Health insurance – TheNewsHub

Senior citizen health cover, term insurance likely to be GST-free

suimt — Sat, 19 Oct 2024 21:58:20 +0000

NEW DELHI: A group of state finance ministers is veering towards GST exemption on term insurance plans, while also considering removal of the levy for senior citizens purchasing health insurance and for those who buy medical coverage of up to Rs 5 lakh.
A second group of ministers (GoM) is looking at ways to minimise revenue loss to the exchequer by increasing the levy to 28% on ‘luxury’ goods such as watches costing more than Rs 25,000 and shoes costing over Rs 15,000, while lowering GST on common-use items such as notebooks (12%), bicycles of less than Rs 10,000, and drinking water sold in 20+ litre containers and aerated water (now at 18%).Shoes that cost more than Rs 1,000 and watches currently face 18% levy, and the high-end versions could see the burden rise to 28%.
Panels mull higher GST slabs for ‘luxury’ items
Footwear costing up to Rs 1,000 attracts 12% GST.
The two ministerial panels — on insurance and rationalisation — headed by Bihar deputy CM Samrat Chaudhary, with state finance ministers representing the entire political spectrum as members, are hoping to garner Rs 22,000 crore through these higher levies. The two group of ministers met in the capital Saturday but are yet to firm up their final recommendations.

More deliberations will be needed before the recommendations are sent to GST Council, a panel led by finance minister Nirmala Sitharaman, to take the final call, one of the state finance ministers said.
With crucial state elections ensuing, the ministers will not decide in a rush and the work being done by a third group of ministers, led by Sitharaman’s deputy Pankaj Chaudhury, on the future roadmap for compensation cess will be taken on board and a comprehensive package will be worked out, given that most states are keen on ensuring that their revenues are not adversely impacted. “Not many items were discussed today. Any decision will require a detailed analysis and consultation,” a state FM said after the rate rationalisation panel met on Saturday.
The group of ministers on insurance received multiple suggestions with some panel members suggesting that GST on health insurance should be completely waived. Tamil Nadu FM Thangam Thennarasu suggested 5% GST but without input tax credit. Currently, insurance policies attract 18% tax, the same as other common use services such as telecom or banking.
Exemption from GST is fraught with the threat of breaking the chain, which will result in suppliers to companies selling life and health insurance getting no tax credits in case the group of ministers decides to recommend an exemption. Given the adverse public opinion, FMs are keen to be seen taking steps to lower tax burden on those purchasing these two insurance policies.
Going forward, the panel on rate rationalisation is also expected to take up the issue of lower levies for certain farm goods and other common use items. One of the issues being discussed is to reduce the number of items in the 12% bracket and going forward remove it altogether to turn GST into a three-tier tax.

GST On Term Life Insurance Premium, Health Coverage For Senior Citizen Likely To Be Exempt

suimt — Sat, 19 Oct 2024 12:55:00 +0000

GST On Health Insurance Premium: The Group of Ministers (GoM) is expected to recommend exempting goods and services tax (GST) on term life insurance premiums and health insurance premiums paid by senior citizens. However, the Official’s premiums paid for health insurance coverage of above Rs 5 lakh will continue to attract 18 per cent GST.

This long-awaited GST exemption or reduction for life and health insurance has been a key demand from the industry, as it would ease the tax burden on both insurers and policyholders.

While most GoM members, led by Bihar Deputy Chief Minister Samrat Chaudhary, advocated for a “full exemption” on premiums for life and health policies, some members suggested lowering the GST rate from the current 18 per cent to 5 per cent.

The ministerial panel, responsible for reviewing the rates, is set to present its recommendations to the GST Council by October 31. The final decision will be made during the next GST Council meeting. Currently, life and health insurance premiums are subject to an 18 per cent GST.

The GST Council addressed this issue during its September meeting, following discussions about the 18 per cent GST on life and health insurance premiums. The panel learnt to have discussed the revenue implication in various options suggested by the Fitment Panel — comprising revenue officials of the Centre and states.

Other options discussed during the GoM meeting included exempting premiums paid by senior citizens and premiums with coverage up to Rs 5 lakh, or alternatively, only exempting premiums paid by senior citizens from the GST ambit.

Last month, the GST Council, headed by Finance Minister Nirmala Sitharaman, set up a GoM on slashing the tax rate on life and health insurance, as well as reducing the GST on cancer drugs.

The 54th GST Council meeting, held on September 9, reached a “broad consensus” to bring relief to individuals and senior citizens with a decision on the GST applied to health insurance premiums. (With IANS Inputs)

Op-ed: The financial toxicity of cancer is growing. Here's what can be done to reduce it

Harsh — Fri, 18 Oct 2024 16:06:02 +0000

Medical personnel use a mammogram to examine a woman’s breast for breast cancer.

Hannibal Hanschke | dpa | Picture Alliance | Getty Images

Cancer drains individuals of their physical, emotional, and financial health. Given the impact on both patients and the people in their lives — including their employer — it’s time that CEOs take note and take action to reduce the burden of cancer.

In a study from the American Cancer Society Cancer Action Network, nearly half of cancer patients and survivors reported being extraordinarily burdened by medical debt. Many respondents carried a negative balance of at least $5,000 from their cancer treatment for more than one year, and 42% of people with cancer deplete their life savings within the first two years after diagnosis.

Financial hardship caused by cancer can also contribute to “financial toxicity,” wherein the cost of treatment forces individuals to make tradeoffs that impact their chances of survival. These may include non-biologic factors such as skipping or halving cancer medications to stretch their supply, or being unable to complete cancer care as planned due to the high costs of transportation to or housing near cancer treatment centers. This model isn’t sustainable, and rising costs of new, life-saving cancer therapies will impose additional financial toxicities — and an increasingly large threat to patients’ lives.

Not only does financial toxicity of cancer care affect the individual, it can also negatively impact their employer. As the providers of health insurance coverage for nearly half the country, employers and unions shoulder much of cancer’s financial burden. Today, cancer is the leading health-care cost for mid- and large-sized organizations in the U.S., and the burden is growing.

For the first time in history, more than 2 million Americans will receive a new cancer diagnosis in 2024. While increasing cancer incidence can be attributed in part to our aging population (cancer risk increases with age), we also see a disturbing national trend in which younger people are being diagnosed with 17 major cancers. These are people who would still likely be in the workforce, using employer-sponsored health insurance. As a result, employers are asking what they can do to reduce the burden of cancer on their populations — and their bottom line.

Patients, families, and employers all “win” when cancers are diagnosed at an early stage. Detecting cancer early not only improves chances of survival, it significantly lowers the cost of care. Overall, treatment costs for someone diagnosed at stage IV — when cancer has spread throughout the body — are an average of $156,000 higher than for those diagnosed at stage I, when the disease is localized. The first year of treatment for colorectal cancer, which affects over 150,000 individuals each year in the United States and is on the rise in younger populations, costs an average of $111,000 when diagnosed at stage I, with about a 90% five-year survival rate. By contrast, stage IV colorectal cancer drives average treatment costs of $256,000 in the first year, and five-year survival rates are under 20%. Evidence suggests that if individuals could only take advantage of the prevention, early detection, and cancer treatment strategies that exist today, the cancer mortality rate would decline by 30% to 50%.

These statistics are profound and strongly suggest that concerted efforts from employers and individuals to encourage cancer prevention and early detection would improve health and reduce health-care costs. Today, our best tool to achieve this is screening. Adherence to recommended screening guidelines — like those published by ACS — could save the U.S. health-care system $26 billion per year in avoided treatment costs.

Despite the importance of early detection and proven value of screening, access to preventive care remains a barrier to better outcomes. At present, a staggering 65% of eligible Americans are out-of-date with recommended cancer screenings. Covid-19 restrictions delayed or prevented 9.4 million cancer screenings in 2020 alone, likely leading to later-stage diagnoses that would have normally been caught earlier.

There are also logistical and societal barriers that contribute to financial toxicities and impact a person’s ability to get screened. People may need to take time off work or arrange childcare to attend a screening appointment. They may need to weigh potential future treatment costs against their need to pay rent. Some may not be aware they’re eligible for screening, and stigma and fear associated with cancer screening hinders some people from seeking care. Inequities according to one’s socioeconomic status — including where they live, their income, education level, access to healthcare and healthy foods, and other social determinants of health — create roadblocks to preventive care. To realize the benefits of early detection on individuals and organizations, it’s important that we develop new strategies to remove these barriers.

American Cancer Society CEO Karen Knudsen

NYSE

ACS is committed to tackling cancer, approaching the challenge of improving access to care and reducing financial toxicity from multiple angles. Similar or supportive action from U.S. employers will increase our collective impact against cancer’s burden.

Toward the goal of increasing early detection, ACS recently partnered with Color Health in a joint venture to improve access to screening and preventive care through employers and unions. By making it easier and more convenient for employees to get care — with at-home testing kits and care navigation support across their cancer journey — this program aims to increase awareness, accessibility, and affordability of cancer screening and early detection. Notably, organizations taking advantage of the ACS-Color program have witnessed a 77% increase in cancer screening adherence.

In addition to direct screening initiatives, programs like Road to Recovery and ACS Hope Lodges remove the cost burdens of transportation and lodging for cancer treatment. Other partnerships through BrightEdge, ACS’s donor-funded innovation and investment arm, provide access to a wide range of solutions that help people navigate the financial complexities of cancer across the continuum of care. One BrightEdge portfolio company, TailorMed, offers a platform to help patients find resources to cover the cost of treatment and reduce out-of-pocket expenses. Further investments aim to bring the patient voice into therapy and diagnostic development, to enable a future generation of sustainable cancer innovations that reduce patients’ financial distress.

Advocacy is also key to reducing financial toxicity. ACS’s Cancer Action Network advocates for Medicaid expansion to help currently uninsured individuals access screening and preventive care. To bring down the cost of prescription drugs, ACS CAN has also successfully advocated for “smoothing,” a policy that allows Medicare beneficiaries to spread out their prescription drug costs over the course of the year. By making payments more manageable for patients, we remove a crucial element of the cancer financial challenge.

Cancer will impact one in two women and one in three men at some point in their lifetime. By facilitating guideline-recommended screening and activating programs that make early detection affordable and accessible, employers can offset financial toxicities and improve outcomes for people across the country. When employers help their employees get screened, they bring us one step closer to ending cancer — and its costs — as we know it.

—By Karen Knudsen, CEO of the American Cancer Society. She is also a member of the CNBC CEO Council.

Embattled Abbott Labs comes through with a strong quarter, buyback announcement

Harsh — Wed, 16 Oct 2024 16:23:28 +0000

Medical device maker Abbott Laboratories on Wednesday delivered better-than-expected quarterly results and upped its earnings guidance for the third straight quarter. Shares rose more than 1%, shaking off an initially subdued reaction. Revenue in the three months ended Sept. 30 rose 4.9% to $10.64 billion, topping estimates of $10.55 billion, according to data provider LSEG. Organic sales, which exclude Covid testing, were up 8.2% from the year-ago period. It’s unclear whether analyst estimates are comparable. Adjusted earnings per share (EPS) of $1.21 beat LSEG expectations by a penny and increased 6.14% on an annual basis. ABT YTD mountain Abbott Labs’ year-to-date stock performance. Abbott shares are extending their period of outperformance versus the market and health-care peers. The stock entered Wednesday’s session up a little more than 10% since the July 26 close — after the closing bell that day, the company was ordered to pay $495 million in damages in a court case over its premature infant formula, which has been a major overhang on the stock since mid-March. That advance is ahead of the S & P 500 , a closely followed health-care exchange-traded fund , which gained 6.5% and 1.9%, respectively, over the same stretch. Bottom line In its third quarter, Abbott Labs demonstrated why we wanted to stick with the stock in the face of legal battles that emerged earlier this year and spooked investors. We’re reiterating our price target of $130 and 2 rating, meaning we’d wait for a pullback before adding to our position. At its lows of 2024 in July, Abbott’s market cap stood at $174.1 billion, roughly $32 billion below where it was in March before its competitor in the premature infant formula market lost a court case and put Abbott’s own case load in the spotlight. We battled the stock in the months that followed, arguing the selling was overblown, especially considering the scientific community backed Abbott’s view that the formulas were medically necessary for premature infants and did not cause an intestinal illness commonly abbreviated as NEC. A trio of U.S. agencies earlier this month threw more support behind use of the formulas . At its highs of Wednesday’s session, Abbott had clawed back all of its market cap losses since March 14. “Abbott really came through,” Jim Cramer said Wednesday. “There’s just a lot to like with the Abbott quarter.” Commentary The place to start is Abbott’s medical devices segment, which saw a roughly 12% increase in revenues to a better-than-expected $4.75 billion, as seen in the chart below. On an organic basis, which strips out the impact of foreign exchange fluctuations and divestitures, medical device sales rose 13.3%. It’s nice when a company’s largest segment by sales is the one with the fastest growth rate — and that’s the case with Abbott. FreeStyle Libre, a continuous glucose monitor (CGM) for people with diabetes, continued its impressive growth in the quarter, with organic sales up 21%, a slight acceleration from the prior three-month period. While Abbott has benefited from the struggles of CGM competitor Dexcom , CEO Robert Ford maintained an upbeat view on the market in the near and long terms. “This is a mass market opportunity that we have,” he said, noting there’s about 10 million CGM users worldwide right now but over 100 million diabetics in developed countries. Abbott and its peers are increasingly targeting CGMs to non-diabetics, hoping that health-conscious people would want to use biosensors to learn about their body’s response to factors like food, stress and exercise. Abbott launched its over-the-counter CGM called Lingo in the U.S. in early September , and Ford said the product is “off to a very good start.” People can purchase a one-sensor pack for $49, two for $89 or six for $249. The two-sensor pack is the most popular version, he said. The sensors last about two weeks, and Ford said he was positively surprised by the reorder rates so far. Abbott has targeted $10 billion in sales of CGMs by 2028, and Lingo represents a “great opportunity” to add to that goal over time, Ford said. Another highlight: Abbott Labs announced its board authorized a new $7 billion share purchase program. Its prior authorization from 2021 was getting low, Ford said. In the third quarter, Abbott bought back $750 million worth of stock, with Ford saying executives believed there was a disconnect between the stock’s valuation and the company’s business fundamentals. Indeed, Abbott usually prioritizes investing in its product pipeline over share repurchases, so the fact that management stepped up its buyback program really shows how they feel about the current stock price. Abbott’s nutrition business — home to brands such as Ensure protein powder and PediaSure drinks for kids — was a weak spot, just as it was in the second quarter. Sales were down about 0.3% year over year to $2.07 billion, short of the $2.17 billion expected by analysts, according to FactSet. On an organic basis, revenue was up 3.4% in the segment. Ford said the international pediatric business was the biggest drag on nutrition in the quarter, blaming that on Abbott’s own “commercial execution” early in the quarter. The company quickly recognized the softness and took steps to fix it, Ford said, including personnel changes followed by inventory adjustments to distributors. Ford said early indications show that Abbott took the right corrective actions and that growth in that division and the segment overall should improve in the current quarter. On the lawsuits, specifically, Ford once again issued a strong defense of the premature infant formula. He said the statement from the three U.S. health agencies — the Food and Drug Administration, Centers for Disease Control and Prevention, and National Institutes of Health — “says a lot.” “It was a very strong statement,” Ford said, though he noted that the judge in an ongoing trial in Missouri has yet to allow it to be submitted as evidence in the case. He said he expects that in future cases, the statement and an accompanying report on NEC and formulas will be included as evidence for juries to consider. Abbott’s recent stock performance suggests investors are getting more comfortable with the litigation risk, but it’s still too early to declare complete victory. That’s why we’re generally holding off on adding to our position. Nevertheless, there’s little doubt about the strength of Abbott’s underlying fundamentals. In due time that should occupy more and more of the spotlight. Abbott Laboratories Why we own it : Abbott is a high-quality medtech company growing at a fast clip. The stock has been dealing with two overhangs: falling Covid testing sales and concerns that GLP-1 adoption will disrupt its leading continuous glucose monitor. As Abbott’s organic sales growth continues to shine, the market will realize both concerns are overblown. Competitors : Dexcom and Edwards Lifesciences Weight in Club portfolio : 2.89% Most recent buy : 5/29/2024 Initiated : Jan. 29, 2024 Guidance Abbott Labs now projects adjusted EPS in the range of $4.64 to $4.70, which at the midpoint is up a penny versus its prior guidance of $4.61 to $4.71. It’s the third consecutive quarter that Abbott has upped the middle of its EPS forecast. The company reiterated its full-year organic sales growth outlook of 9.5% to 10%. (Jim Cramer’s Charitable Trust is long ABT. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Attendees walk by the Abbott booth during CES 2024 at the Las Vegas Convention Center on January 10, 2024 in Las Vegas, Nevada.

Ethan Miller | Getty Images

Health-care costs hit a post-pandemic high. These moves during open enrollment can help

Harsh — Mon, 14 Oct 2024 17:03:55 +0000

About 165 million Americans get their health insurance through work, and yet most don’t spend much time considering what their employer is offering in the way of benefits and what it will cost.

In fact, employees only spent about 45 minutes a year, on average, deciding which benefit options suit them best, a report from Aon found.

Open enrollment season, which typically runs through early December, is an opportunity to take a closer look at what’s at stake.

And, for starters, costs are going way up.

post-pandemic high, according to WTW, a consulting firm formerly known as Willis Towers Watson. U.S. employers project their health-care costs will increase by 7.7% in 2025, compared with 6.9% in 2024 and 6.5% in 2023, the firm said.

Because of higher costs, employers are considering new ways to adjust their plan offerings, WTW found.

To that point, 52% of companies said they plan to implement programs that will reduce total costs, and just as many intend to steer to lower-cost providers and sites of care, which may mean a narrower network of doctors from which to choose.

Currently, employers subsidize about 81% of health-care plan costs, on average, while employees pay the remainder, according to professional services firm Aon.

However, some of the higher costs will also inevitably get passed on to employees.

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Roughly one-third, or 34%, of employers expect to shift some of the expense to employees through higher premiums or by raising co-pays on high-deductible health plans in the year ahead, the WTW report found.

The cost per employee is expected to jump 5.8% on average in 2025, marking the third consecutive year of health benefit cost increases above 5%, after a decade of averaging only around 3%, according to a separate report by consulting firm Mercer.

“These are changes employees will feel,” said Beth Umland, Mercer’s research director of health and benefits.

For workers, health-care expenses are already high: Family premiums for employer-sponsored health insurance rose 7% this year to an average of $25,572, KFF’s 2024 benchmark employer health survey found. Workers are responsible for more than $6,200 of that amount, while employers pick up the rest.

“With cost increases reaching a post-pandemic high, companies are concerned about the burden it’s putting on their workforces, especially since it affects decisions about insurance coverage and care,” Tim Stawicki, WTW’s chief actuary of health and benefits, said in a statement.

health savings account, or HSA, which can help with additional health-care costs.

To be able to use an HSA, you must have an eligible high-deductible health plan. The IRS defines “high-deductible” as at least $1,650 for self-only plans or $3,300 for family coverage for 2025.

The IRS also determines the maximum allowed contribution each year: The new HSA contribution limit for 2025 will be $4,300 for individuals, up from $4,150 in 2024, and $8,550 for families, up from $8,300 in 2024. Employees 55 or older can make an additional $1,000 catch-up contribution over the IRS annual limits.

HSA contributions then grow on a tax-free basis, and the funds can cover out-of-pocket expenses, including doctor visits and prescription drugs, including expensive weight-loss medications.

As costs continue to go up, HSAs are a key safety net for managing these out-of-pocket expenses, WTW’s Ihrke said. Any money you don’t use can be rolled over year to year.

“Make sure you are considering how to put some money into that savings account so you can use it to pay for a doctor’s bill or save it for future years,” Ihrke explained.

policy, a move many advisors recommend.

Gallagher.

“More so than ever we are seeing employers looking to address the broadening needs in their workforce,” said Tom Kelly, principal in the Gallagher health and benefits practice, and “today’s employees are looking for more holistic wellbeing support.”

Ozempic is driving up the cost of your health care, whether you can get your hands on it or not

Harsh — Fri, 11 Oct 2024 15:45:20 +0000

About 165 million Americans rely on employer-sponsored health insurance, and yet workers may still not get the coverage they want — particularly when it comes to drugs such as Novo Nordisk’s weight-loss drug Wegovy and diabetes drug Ozempic.

About 1 in 3 employees are looking for more resources to combat obesity, according to a recent report by consulting firm Gallagher. Glucagon-like peptide-1 treatments such as Wegovy and Ozempic, which mimic hormones produced in the gut to suppress a person’s appetite, are considered game changers on this front.

These blockbuster weight-loss drugs have skyrocketed in popularity in the U.S. but are still not universally covered — even though “Americans have higher rates of obesity and diabetes and more behavioral health conditions today than ever before,” according to Trilliant Health’s “2024 Trends Shaping the Health Economy” report.

Cost is a key issue.

Although research shows that obesity drugs may have significant health benefits beyond shedding unwanted pounds, organizations representing U.S. insurers have said concerns remain about the high price involved in covering those medications, which are nearly $1,350 per month for a single patient.

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The price tag for GLP-1 medications, along with the large number of workers who could potentially benefit from using them, are a big driver of higher health-care costs, several studies show. Already, prescription drug costs jumped 8.6% last year, due in part to a surge in the use of GLP-1 drugs, according to a recent report by Mercer.

“Is that significant? Yes,” said Sunit Patel, Mercer’s U.S. chief health actuary.

Patients on these medications need to complete months, if not years, of continuous treatment.

“It becomes a lifelong drug,” said Gary Kushner, chair and president of Kushner & Company, a benefits design and management company. “That’s a pretty expensive commitment.”

expensive weight-loss drugs to some extent. Another 27% are considering adding coverage in the year ahead, according to the survey by Mercer.

Still, “not everyone who wants it can get it,” Patel said.

On the flip side, 3% of employers have recently removed coverage for these drugs and 10% of companies that currently cover them are considering removing them for 2025.

To improve access to weight-loss drugs, many businesses would have to pay even more — and health-care costs are already reaching a post-pandemic high, with employers and employees set to shell out significantly more for coverage in 2025, according to WTW, a consulting firm formerly known as Willis Towers Watson. U.S. employers project their health-care costs will increase by 7.7% in 2025, compared with 6.9% in 2024 and 6.5% in 2023.

Among employers’ greatest concerns was how to cover increasingly sought-after weight loss drugs, a Kaiser Family Foundation survey also found.

“Employers face the challenge of integrating these potentially important treatments into their already costly benefit plans,” Gary Claxton, KFF’s vice president said in a press statement.

Packages of weight loss drugs Wegovy, Ozempic and Mounjaro.

Picture Alliance | Getty Images

FDA-approved for the treatment of Type 2 diabetes.

“Most employers cover Ozempic for diabetes, they don’t necessarily cover it as an anti-obesity medication,” said Seth Friedman, pharmacy and health plans practice leader at Gallagher.

That makes it even trickier for employees to navigate whether they can get access to the drug and if it will be covered by their insurance. “They see that it’s covered but they get rejected,” Friedman said.

A 2023 survey by the International Foundation of Employee Benefit Plans found that 76% of the companies polled provided GLP-1 drug coverage for diabetes, versus only 27% that provided coverage for weight loss — leaving many workers shut out.

“Obviously, there is demand for them, and it’s not for diabetes, it’s for weight loss,” said Kushner.

“Looking ahead to 2025, about half of large employers will cover the drugs for weight loss,” said Beth Umland, Mercer’s research director of health and benefits. However, “even when they do, there are guardrails around who can use it.”

Demand for these treatments is only expected to increase — but the added controls for coverage are also helping to keep costs in check.

Nearly all employers have some sort of “utilization management” restrictions in place, such as a prior authorization requirement, according to Gallagher’s Friedman.

For some companies, that may mean workers must try other weight-loss methods first or meet with a dietitian and enroll in a weight-loss management program. Others may require a threshold for body mass index, or BMI, of at least 30, depending on how the plan is set up, Friedman said.

This information is available during open enrollment, which typically runs through early December.

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GST Panel Deliberates On Lowering Rate On Health Insurance, Tractors

suimt — Fri, 04 Oct 2024 15:56:00 +0000

New Delhi: As the government focuses on GST 2.0 which further eases tax laws, enhance tax simplification and adoption of technology, the ministerial panel tasked to rationalise rates is deliberating on lowering GST on essential items like health insurance and tractors up to 5 per cent.

As tractor segment volumes saw marginal growth (year-on-year) in September, a reduction in GST on tractors will offset the revenue loss, according to industry experts. Tractors currently attract 12-28 per cent GST, depending on their classification.

Similarly, a cut in GST on health and term insurance – a long-pending demand of the sector — will further make them more affordable for the masses. As per experts, health insurance is likely to see a decrease from 18 per cent to 12 per cent, while term insurance may attract a GST of 5 per cent.

According to reports, the panel, chaired by Bihar Deputy Chief Minister Samrat Chaudhary, is focused on moving certain items from the 12 per cent slab to 5 per cent. The panel is expected to meet on October 19 over the insurance issue, followed by discussions on rate rationalisation on October 20.

Last month, the GST Council, headed by Finance Minister Nirmala Sitharaman, set up a Group of Ministers (GoM) on slashing the tax rate on life and health insurance, as well as reducing the GST on cancer drugs.

The GoM on life and health insurance is headed by Choudhary, who is currently heading the panel on GST rate rationalisation. The 54th GST Council meeting, held on September 9, reached a “broad consensus” to bring relief to individuals and senior citizens with a decision on the GST applied to health insurance premiums. The current GST rate on health and life insurance policies stands at 18 per cent.

However, the GST Council announced to reduce the rate on cancer drugs to 5 per cent from 12 per cent. The life and health insurance industry is hopeful that the reduction would alleviate the tax burden on both insurers and policyholders.

CVS is working with advisors on strategic review, sources say

Harsh — Mon, 30 Sep 2024 23:59:20 +0000

CVS Pharmacy logo is seen in Washington DC, United States on July 9, 2024.

Jakub Porzycki | Nurphoto | Getty Images

CVS Health‘s board has engaged advisors to conduct a strategic review of its business, according to people familiar with the matter, as the company contends with potential activist pressure and a severely depressed stock price.

The review has been ongoing for some time, said the people, but there is no certainty on what actions, if any, the company will take.

CVS management, including CEO Karen Lynch, met with major shareholder Glenview Capital Monday to discuss the company’s lagging prospects and Glenview’s plans to revive the stock, CNBC previously reported.

But Lynch has to contend with an insurance business hammered by heightened medical costs.

In a statement, CVS spokesman David Whitrap told CNBC: “CVS Health’s management team and Board of Directors are continually exploring ways to create shareholder value. We remain focused on driving performance and delivering high quality healthcare products and services enabled by our unmatched scale and integrated model.”

The company has also grappled with leadership turnover. Lynch assumed direct leadership of CVS’s insurance unit earlier this year, displacing then-president Brian Kane.

CVS shares rose around 2.5% in after-hours trading Monday on the news, which was first reported by Reuters.

— CNBC’s Bertha Coombs contributed to this story

Major CVS shareholder plans activist push, will meet with management, sources say

Harsh — Mon, 30 Sep 2024 20:20:37 +0000

Glenview Capital, a major CVS Health shareholder, is expected to meet with company leadership on Monday to lay out proposed fixes for the struggling business, according to people familiar with the matter, a potential precursor to an activist push.

The hedge fund has established a sizable position in the company, said some of the people. Glenview invests in a variety of sectors, but its most recent regulatory filings show it holds positions in Centene, CVS and Teva Pharmaceuticals among other names.

Specifics about Glenview’s proposals could not be learned. The Wall Street Journal first reported that Glenview would be meeting with CVS management, including CEO Karen Lynch.

A CVS spokesperson said the company “maintains a regular dialogue with the investment community as part of our robust shareholder and analyst engagement program.”

“Beyond that, we cannot comment on engagement with specific firms or individuals,” the spokesperson said.”

Shares of CVS closed about 2% higher on Monday. Before Monday’s open, the stock was down about 22% year-to-date.

The meeting with Glenview is not CVS’ first brush with an activist. Earlier this year, Sachem Head Capital Management, the well-known activist fund run by Scott Ferguson, disclosed via regulatory filings that it had amassed a position in the company.

Jeff Smith’s Starboard Value also built a stake in the company in 2019, and engaged in discussion with the company’s leadership as well.

Investor confidence in CVS has soured after three straight quarters of full-year guidance cuts.

The company’s bottom line is getting battered by higher medical costs in its insurance segment – an issue dogging the broader health-care industry as more seniors undergo procedures they had delayed during the Covid-19 pandemic.

CVS owns Aetna, the nation’s third-largest health insurer by market share, according to The American Medical Association. The company’s insurance unit includes plans by Aetna for the Affordable Care Act, Medicare Advantage and Medicaid, along with dental and vision.

In its second-quarter results in August, CVS unveiled a new plan to cut $2 billion in expenses over several years, which it said would involve streamlining operations and increasing the use of artificial intelligence, among other efforts. The company is also wrapping up a three-year plan to close 900 of its stores, with 851 locations closed as of August.

CVS is slashing less than 1% of its workforce, or roughly 2,900 jobs, as part of the new cost-cutting plan, a company spokesperson said in a statement on Monday. The spokesperson said the cuts would mainly impact corporate roles, not workers in the company’s retail stores, pharmacies and distribution centers.

The majority of impacted workers will be notified this week and will receive severance pay and other benefits, according to the spokesperson. Apart from layoffs, CVS has closed some job openings, they said.

“Our industry faces continued disruption, regulatory pressures, and evolving consumer needs and expectations, so it is critical that we remain competitive and operate at peak performance,” the spokesperson told CNBC.

The Wall Street Journal first reported the cuts on Monday.

Also in August, CVS announced a leadership shakeup based on the performance and outlook of its insurance unit. The company said CEO Lynch would replace the president of the segment, Brian Kane, effective immediately.

Meanwhile, CVS faces increased pressure in its retail pharmacy business. Reimbursement rates for prescription drugs have plunged over the last several years, while inflation and softer consumer spending are making it difficult for CVS locations to turn a profit at the front of the store.

Pesky medical bill? Many people don't take a key step to manage that debt, study finds

Harsh — Fri, 20 Sep 2024 16:39:19 +0000

Consumers may feel their medical bills are unyielding, inflexible, set in stone. But that’s not always true: A new study shows patients can often reap financial benefits by disputing charges that seem erroneous or by negotiating for financial relief.

Of consumers who don’t reach out to question a medical bill, 86% said it’s because they didn’t think it would make a difference — but “the experiences of those who did reach out provide evidence to the contrary,” according to a new University of Southern California study.

About 26% of people who called because they disagreed with a charge or couldn’t afford to pay it got their medical bill corrected after the outreach, according to the study, published in August. Roughly 15% got a price reduction, 8% got financial assistance and 7% saw their bills canceled outright.

“Of the people who did reach out, most of them got some recourse through self-advocacy,” said report co-author Erin Duffy, a research scientist at the USC Schaeffer Center for Health Policy and Economics.

Researchers polled 1,135 U.S. adults from Aug. 14 to Oct. 14, 2023.

About 1 out of 5 respondents reported receiving a medical bill with which they disagreed or could not afford within the prior 12 months. About 62% of them contacted the billing office to address the concern.

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“If you can’t afford to pay something, or [if a bill] doesn’t seem right or match what your care experience was, you should call and ask questions about that,” Duffy said.

Savings can extend into the hundreds or even thousands of dollars, depending on factors like a patient’s health insurance and the type of medical visit or procedure, said Carolyn McClanahan, a physician and certified financial planner based in Jacksonville, Florida.

analysis of medical bills for adults age 65 and older found that patients “face a complex billing system with a high likelihood of errors and inaccurate bills.” Often, inaccurate bills result from erroneous insurance claims and occur more frequently among consumers with multiple sources of insurance, the CFPB said.

Common errors included missing or invalid claim data, authorization and precertification issues, missing medical documentation, incorrect billing codes, and untimely filing of claims, the report found. Such mistakes contributed to the “rejection of claims that would otherwise be paid,” it said.

“[Bills] go all over the place,” said McClanahan, founder of Life Planning Partners and a member of CNBC’s Advisor Council. “And there’s no transparency or rhyme or reason for how [providers] decide to charge.”

Doing nothing and avoiding payment of medical bills is likely not a good course of action: It could have negative financial consequences, such as late fees and interest, debt collection, lawsuits, garnishments, and lower credit scores, according to a separate CFPB resource.

“If something seems egregious, question it,” McClanahan said.

request an itemized bill from the provider or hospital, and look for errors or duplicate charges, according to PatientRightsAdvocate.org. Research the fair market price for a service and use that information to negotiate, the nonprofit group said.

If something seems egregious, question it.

Carolyn McClanahan

physician and certified financial planner based in Jacksonville, Florida

The phone number for your medical provider’s accounting or billing office will be on your billing statement, the CFPB said.

Here are three other questions to consider asking about your itemized bill, according to the regulator:

Do charges reflect the services you received?

If you have insurance, do the bills reflect the payment by your insurance and reflect what the provider understood would be covered?

Do any of the charges indicate a service was “out-of-network” when it wasn’t?

When calling a provider about a medical bill, keep a journal about the communication, McClanahan said. Write people’s names and what was discussed, and get a commitment of when you’ll hear back.

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