Hearsay & News Review
Ok, they passed the Health care reform bill.
That’s bad enough, but now we have to listen to the President campaign about
how great it is? Sorry, but the lies are becoming intolerable. They want
everybody to have coverage, but raise the percentage of salary that medical
expenses must exceed in order to have those expenses be deductible. What about
just making individual health insurance tax deductible, the same as it is for
group insurance? How about something
unworkable for employers? In 2014, there is a $3,000 penalty on
employers with 50+ employees for each full time worker whose premium exceeds
9.5% of Family income if that
employee receives coverage through one of the state insurance exchanges (that
are apparently going to spring out of nowhere). Uh huh? So, do employers now
have to track family income of their
employees? Who gives them that right? (Imagine- “Hey Julie, how much does your
hubby make? Do your kids work? How you doing on investment income?) Or
does one of the 16,500 new IRS agents come into an employer’s office and drop
a bill on the CFO’s desk after the family files their income tax return?
Or, how do employers deal with the little
nugget about having to offer coverage to employees’ adult children up to age
26, if no other plan is available. If employers hate dealing with proof
of insurance for dependent children who are students, they’ll really like
dealing with this in 2011. But don’t worry, it’s temporary. In 2014,
coverage must be offered to employees’ adult children up to age 26, even if
other coverage is available.
Like most government programs, this one has
many incomprehensible provisions that will be left up to regulators. We have
sent out the majority of the provisions in prior emails. Once the aspects of the
“reconciliation’ package become available, we will publish the best
summaries of the information available. If we want to know what is in store for
us nationally, take a look at
. The insurance premiums in MA are the highest in the country and per capita
health spending is now 27% higher than the national average! Hang in their MA,
the rest of us will soon catch up!
Oh, did we mention the LTC plan that is part
of the bill? That should be real affordable, until claims catch up to the
premiums. Illustrative of that is major LTC providers (Prudential, Met, Genworth,
UNUM, Mutual of Omaha, Bankers, Allianz and Transamerica and Hancock) have
sought rate increases ranging from 18% to 25% on policies written a decade ago
according to Investment News. The policies used to be affordable due to
investment income, but that is drying up. “How’s that stimulus workin out
Due to the healthcare reform,
Caterpillar announced it will cost an additional $100 million in the first year.
Verizon said it will have to cut health care benefits to offset new costs.
AT&T announced it will record a $1 Billion non-cash expense in the first
quarter to account for Obamacare. Most of the charges are due to the elimination
of subsidies the government has provided to companies which cover expenses
normally allowed under Medicare Part D. Those will be going away. Henry Waxman
and House Democrats immediately said they would haul these companies before
Congress for a hearing on April 21st, basically saying the companies
are lying. However, the FASB accounting rules do call for companies to
immediately account for their retiree liabilities. Of course, since Waxman
thinks Obamacare will bring costs down, he is totally puzzled and frustrated by
this new development. Hey Henry, wake up before the truth rolls over you like a
Prius with a stuck accelerator.
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Following the Illinois Supreme
Court striking down medical malpractice reform, a study by Milliman says
malpractice insurance costs will rise by 18%.
While costs rise, cash is
pouring in at big
hospitals. Patient revenue is up 12.4% at Advocate and 7.6% at Northwestern and
Prudential is buying AIG’s
Asian life insurance unit, but at home is reportedly facing a nationwide
class-action lawsuit on behalf of LTD claimants who are appealing denied
disability income benefits. Pru has declined to comment.
MultiPlan has completed an all
stock acquisition of Viant, Inc. (
, Preferred Payment Systems).
Before they are outlawed, here
are some facts from a survey of 370 organizations. 44% offer a CDHP. Of those,
56% use an HSA model and 35% use an HRA model while 9% use both. Sixty-three
percent of employers have more than 10% of their employees participating in a
CDHP and 38% of employers use the CDHP model to control costs.