programs—including with UnitedHealth Group competitor WellPoint. Meanwhile, WellPoint in August completes its $800 million purchase of CareMore Health Plan, Cerritos, Calif., a Medicare managed-care plan that operates 26 clinics in Western states. WellPoint says it will expand this model of community care delivery to beneficiaries.

Other highlights:

• Coverage options for the uninsured are expanding through health reform. Some 2.3 million young adults are added to their parents' health plans as a result of the law, according to the Kaiser Family Foundation. And membership in state high-risk insurance pools picks up. In California, which has one of the largest programs, enrollment hits 5,000 people. The government's program to help employers continue to provide health benefits to early retirees is proving so popular that it pays out

  $4 billion out of $5 billion allocated, according to the CMS.

• Starting in 2011, some health plans must cover preventive services at no cost to patients. Along with the requirement that insurers cover dependents up to age 26, this proves to be one of the more popular provisions of the Patient Protection and Affordable Care Act.
• The cost of coverage continues to rise. Average annual premiums for family coverage in 2011 top $15,000, up 9% over the prior year, according to the Kaiser Family Foundation. Health premiums continue year-over-year to outpace wages and inflation.
• Despite efforts to expand coverage, the number of Americans without health insurance rises from 49 million in 2009 to 49.9 million in 2010, according to U.S. Census figures released this fall.