Veteran insurance exec Counihan heads state’s health-insurance ‘exchange’
Last June Kevin J. Counihan was appointed by Gov. Dannel P. Malloy to head Connecticut’s Health Insurance Exchange. Creating health exchanges in each state is an essential part of the federal government’s Patient Protection & Affordable Care Act (Obamacare). Counihan comes to Connecticut from Massachusetts, where he was chief marketing officer for that state’s Health Insurance Connector Authority, the health-care exchange developed as part of the Bay State’s reform law. He has also been senior vice president of sales and marketing for Tufts Health Plan and a regional vice president for Cigna Corp. Counihan holds an undergraduate degree from the University of Michigan and an MBA from Northwestern University’s Kellogg School of Management.
How did you get from the private to the public sector?
[Massachusetts became] the first state in the country to adopt a mandated health-insurance plan requirement. Like auto insurance, or seat belt laws, helmet laws, it required all residents 18 and above to have health insurance. The [law] created an insurance exchange that served as the foundation for Obamacare and the Affordable Care Act.
When did you start at CHICA and what was the job?
In 2006 the executive director was named; I was recruited that summer. In these kinds of startups these jobs get very amorphous. My job was to do the marketing research, product design, create the metal tiers — gold, silver, bronze — to enroll members, to help create the Web enrollment portal, to work on the call center. It’s one of those jobs that you start out doing a little bit of everything.
What is a health exchange?
Essentially an online insurance store. It’s a means for individuals and small businesses to buy health insurance in an easier, simpler and more transparent way. The idea is to help garner more value for enrollees through more competition, and to help promote new entrances into markets. They’re a pro-competition, free-market means to buy health insurance. We have five major health plans in [Connecticut]; we’re going to have a sixth one coming in next year and maybe a seventh. In Massachusetts about four plans have about 96 percent of the market share.
What is the role health exchanges play? Is it just for competition, and if there was more competition would we still need it?
The exchange by law has to serve all features required by the law, but it’s an online marketplace. It’s intended to make it easier for people to shop for health insurance — make it simpler to buy, simpler to compare plans, simpler to make decisions, and in the case of federal law, make it easier for them to understand if they’re eligible for federal subsidies.
Have a lot of companies entered the exchange in Massachusetts?
They don’t at this point; they have roughly 1,000 to 2,000 small-business members in the exchange. The plan being offered is not particularly distinguished from other plans offered by the [private] health plans. Small-business programs offered through the federal program are going to be very similar to CBIA in Connecticut, meaning that it’s a defined-contribution model. An employer picks a benchmark plan — it could be ConnectiCare, HMO 35, Anthem and for example is contributing 80 percent of the cost in the silver tier. Then the employee can either accept that plan or they can take the money provided by the employer for the ConnectiCare plan and buy Anthem or Aetna or United or any other plan. In Massachusetts that’s not the plan offered for small business. For small business there are several different HMOs but they’re offered on a sole-source basis, which means the employer would take ConnectiCare or HMO 35 and the employees can either take it or leave it. It didn’t really differentiate itself, and I think that’s why there’s low membership.
What size companies may enter the exchange, and what size companies are affected by Obamacare?
The feds give states the option of defining the employee small-group size as either one to 50 [employees] or one to 150. Many states including Connecticut picked one to 50 initially, but in 2017 the law requires that that automatically gets extended to one to 100.
What percentage of people in Massachusetts have chosen to purchase insurance through the exchange?
It’s got about 225,000 to 230,000 enrollees. In a state of 6.5 million that’s three percent [of insured people] in the exchange. Massachusetts started with ten percent uninsured; it has decreased from ten percent to two percent [uninsured], but not all [newly insured] are going through the exchange. It’s really for individuals.
In order to be subsidized will you have to go through the exchange?
The subsidies are for individuals only, but small businesses can receive tax credits. But neither are available outside the exchange.
If a small business enters the exchange, do the employees have access to subsidy?
They could. The way it works is through the ‘affordability’ provision. If the amount of money paid by the employee for their share of the [health insurance] premium is more than 9.5 percent of their income, they have the ability to opt out of the employer plan and go directly to the exchange.
So a low-income employee can go into the exchange and get a subsidy?
Yes. But when that happens the employer pays a penalty of $2,000 per employee. There’s a penalty for employers offering plans that employees can’t afford or they’re not being paid enough in salary to afford coverage. If the employer for example is going to pay at least 50 percent of the cost of the coverage then the remaining percentage which is paid by the employee becomes part of the [formula to determine if the insurance is still] ‘unaffordable.’
So companies that employ low-income workers will have a pretty major burden with those penalties?
If you have firms with that type of salary level, those firms are often going to be eligible for tax credits to the employer to make the coverage more affordable. [The Obamacare legislation] tried to contemplate situations where employers who may not be offering coverage right now — beauty salons, nail salons, sandwich shops, etc. — might be able to get some significant tax credits, like 50 percent, in order to offer coverage. But you do need to be in the exchange for that.
Wouldn’t that make for a lot of companies moving into the exchange for subsidies and tax credits?
I don’t think so. I think there’s going to be a market for it, but it’s going to be a niche. I don’t think every employer wants to move to a defined-contribution model. I don’t think every employer wants to move to a CBIA type of product.
What are the income levels to qualify for a subsidy?
The subsidies are available up to 400 percent of the Federal Poverty Level (FPL). For a family of four right now that’s $92,000.
Is that the same subsidy as Mississippi, where the median income is much lower?
Yes. [The federal government doesn’t] regionally adjust things like Social Security, Medicare or Medicaid. They make national laws with national formulas. It certainly benefits some states more than others; that’s true of the tax credits for small business. You can argue it’s a weakness [of the legislation].
How is age banding and pricing handled?
What health carriers typically do is they have something called rating slopes, and that is that their rates don’t go up consistently. So they can go up very slowly, and then at [age] 40 they can go higher. The [new] law does away with slopes and moves rates up consistently by year [of age of insured person]. Instead of five-year age brackets it goes up by year. It’ll just continually go up.
But it is still an aged-based pricing plan?
There’s obviously a real relationship between age and illness: The older we get the more likely we are to incur medical costs. But there is an age compression ratio. Currently in Connecticut it is six to one — the highest that an older person can pay is six times what a younger person can pay [in insurance premiums]. So if a person at 20 years old is being charged $100, then the highest an older person can be charged is $600. The [Affordable Care Act] changes that to three to one, so it’s going to be cheaper for older people but more expensive for younger.
What are the bronze, silver and gold tiers you referred to?
These are actuarial values to help people determine the amount of coverage that a plan covers. A bronze plan would have a 60-percent actuarial value, which means the insurance company will pay for 60 percent of the costs on average and the individual 40 percent. The silver plan has a 70 percent actuarial value, so he insurance company pays 70 percent and the individual pays 30. Gold is 80-20 and platinum is 90-10.
This seems like poor people get this low-end plan anyway. How ‘progressive’ is that?
The poorest people are going to be in Medicaid. You have to have people at 138 percent and above of the FPL before this gold, silver, bronze stuff comes into play. In the exchange, anyone who’s interested in subsidies or shopping there will go into the exchange, then the system will determine if they’re eligible for Medicaid or the tax subsidies, or unsubsidized commercial insurance.
In the commercial marketplace, where do most plans fall in the bronze/silver/gold matrix?
Most individuals are in the bronze level. Most small businesses are in the bronze-to-silver [coverage range] and most large firms are in the silver-to-gold level.
There are a lot of non-profit health insurance companies. What advantage does an exchange have over these non-profits?
Exchanges are distribution arms, not insurance companies. It’s not about being for-profit or not-for-profit; [the exchange] is there to distribute product that meet the criteria established by the law and by the state. The [Obamacare-mandated] Essential Health Benefits have criteria in the law: patient hospitalization, pharmacy, prescription drugs, X-ray laboratory, mental health, drug abuse.
Who will determine the benefits that have to be covered in the exchange and in health plans generally?
Right now all states determine what’s in their Essential Benefits plan until 2016, when [the federal Department of] Health & Human Services takes it over. I’m more concerned about the impact it’s going to have on such things as [benefit] mandates. If the feds establish Essential Health Benefits, they’re going to include a certain amount of what every state may consider mandated coverage. Anything above what the feds require will have to be paid for by the state. This can be extremely expensive for states.
Massachusetts and Connecticut have had among the richest benefits and most advanced health-care infrastructure in the country. Is there a danger now that we’ll see a leveling out with poorer states?
The whole purpose of Essential Benefits is to level out — to make Mississippi more like Connecticut and Massachusetts. Many states with very rich mandates – Connecticut, New York, Massachusetts, California, Washington — may have to pay for them. That’s going to be a very different discussion at the legislative level.
Will the state cover ‘medical marijuana’?
The benefits in the exchange have to cover all state mandates. So anything — whether it’s in-vitro fertilization, autism and such — all have to be included as plans offered in the exchange. The states will be at their discretion if they want to cover above what the feds require. They [state governments] just have to pay for it. The changes in the law impact all insurance plans, not just the ones sold in the exchange.
So if Connecticut wanted to keep coverage for something like autism but it didn’t pass national muster, then all plans in the state will have to cover autism and the state of Connecticut will have to pay for it?
The federal government in 2016 will establish a minimum standard of coverage. Any state that wants to add richer coverage to that will not have that reimbursed by the feds in the subsidized payment. The states would have to add to the cost of that in the subsidy. Only for people who are being subsidized.
When does the exchange take effect?
Open enrollment [begins] in October for [coverage commencing] January 1, 2014. The open enrollment runs through March 31 . You can only enroll during a specific period of time. The first time will be a six-month period, and then going forward it will be three months from October 1 to December 31. So if you don’t get in you have to wait until next year. The reason for it is that if people are allowed to enroll at any time, then they’re also going to wait until they get sick to enroll. The penalty for the first year is $95 — not much of a penalty. The penalty in Massachusetts is now about $1,000. My experience is that until [the penalty] gets to that level it’s really not that meaningful.
How many people are uninsured in Connecticut?
[Currently] 9.6 percent are uninsured. I think we can reach the Massachusetts [98 percent coverage] number, but it’s going to take several years, as it did in Massachusetts. One of the challenges is that people expect too much of this thing. Some thought that with the exchange, costs were going to go down — things will be 20 percent cheaper, that our uninsured level will drop to two percent. None of those things are true.
Isn’t it typically true that more people buying any product usually drives the price up?
If you get more people going into some type of things the price could drop. But health insurance is different — health economics runs counter to normal economics, which is one of the reasons it’s so expensive. We’re expecting to get 120,000 to 150,000 people in the exchange. Medicaid will probably expand by about 75,000 to another 100,000. Between Medicaid and the exchange, we’ll see somewhere in the order of about 200,000 people newly insured — about two thirds of the [presently] uninsured. The laws reimburse at 100 percent the increase in Medicaid for the first few years. But after those first couple years, [cost of coverage] does revert back to the state on a detrimental basis.
What would you like business people to know?
The exchange is going to be up and running in October. We have a website: ct.gov/hix. It has a lot of information for small businesses to understand what their opportunities and obligations are. They should go to that website, speak to their [insurance] broker, speak to our staff and help them understand what’s in the law. You can go through a broker or you can buy direct, but it will cost the same either way.
’One of the challenges is that people expect too much of this thing. Some thought that with the exchange, costs were going to go down — things will be 20 percent cheaper, that our uninsured level will drop to two percent. None of those things are true.’
Paid sick leave, medical marijuana and First Five top state business headlines
Several significant developments impacted employment law and other job-related issues this year. Connecticut companies became more liable for alleged sexual harassment incidents. Gov. Dannel P. Malloy’s “First Five” initiative continued to subsidize big companies that promised large-scale job creation. And in one of the more controversial changes, state lawmakers approved the use of medical marijuana, throwing companies into a quandary regarding how to interpret and implement the new law.
“This legislation is about accomplishing one objective: providing relief to those with severe medical illnesses,” said Malloy shortly before signing the bill into law. At that time he also acknowledged lingering skepticism.
“I understand many of the concerns raised by opponents,” Malloy said in a release. “We don’t want Connecticut to follow the path pursued by some other states, which essentially would legalize marijuana for anyone willing to find the right doctor and get the right prescription. In my opinion, such efforts run counter to federal law. Under this proposal, however, the [state’s] Department of Consumer Protection will be able to carefully regulate and monitor the medicinal use of this drug in order to avoid the problems encountered in some other states.”
Although medical marijuana in Connecticut is supposed to be used for life-threatening and debilitating illnesses, it allows for workforce participation for those using it.
While some business leaders were at a loss for words about how they would address the law, others spoke out against it.
“The Connecticut State Medical Society continues to have concern about smoking marijuana for medicinal purposes,” stated Audrey Honig Geragosian, CSMS director of communications. “There is inadequate scientific evidence to suggest its benefits outweigh either concern for patient and public safety or the long-term health risks posed by ingestion through smoking.”
CSMS President Michael M. Krinsky, MD lamented the lack of guidelines. “We have no guidance whatsoever,” he said, adding that physicians should “wait and see how things are written” before making changes to their regular health-care procedures.
With the law’s passage, Connecticut became the 17th state to approve the use of marijuana for medical use.
Another law, one that became effective the first of the year, affects employers directly in their pocketbooks. That was the state mandate requiring many businesses to provide workers with paid sick leave.
While many companies had already provided paid sick leave, it hadn’t been mandated by state law. Now, for service-sector jobs in particular, it is. The law specifically includes service workers paid hourly wages such as food-service workers, registered nurses, LPNs, home health aides, dental hygienists, administrative assistants, waitstaff, barbers and hairdressers, and fast food workers, among others. However, small businesses with fewer than 50 employees are exempt, as are a number of categories of manufacturers.
Malloy called the law “good public policy” and said in a statement that it would release service workers from the burden of having to work when sick.
“Without paid sick leave, frontline service workers — people who serve us food, who care for our children, and who work in hospitals, for example — are forced to go to work sick to keep their jobs,” Malloy said in a statement prior to signing the bill into law last year. “That’s not a choice I’m comfortable having people make under my tenure, and I’m proud to sign this bill when it comes to my desk.”
A court decision also could have a palpable impact on business in the state, causing them to become more circumspect in how they deal with alleged workplace sexual harassment.
The state Supreme Court ruled in May that Birken Manufacturing Co. of Bloomfield must compensate a former employee more than $90,000 for failing to address and halt on-the-job, homophobic sexual harassment. The former employee claimed that he suffered mentally and physically because of ongoing, same-sex harassment because of his sexual orientation. He said he reported the situation to supervisors, but the harassment continued. The court sided with the complainant and determined that Birken fostered a hostile work environment due to its inaction.
“You’ve got to have a clear and unambiguous policy to specify that you forbid harassment,” explains Emanuel Psarakis, a Quinnipiac University School of Law faculty member, in assessing consequences of the decision. “You should have a policy and have a procedure for people making complaints. If you find harassment, you must engage in prompt, effective remedial action.”
The year also saw broadened legal activity that throws into question the benefit to businesses of intern labor. Last year two former Fox Searchlight Pictures interns — both graduates of Wesleyan University in Middletown — filed suit against the company after working on the Academy Award-winning film Black Swan. They claim that they deserved pay for the menial tasks they performed, which benefited the company.
Since filing the original lawsuit, the pair sought to expand it to include any and all interns who took part in the internship program at Fox Entertainment Group.
Another high-profile lawsuit makes similar claims that interns should be paid for the work they do. This one, filed in March, was against talk show host Charlie Rose and his production company. Coincidentally the plaintiff, like those in the Fox lawsuit, is a Wesleyan graduate.
And, in January, a former intern with Harper’s Bazaar magazine filed suit against its parent company, the Hearst Corp., arguing that she deserved pay for her work.
Many consider the law antithetical to the reasons businesses — especially small businesses — hire unpaid interns in the first place: to help with tasks they cannot afford to hire someone to do. According to the U.S. Department of Labor’s guidelines for internship programs under the Fair Labor Standards Act, the intern must benefit from an internship. What’s more, the work given should be commensurate with training he/she would get in an educational setting, and it should not be of immediate benefit to the employer.
Jill Ferrall, assistant dean for career development at Quinnipiac University’s School of Business, has a suggestion for companies considering hiring unpaid interns — but it’s a solution many employers might not want to hear.
“I always encourage employers to provide some sort of pay, even if its minimum wage,” says Ferrall. She added the ultimately it could benefit the employer by enhancing the quality of an intern’s work.
“Human nature is that if you’re getting paid, even if it’s minimum wage, you’ve got a little more drive,” says Ferrall, “and the student makes [the internship] much more of a commitment.”
Permanent, long-term jobs were the focus of the governor’s “First Five” initiative, which accelerated this year. The latest count is nine companies that have taken advantage of the program through its original or extended version.
Funded through the state’s Department of Economic & Community Development (DECD), First Five is a Malloy administration creation that provides financial incentives to selected companies that promise to create at least 200 new full-time jobs in Connecticut during the course of two years, or 200 new jobs within five years and also invest $25 million in the state.
In October Malloy announced that cable operator Charter Communications Inc. would be the latest addition to the First Five group. The Fortune 500 company says plans to invest in excess of $10 million in the state and bring 200 jobs to the region, according to a press release from the governor’s office. In exchange, Charter will receive a $6.5 million loan, repayable over ten years at 2.0 percent. A deferral of principal payments will be effect for three years. The funds are expected to be used for tenant upgrades and to buy office equipment and furnishings at Charter’s 70,000-square-foot facility at 400 Atlantic Street in Stamford.
“Connecticut is competing at every opportunity to attract and retain good-paying jobs with good benefits, and strengthen our position in key industry sectors in the process,” said Malloy. “Charter’s decision to make Stamford its headquarters serves both of these objectives.
“Connecticut is quickly becoming a place where growth industries can thrive,” Malloy added. “Whether it’s bioscience, digital media or another emerging sector of the economy, the message that Connecticut is open for business is clearly taking hold."
Other businesses participating in the First Five initiative are Cigna, establishing its headquarters in Bloomfield; ESPN, expanding its sports media complex in Bristol; NBC Sports Group, NBC Universal, Stamford; Alexion Pharmaceuticals, relocating its global headquarters from Cheshire to New Haven; CareCentrix, moving an expanded headquarters to Hartford; Sustainable Building Systems, establishing itself in North Haven; Deloitte, expanding operations in Stamford, Hartford and Wilton; and Bridgewater Associates, relocating to Stamford.
WALLINGFORD — The federal government has notified a recently formed non-profit that it will receive funding to apply for licensing as a health insurer in order to create a new, consumer-oriented health benefit plan in Connecticut starting in late 2013.
The award from the U.S. Department of Health & Human Services comes nine months after the creation of HealthyCT, a non-profit created by the Connecticut State Medical Society and its affiliate, CSMS-IPA, an independent practice association. The approval is accompanied by $75.8 million in federal loans to meet anticipated startup costs and reserve-fund thresholds for state licensing.
HealthyCT is expected to offer health-insurance products both on and off the state’s Health Insurance Exchange beginning some time next year.
Section 1322 of the Patient Protection & Affordable Care Act allows the creation of non-profit consumer-operated and -oriented plans (CO-OPs) to sell health insurance to the individual and small-business markets. Although HealthyCT is sponsored by physician organizations, it will be open to health-care practitioners and organizations that wish to work with HealthyCT and meet established criteria, organizers say.
“Physicians and consumers who believe there is a better way to provide health insurance coverage to Connecticut patients are thrilled that we have cleared this major hurdle,” said David S. Katz, MD, president of HealthyCT’s board of directors. “This affirms our conviction that taking on this challenge is the right thing to do for citizens of Connecticut.”
The CO-OP will next seek to fulfill state qualifications for a license to offer health insurance working with the state’s Department of Insurance. Contingent on that approval, HealthyCT would begin issuing insurance in next October.
More information about the group can be found at HealthyCT.org as well as on Facebook.
BRIDGEPORT — Joseph John Tiano, MD, of Fairfield has been appointed medical director of the Cardiac Electrophysiology (EP) Laboratory at St. Vincent’s Medical Center. Tiano is an electrophysiologist specializing in non-surgical electrophysiology procedures to correct cardiac arrhythmias or irregular heart rhythms. On active staff at St. Vincent’s since 2010, Tiano has played a key role in the development of a comprehensive arrhythmia service at St. Vincent’s focusing on an innovative new treatment called “hybrid ablation” to correct atrial fibrillation (A-fib). This treatment combines both surgical and non-surgical techniques to correct complex cases of A-fib.
Tiano recently joined the practice of Cardiology Physicians of Fairfield County, LLC, and was also appointed an assistant professor of cardiology at the Frank H. Netter MD School of Medicine at Quinnipiac University. A graduate of Franklin & Marshall College who earned his MD from Temple University School of Medicine (2003), Tiano is board-certified in internal medicine, cardiovascular medicine and electrophysiology by the American Board of Internal Medicine.
NEW HAVEN — First Niagara was received the 2012 Corporate Partnership Award from the Visiting Nurse Association of South Central Connecticut (VNA/SCC). The award was presented to David Ring, First Niagara’s head of enterprise banking and New England region president, at the VNA/SCC’s 108th annual meeting and community awards ceremony November 14.
“We’re proud of the tangible results that our sponsorship of the VNA/SCC’s programs has had in the community, and the direct impact of each dollar on greater New Haven residents,” said Ring. “As a result of our support for the Subsidized Care Program, the VNA/SCC was able to provide over 150 home-care visits for individuals [who] wouldn’t have otherwise received necessary treatment.”
In 2011, First Niagara donated $20,000 to help the VNA/SCC continue providing care to the uninsured and underinsured in greater New Haven, and sponsored the group’s Nightingale Awards for Nursing gala with a gift of $7,500. This year First Niagara increased its philanthropic support of the VNA/SCC with a $25,000 grant.
NEW HAVEN — Despite persistent federal and state government efforts to tax tobacco use out of existence, the number of smokers in the U.S. has remained stable in recent years, rather than declining. The reason? Genetics.
So says the Yale School of Public Health, where recent research suggests that individuals’ genetics play an important role in whether they respond to tobacco-control policies. The study appears online in the journal PLOS ONE.
Smoking dropped sharply after the Surgeon General’s landmark report on the dangers of tobacco was published in 1964, but rates have plateaued during the past two decades despite increasingly strong-armed government tactics to pressure citizens to quit. The study found biological evidence that may help explain why some people respond to anti-smoking inducements, such as higher taxes and the expansion of clean-air laws, and why others do not.
“We found that for people who are genetically predisposed to tobacco addiction, higher cigarette taxes were not enough to dissuade them from smoking,” said lead researcher Jason M. Fletcher, associate professor in the Department of Health Policy & Management at the Yale School of Public Health.
Tobacco use remains a leading cause of preventable death in the U.S., responsible for more than 400,000 deaths each year, according to the study. Tobacco taxation, meanwhile, has been credited with helping to reduce use by more than 50 percent since the Surgeon General’s report.
HAMDEN — William Kohlhepp of North Haven, associate dean of the School of Health Sciences at Quinnipiac University, has been re-elected to a three-year term as secretary-treasurer of the Physician Assistant Education Association (PAEA), the only national organization representing physician assistant educational programs in the United States. Currently, 168 of the 170 accredited programs in the U.S. are association members. The PAEA provides services for faculty at its member programs, as well as to applicants, students and other stakeholders. Kohlhepp, who also is a professor in the physician assistant program at Quinnipiac, earned his doctorate of health science at Nova Southeastern University. He holds a master of health administration from Quinnipiac and a physician assistant certificate from the University of Medicine and Dentistry of New Jersey.
HARTFORD — Hartford Healthcare has adopted a "universal flu prevention program" that require its employees to get flu shots.
All Hartford Healthcare employees, licensed independent practitioners, volunteers and students were required to get a flu shot by December 1. In addition, Hartford Healthcare vendors/contractors who perform work at any Hartford Healthcare facility for a month or more during flu season also must receive a flu shot.
Medical and religious exemptions are allowed, but staff members with approved exemptions are required to wear surgical masks during flu season when they are within six feet of an area in which they may encounter patients.