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S&S Benefits.....Opinion, Hearsay & News Review

Why be like everyone else?

S&S Benefits Consulting 219 Darien, Dundee, IL 60118 Phone: 847-428-5353, Fax:847-428-9876,

Email: ssbenefits@interaccess.com

Volume 1 Issue 9-Street Talk August 1,1999

HEat. Heat and more Heat. As the temperature approaches 100 degrees in Chicago, the heat is on managed care in Congress. Itís still unclear as to whether patients will be able to sue their health plans, but if they are, trends will have little chance of reducing in the near future.

KAiser Foundation has released studies recently citing major dissatisfaction with HMOs and point of service plans where the PCP needs to manage care plans. Doctors, nurses and patients all appear to be unhappy according to the study.

MEdicare HMOs are taking their hits. According to the HCFA in BI, about 327,000 of 6.2 million beneficiaries are enrolled in plans that will either withdraw from Medicare or reduce their service areas.

CEridian Benefits Services released a study that said HMO premiums have gone up 6.49% from the previous June, while non-HMO premiums have increased 8.05%.

WE seem to have talked to a number of people this month who are fully insured and receiving passes on their renewals and are happy. Most did not have any experience data to go with their renewal. One person was smart enough ascertain that perhaps he wasnít getting the best deal and that the experience data was probably excellent and that a rate decrease was in order.

CRainís reports that potential buyers for Rush Pru include Aetna, Cigna, BC/BS and Wellpoint. Crains reports that the hospital has decided to sell the plan, rather than buy it back from Prudential.

LOcally, Accord Health Plan said that it is dropping Medicare managed care after one year and only 700 members. Crains also reported that they are dropping their Medicaid and transferring members to Harmony Health Plan.

DO you need coverage for naturopathy, massage therapy and acupuncture? Many states will be watching, as will insurance companies (who will be calculating) the impact of a new law in Washington state that forces coverage for alternative care. The impact of such claims could probably be known if our federal government had the know how to collect data from the Champus program, which covers many such items. Other states may follow Washingtonís lead. Given the nature of government, they probably wonít wait to find out the cost.

BI reports that July rate increases on HMOs are running 6% to 12% with PPO increases of 9% to 12%. What most of these articles miss is that averages probably mean nothing for those who have their experience data and can negotiate. However, you may have to make a change to get a better deal. As reported on ABC.com , there are wild swings in corporate profitability. They say that Merrill Lynch projects that Humana profits will drop by 41% this year while Pacificareís profits are expected to go up by 39%. The same article had Aetnaís profit margin at 2.7%, Cigna at 5.4% and UHC at 2.8%. If your company cannot operate on those margins, you can imagine how these carriers will try to regain margins.

ACcording to Express Scripts, Rx card plan costs increased by 16.8% last year, the largest increase in several years. The same firm predicts that costs will continue to rise by 13-17% per year for the next several years. 35.6% of costs appear to be from drugs introduced since 1992. If you are self funded you may want to know if Rx costs are included in your specific. If you donít have a drug card, donít let your renewal get mixed in with trend averages that include a card. Did your consultant tell you that?

NCQA has announced that beginning in the year 2000, they will begin quality surveys on PPO plans and will take a look at the nationís 1035 PPOs. Once again one has to ask how quality is defined. And apparently, since POS plans are falling out of favor, NCQA is not moving to review them anytime soon, even though most of those plans rely on PCPs for quality intervention in the same manner as HMOs.

Harris has released a poll of more than 1000 people conducted in June which shows 47% of people believe the nationís healthcare is getting better. In 1996, 57% of people thought it was getting worse. Now, about 55% of people believe that more managed care will harm the quality of care while 32% believe it will help. The pollsters say the poll indicates that hostility towards managed care is bottoming out. However, no reason is given. Is this a trend that is following the nationís marked increase in PPO enrollment?

S&S Benefits Consulting is a partnership of benefits professionals with over 50 years in the health and welfare business. We specialize in the group business and donít try to sell you services where we have no expertise. If you need professional advice or an impartial analysis we are here to assist you. If we canít help you, chances are, we know who can.