Correction appended at 1:30 p.m. Monday.

Welcome to the April 11 Monday Business Briefing, your private business intelligence digest from Insider Louisville.

Study: Obamacare customers cost 19 percent more than prior patients

The Blue Cross Blue Shield Association (BCBSA) said that individual customers gained after the implementation of the Affordable Care Act were 19 percent more expensive than patients who had signed up before the ACA, aka Obamacare.

BCBSA’s new report reinforces insurers’ claims that many of the customers who enrolled through federal and state ACA exchanges have cost more than the companies received through insurance premiums.

Humana HQ by nightLouisville-based Humana said in February that sicker-than-expected Obamacare customers contributed to a fourth-quarter earnings decline of 30 percent.

BCBSA said the ACA enabled many people who previously lacked coverage to purchase insurance. Many of the new customers also needed immediate care, which meant they cost the insurers more than previous customers.

“In addition, many individuals with significant medical conditions had previously been covered through state-based ‘high-risk’ pools, and these people also transitioned into individual coverage,” BCBSA said.

The insurance giant said in the report that it is in a unique position to gauge the impact of the new insurance customers: Blue Cross Blue Shield (BCBS) companies “have participated in the new ACA marketplaces more broadly than any other insurance carrier. As a result, millions of newly enrolled BCBS members are the largest single group of individuals whose health status and use of medical services can be examined for key insights into the medical needs and costs associated with providing care for the new individual market enrollees.”

The association’s analysis showed that new customers who purchased individual health plans in the last two years:

  • Have higher rates of some diseases, including diabetes, depression and coronary artery disease.
  • Received “significantly more” medical services in the first year of coverage than consumers who purchased plans before 2014.
  • Saw more frequent admissions to hospitals and emergency rooms.
  • Incurred medical costs that, on average, were 19 percent higher than employer-based group members in 2014, and 22 percent higher in 2015. Last year, individual enrollees incurred an average monthly medical expense of $559, compared to $457 for consumers who got Anthem’s insurance through their employer.
A new Anthem report indicates that Obamacare patients are sicker than customers the insurer gained before the Affordable Care Act. | Screenshot from Anthem's report.
A new report indicates that Obamacare patients gained in the last two years are sicker than individual customers the insurer enrolled before the Affordable Care Act. | Screenshot from BCBSA report.

BCBSA said the analysis was based on data from 4.7 million individual members and about 25 million employer-based group members.

The association said the data “underscores the need for health insurers, medical professionals and newly insured consumers to … ensure that individuals (use) their benefits … to improve their health and well-being.”

Humana and other insurers have threatened to withdraw their insurance plans from the exchanges, but those threats, much like Anthem’s report, may also be intended to put pressure on legislators to tweak the Affordable Care Act more in the insurers’ favor. —Boris Ladwig

Tea shop opening in former Bardstown Road juice bar

Emily Gibson, left, and Margaret Hamilton are co-owners of Wild Dog Rose. | Photo by Caitlin Bowling
Emily Gibson, left, and Margaret Hamilton are co-owners of Wild Dog Rose. | Photo by Caitlin Bowling

Louisville is teeming with coffee shops — Sunergos Coffee, Heine Bros. Coffee, Good Folks Coffee, Starbucks, etc. — but there’s not much in the way of tea.

The coffee shops offer tea, but that offering is secondary to coffee and espresso drinks.

“We’d like to be the catalyst for the tea culture” in Louisville, said Margaret Hamilton.

Hamilton and friend Emily Gibson co-own Wild Dog Rose, a tea and book shop opening in May at 1570 Bardstown Road.

In addition to 81 teas, Wild Dog Rose will stock crystals, more than 20 essential oils, carrier oils, essential oil cleaning products and an “endless” amount of books. They also will sell baked goods such as scones, tea-infused truffles and muffins from Sweet502.

“There is a common denominator of it all being natural,” Gibson said.

Gibson and Hamilton are repainting the roughly 800-square-foot store, formerly a LIFEBar juice bar, adding in shelving for their goods, and creating a wall of teas, where customers can spend time looking at and smelling the different tea varieties. Each tea also will have information about its health benefits such as migraine and stress relief.

Customer can buy in bulk or order a cup to go. Customers also can mix and match multiple teas to create their own special blend. “We really like the idea of being able to personalize,” Hamilton said.

Wild Dog Rose will buy its loose leaf teas from Danville, Ky.-based Elmwood Inn Fine Teas, where they took a class to learn more about the variety of teas, their health benefits and how they should be prepared.

“We just had a love of tea and not a lot of knowledge,” Hamilton said.

“It’s a never-ending learning experience,” Gibson added.

The first-time entrepreneurs both previously worked at Heine Bros. and Vint and had a strong love of tea. After talking about opening a tea shop for a while, “We were just like ‘Why can’t we do this?'” Hamilton said.

They started reading up on teas and looking for a space. Gibson, who is a stylist at J. Michael’s Spa & Salon, found out about the Bardstown Road space from a fellow stylist who cuts Chase Barmore’s hair. Barmore founded LIFEBar and was looking for a tenant to fill the empty space.

“We were taking baby steps, and then it became a real thing,” Gibson said. “It was a whirlwind.” —Caitlin Bowling

Boutique coming to Westport Village Friday

Darling State of Mind's logo | Courtesy of Facebook

Westport Road shopping center Westport Village has its first new tenant since Artesano Vino Tapas y Mas opened in October.

Darling State of Mind, a clothing and gift boutique, will host a grand opening celebration April 15-17, according to a news release. The shop is located in Suite 135 next to Avanti Skin Center of Louisville.

The store will sell accessories, home décor, Bourbon & Boweties bangles, candles, soaps and clothes.

To celebrate its opening, Darling State of Mind will offer 10 percent to 40 percent discounts on its inventory. All three days, it also will offer customers a chance to win a $50 gift card and the grand prize basket, which includes a $100 gift card and items from the boutique.

People can get a sneak peek at Darling State of Mind on April 14 when the store hosts its first Kentucky Derby event, featuring a selection of Derby hats, fascinators, dresses and jewelry.

Hours of operation are 10 a.m. to 5 p.m. Sunday, 10 a.m. to 6 p.m. Monday through Thursday, and 10 a.m. to 7 p.m. Friday and Saturday. —Caitlin Bowling

Doe-Anderson’s Ed Prentiss heads to England to compete in World Cup … of Dodgeball

edWe’re not sure which is stranger — the fact that Doe-Anderson‘s vice president and executive creative director Ed Prentiss is headed to England to compete in the inaugural World Cup of Dodgeball, or that there is such a thing as the World Cup of Dodgeball. But you read that right — dodgeball fanatic Prentiss is headed to Manchester, England, to compete with Team USA in the World Cup, which takes place Saturday, April 16.

Team USA is one of eight teams qualified to compete in the two-day event that includes both men’s and women’s teams. It’ll be held every two years. Prentiss started the National Dodgeball League in 2003 and is the official U.S. representative on the World Dodgeball Association Council. This is clearly more than just a hobby, people.

We wish Prentiss good luck dodging all those balls across the pond. Go bring the title of “Dodgeball World Champions” back to Louisville! —Sara Havens

Humana offers new insurance plan for construction industry

Humana has begun offering a new health insurance plan for small businesses in the construction industry that will increase competition and could cut employers’ costs, a local insurance agent said.

Since the implementation of the Affordable Care Act, insurance premiums for businesses with fewer than 50 people have been based on the overall health in their geographic area — rather than the health of the employees. This so-called community rating is a rule that prevents health insurers from varying premiums within a geographic area based on age, gender, health status or other factors.

Humana HQThe rule protects businesses with sicker-than-average employees from being hit with higher premiums. But it also prevented businesses with a healthier-than-average population from obtaining insurance plans with lower premiums that properly reflected the employees’ health risk.

Humana’s new plan, which is available to landscapers, plumbers, electricians and about 80 other construction/building industry professions, allows businesses to obtain insurance plans that properly reflect the employees’ health risk. The Humana plan will compete with a previously available offering from Anthem, and the competition between the two insurers should lower insurance costs for businesses, said Benjamin J. Byrne, president of Louisville-based Byrne Insurance Group.

Businesses “will have the opportunity to get a quote based upon their risk and also get a community based rate to compare against. They will be able to choose the plan and rates that best fit their company,” Byrne told IL.

Some of his clients have seen their health premiums decline 20 percent, he said.

Humana would tell IL only that it has begun offering the new plan, but it declined to provide any details for competitive reasons. —Boris Ladwig

Taco Bell offers customers a new way to order

Can I take your order? Beep-beep boop.

Taco Bell, a subsidiary of Louisville’s Yum! Brands, has partnered with mobile communication application Slack to give customers a unique way to order their favorite menu items for pick-up. While most companies have online and mobile ordering, Taco Bell’s new system uses a bot called TacoBot to communicate with customers, according to a story in Fortune.

The bot has the ability to make recommendations, answer questions and complete transactions “fully equipped with the sharp and witty personality you’d expect from Taco Bell,” Fortune reported.

Several companies, including Thought Catalog and FoodBeast, are testing TacoBot, according to Fortune. —Caitlin Bowling

Retail store opening in Clifton next month

Forage will sell plants in artisan pots. | Courtesy of Forage
Forage will sell plants in artisan pots. | Courtesy of Forage

A new shop called Forage will combine arts and crafts and retail.

Jamie Fairman, who owns wedding and floral design business State & Arrow Design Co., is opening Forage at 1731 Frankfort Ave. The Clifton storefront will serve as the offices and design studio for State & Arrow but also as a retail store where consumers can purchase local art, jewelry, handmade furniture and home goods.

“With Forage, I hope to cultivate an environment that inspires creativity, as well, with a rotation of creative workshops,” Fairman said in an email. “The workshops will be led by various local creatives and will provide a space to inspire others to find their inner creativity in learning a new art/craft.”

The store was born out of Fairman’s work with State & Arrow, she said, and will offer a unique experience for customers, and particularly brides. Forage will include a “Bouq Bar,” a station where customers can design their own bouquet.

The space’s backyard garden and patio also will be open during operating hours and serve as a venue space for pop-up events at Forage.

Forage will open sometime in mid-May. Its hours of operation will be from 11 a.m. to 6 p.m. Tuesday through Friday and 10 a.m. to 5 p.m. Saturday and Sunday. —Caitlin Bowling

New Ford Fusion a step closer to self-driving cars

Ford Motor Co.’s new Fusion comes with tech that makes sitting in traffic a little more bearable.

Buyers of the 2017 Fusion can purchase stop-and-go technology, which automatically accelerates and brakes while keeping a safe distance from the vehicle in front.

Ford said the tech “piggybacks on the existing adaptive cruise control feature.”

“When activated, the technology uses an advanced radar-and-camera based system, which reads the road every 50 milliseconds – tracking traffic and adjusting Fusion’s cruise control according to traffic flow. In slow traffic, with minimal driver input, the car can automatically brake itself to a stop, then resume travel up to set speed and following distance.”

American drivers spend about 6.9 billion hours stuck in traffic annually, or nearly an hour every week, Ford said.

While a basic Fusion starts at about $22,000, customers have to dig a little deeper to get the new tech. A Fusion with Adaptive Cruise Control with Stop and Go, costs about $32,000 — though at that price consumers get a ton of extras, including a 2-liter engine, 18-inch wheels, an 8-inch touch screen, an 11-speaker sound system and a heated steering wheel. Boris Ladwig

GE touts tax break for its locally made water heaters

A hybrid water heater being assembled at General Electric Appliance Park | Photo by Boris Ladwig
A hybrid water heater being assembled at Appliance Park | Photo by Boris Ladwig

General Electric said a reinstated $300 federal tax credit can save consumers money if they buy the company’s Louisville-made water heater.

To qualify for the credit, the ENERGY STAR heat pump water heater has to be bought and installed before Jan. 1 in an existing home.

GE said in a press release that its GeoSpring hybrid electric water heater cuts electric bills for the average household between $160 and $490 annually. The heater comes with 50- or 80-gallon capacity. The smaller version costs about $1,000.

GE’s water heaters serve as an example of the company’s focus on reshoring, or bringing production back to the U.S. by focusing on lean manufacturing. The water heaters used to be made in China.

To take advantage of the tax credit, homeowners need to file IRS Form 5695, line 22a, with their 2015 or 2016 tax filing, together with the recipt and a copy of the manufacturer’s certification statement. GE said the credit can be combined with utility rebates and state tax credits. —Boris Ladwig

Nursing college gets accreditation

Louisville-based Galen College of Nursing said it has received accreditation for its associate degree in nursing program at the Zorn Avenue campus.

The private, for-profit school said in a press release that the Accreditation Commission for Education in Nursing (ACEN) has granted programmatic accreditation, “which affirms that the program is committed to quality standards in the area of curriculum, outcomes, faculty, governance, resources and students.

“It is a form of self-regulation and evaluates a specific program against a set of nationally normed criteria,” the school said.

Anne McNamara, Galen’s academic president, said the accreditation tells stakeholders “that the college meets external standards and is consistently striving for the highest level of quality in nursing education.”

The college said it “graduates more nursing students than any other single program in Kentucky … (and) students had a 94 percent first-time pass rate on (registered nurse) licensure in 2015.”—Boris Ladwig

Both local Beauty First stores and salons to close

Independently owned Beauty First will close both locations — at Shelbyville Road Plaza and Springhurst Towne Center — on Tuesday, May 31. Starting today, April 11, all merchandise at the store, including store fixtures, will be 20 percent off. They also will stop offering salon services effective immediately.

According to a news release, “A variety of factors led to the closures, including increased competition from online retailers, rent increases and lower profit margins.”

The Shelbyville Road Plaza store opened in 1994 as part of a franchise; the store at Springhurst Towne Center opened in 1999. A third store in Hurstborne opened in 1996 and closed in 2008.

Keep your eye on their Facebook page for updates. —Melissa Chipman

Correction: The original version of this post incorrectly identified the author of a new report highlighting costs associated with the Affordable Care Act. The report was created by the Blue Cross Blue Shield Association, not Anthem Blue Cross Blue Shield.

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