The National Business Group on Health has released six trends for 2017, in response to past trends and growing concern about the Affordable Care Act’s potential repeal.
With just days into the New Year and two weeks until the presidential inauguration, uncertainty over the future of the Affordable Care Act (ACA) is growing. In response, the National Business Group on Health (NBGH) has released a list of six health care benefit trends to keep an eye on in 2017, catered to corporate human resources and finance executives.
The non-profit association, which holds 420 large U.S. employers, questions the fate of the ACA, pharmacy pricing and proposed health plan mergers, among others.
The first trend asks if 2017 will see the ACA being repealed and replaced under the Trump administration. While the association notes how public exchanges have experienced heightened average premium surges and less insurance options, a repeal of the ACA may result with insurers leaving the exchanges to evade being the ‘last man standing,’ according to NBGH. Since the group believes tax on employer plans; employer mandate; and reporting and administrative requirements should be ceased, there will be close monitoring on its repeal.
Furthermore, the second trend raises questions on President-elect Trump’s appointment of Representative Tom Price (R-Georgia) as secretary of the Department of Health and Human Services (HHS), and whether different payment options to the present fee-for-service system will continue to be prioritized. The association emphasizes the public- and private-sector’s need to turn to value-based payments in order to transform health care delivery; and mentions how a repeal of the ACA and changes in accessibility without delivery reformation will not address existing high costs or long-term affordability of health care.
“We’re seeing an increased focus on opportunities looking to positively impact health care delivery,” says Steve Wojcik, vice president of Public Policy at NBGH. “Focusing on the delivery side, whether it’s expanding centers of excellence, looking at accountable care organizations, primary care medical home, offering telehealth, and offering tools to help employees shop for more effective, more efficient providers when they do need a service.”
On the fate of proposed plan mergers for 2017, such as Aetna/Humana and Anthem/Cigna, NBGH weighs arguments pro and con for the partnerships in the third trend. According to the association, arguments for the merges include greater influence in negotiating with providers; accelerating the move to alternative payment models; and reducing overall costs. However, those against the merge argue this would result in a gradual change and innovation prevention.
Due to increased prices on generic, compound, brand, and specialty medications, the fourth trend focuses on advanced risk-sharing and value-based pricing models in 2017 for pharmaceuticals. NBGH mentions that while only 2% of the population consumes specialty drugs, expenditures continue to surge the fastest in health care spending, making specialty medication the top driver of overall health care costs for many employers. The association describes the current pricing model as “antiquated,” “unsustainable,” and “unaffordable,” and has stated how politicians and the public have criticized the model.
“There’s more aggressive utilization management and other changes establishing specialty pharmacy tiers to make sure plans are spending on specialty pharmacy medications as wisely as possible, for people that need it, as opposed to possibly trying to control the waste and unnecessary use for these very expensive medications,” says Wojcik.
Support services for consumer engagement and rising employer interest in workforce well-being cover trends five and six, both stepping in among the aims for 2017.
Beaumont
Capital Management Launches Smart Beta Solutions
Beaumont Capital Management (BCM) has launched two new smart
beta solutions. The BCM Paradigm Series includes BCM Paradigm Tactical Fixed
Income and BCM Paradigm Tactical Factor Selection, which have inception dates
of October 1, 2015, and June 1, 2015, respectively. The Paradigm process seeks
risk-adjusted returns and downside protection through rules-based analysis of
investor behavior by identifying shifts between normal and volatile markets,
the firm explains. The Paradigm Series broadens the range of BCM’s offerings
and provides new solutions to meet the challenges of evolving markets and the
demands of today’s investors.
“Lots of smart beta, or factor-based ETFs [exchange-traded
funds], have been launched recently, but few strategies, in our opinion, seek
to use these products in a constructive way,” says Eric Biegeleisen, BCM’s director
of Quantitative Research and portfolio manager of the Paradigm strategies. “With
Paradigm, we are striving to use smart beta to pursue alpha.”
Through the Paradigm investment process, ETFs are examined
for their relative and absolute levels of volatility and then categorized as
either ‘normal’ or ‘volatile’. The normal candidates are then allocated based
upon their relative attractiveness, which leads to the construction of a
portfolio seeking positive returns, while minimizing volatility and drawdown,
BCM notes. The strategies’ quantitative models analyze each ETF for inclusion
in the portfolio daily and rebalances typically occur weekly.
“Based upon the continued flows to smart beta, it is clear
that investors today find significant value in the benefits offered by smart
beta products, particularly those that seek to provide downside protection,”
says Biegeleisen. “The Paradigm investment thesis is designed with minimizing
portfolio drawdowns as its primary objective. This ultimately allows the strategies to ideally deliver alpha that
investors need for long-term financial planning and portfolio growth. We
believe the best investment processes include a good defense.”
NEXT: Charles
Schwab Expands ETF OneSource Series with OppenheimerFunds
Charles Schwab Expands ETF OneSource Series with
OppenheimerFunds
Charles Schwab announced
it will add exchange-traded funds (ETFs) provider OppenheimerFunds and 12 new
ETFs to its lineup of the Schwab ETF OneSource series.
The program now
allows investors and advisers to buy and sell 228 ETFs covering 69 Morningstar
Categories with $0 online commissions, no enrollment requirements, and no early
redemption fees.
Today, four of
the Oppenheimer Revenue Weighted ETF strategies are available to Schwab clients
with $0 online trade commissions. The new funds include the the Guggenheim BulletShares 2024 High Yield
Corp Bond ETF. For a full list, visit Schwab.com.
OppenheimerFunds
joins fifteen other ETF providers that participate in the Schwab ETF OneSource
program. They include ALPS, Deutsche Asset Management, Direxion, ETF
Securities, Global X Funds, Guggenheim Investments, IndexIQ, John Hancock
Investments, J.P. Morgan Asset Management, PIMCO, PowerShares, State Street
SPDR ETFs, USCF, WisdomTree and Charles Schwab Investment Management.
“Schwab ETF
OneSource is growing in every way – we’ve added to both our provider and fund
ranks in the last year, and continue to offer investors of all sizes the most
choice when it comes to commission-free ETFs,” says Heather Fischer, vice president
of ETF Platform Management at Charles Schwab. “Our research indicates that
investors and advisers are steadily allocating more of their portfolios to
ETFs, and a broad selection of both ETF categories and ETF providers are
critical criteria when evaluating ETFs that are available for zero commission
online. Schwab ETF OneSource delivers on both, which explains the traction
we’ve achieved in just four short years since launching the program.”
NEXT: New
York Life Acquires Stake in Credit Value Partners
New York Life
Acquires Stake in Credit Value Partners
New York Life Investments has announced the signing of an
agreement to acquire majority stake in Credit Value Partners (CVP), a boutique
specializing in opportunistic and distressed debt, as well as high-yield
corporate credit investing capabilities.
The addition of CVP represents another step in New York Life
Investments' effort to offer a broad range of alternative investment solutions
that now include private equity, mezzanine, equity co-investing, middle market
lending, real estate, hedged strategies and real assets. These strategies are
managed by New York Life Investments and its boutiques, which include Candriam
Investors Group, Cornerstone Capital, GoldPoint Partners, IndexIQ, MacKay
Shields and Private Advisors.
"CVP is a valuable opportunity to expand our
alternatives offerings,” explains Yie-Hsin Hung, chief executive officer at
New York Life Investment Management. “The capabilities of CVP's veteran team
align with the income generation needs and total return profile of our investor
base. With a range of products and capabilities presenting attractive credit
opportunities across market cycles, CVP is well positioned to apply its credit
expertise to delivering strong risk-adjusted returns for clients."
The acquisition, which is subject to customary closing
conditions, is expected to close in the first quarter of 2017. Terms of the
transaction were not disclosed.
NEXT: Deutsche Asset Management Releases New ETFs Through
Schwab’s OneSource
Deutsche
Asset Management Releases New ETFS Through Schwab’s OneSource
Deutsche Asset Management will release two additional
Deutsche X-trackers exchange-traded funds (ETFs) on Schwab ETF OneSource, the
firm’s program which offers investors and advisers commission-free ETFs. Schwab
clients can now buy and sell the Deutsche X-Trackers FTSE Developed ex US
Comprehensive Factor ETF, and the Deutsche X-Trackers Russell 1000 Comprehensive
Factor ETF.
“We are excited to be able to offer two
more Deutsche X-trackers funds on Schwab ETF OneSource,” says Fiona Bassett, head of
Passive Asset Management in the Americas. “As part of the
program, investors now have greater access to two of our comprehensive factor
ETFs, which are intended to serve as core portfolio allocations as well as
alternatives to traditional market cap weighted domestic and international
index products.”
Schwab
says its ETF OneSource offers investors and advisers access to the greatest number of
commission-free ETFs anywhere in the industry. Commission-free online trading
is available to individual
investors at Schwab; to approximately 7,000 independent investment advisers
who use Schwab’s custodial services; and through Schwab retirement accounts that permit
trading of ETFs.
NEXT: Vanguard
Adds 2065 TDF for Youngest Investors
Vanguard Adds 2065
TDF for Youngest Investors
The Vanguard Target Retirement 2065 Fund will offer the
youngest Millennial investors a
diversified target-date fund (TDF) option to begin saving for retirement as
they enter the workforce.
Vanguard says its Target Retirement Funds (TRFs) provide a
professionally-managed portfolio comprising broadly-diversified, low-cost Vanguard
index funds that aim for diversification, inflation protection, risk control,
and growth potential. The firm’s investment experts combine behavioral research
and capital markets data to create a glide path strategy that automatically rebalances
risk within the portfolio as an investor gets closer to retirement by
incrementally decreasing exposure to equities and increasing exposure to
fixed-income investments.
The 2065 option will be available to individual investors
with a $1,000 minimum initial investment, and to institutional investors with a
$100 million minimum investment. Vanguard says both funds are expected to carry
industry-leading low expense ratios of approximately 0.16% and 0.10%,
respectively.
“As DC plans evolved over the past 30 years, it became clear that many workers
often lack the time, willingness, or ability to be their own investment manager,”
explains Martha King, managing director of Vanguard’s Institutional Investor
Group. “Moreover, retirement savers need guidance on asset allocation in an
increasingly challenging and complex market environment. Our research has shown that TRFs have dramatically reduced
extreme allocations—either too much cash or too much stock—that can expose
investors to undue risk.”
The new 2065 Funds are expected to launch at the beginning of the third quarter
in 2017. For more information about the fund, visit Vanguard.com.
NEXT: Pacific Funds Cuts Fees on Fixed Income
Funds
Pacific
Funds Cuts Fees on Fixed Income Funds
Pacific Funds has announced a reduction
in net operating expenses for its fixed-income funds. These investment vehicles
include Pacific Funds Short Duration Income, Pacific Funds Core Income, Pacific
FundsStrategic Income, Pacific Funds Floating Rate Income, Pacific
Funds Limited Duration High Income, and Pacific Funds High Income. All are
managed by Pacific Asset Management and focus on corporate income
opportunities.
“Expenses are never the sole reason for
selecting a mutual fund, but they are an important consideration when comparing
funds that have similar attributes,” explains Chris van Mierlo, chief marketing
officer and senior vice president of sales for Pacific Life Insurance Company's
Retirement Solutions Division. “With these new reductions, we believe our funds
are now an even more appealing option for meeting an investor’s fixed-income
needs in a variety of market conditions.”
More details about the fixed‐income
options of Pacific Funds, and a list of all Pacific Funds offerings can be
found at PacificFunds.com.