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

Chubb has decided to stop writing employer stop loss insurance on a direct basis and will only offer the product through Chubb Custom Market and its affiliation with C.V. Starr.

A front page story in the WSJ says that Wal-Mart has come out in favor of an employer mandate to offer group health insurance. That is no surprise since such a mandate would impose higher costs on most small retailers that attempt to compete with Wal-Mart.

Of 21 major health companies surveyed, the average cost increase expected due to mental health parity laws that take effect in January, 2010, is expected to not be more than 3%. The law applies to all employers with more than 50 employees.More than 1,100 employers responded to an Aon survey regarding health care reform. 93% favored continuing an employer based system. 81% opposed a national health plan similar to Canada . 63% oppose an employer mandate.

Hewitt has said that 2010 HMO initial rate increases offered before negotiation will be about 11.8%, down from 13.2% in 2008. Many employers are terminating HMO plans in favor of self-funding.  56.6 % of employers offered HMOs in 2009 compared to 59.1% in 2008.

Illinois has amended continuation of coverage laws for insured groups and increases the length of state continuation by 3 months from 9 months to 12 months effective June 18, 2009 for groups renewed or amended after that date.

Although the AMA has endorsed the health reform packages that are in the Congress, the online community of physicians (www.sermo.com) released results of a survey that shows that 75% of physicians are not members on the AMA and 89% of docs say that the AMA does not speak for them. Further, 91% say the AMA does not accurately reflect the opinion of physicians.

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United Healthcare has signed a definitive agreement to acquire Health Net’s northeast customers in Connecticut , New York and New Jersey .

Researchers at the CDC, RTI and Agency for Healthcare Research and Quality analyzed medical cost data from 1998 and 2006. They say that more than 26% of Americans are obese (body mass index of greater than 30- BMI is = to weight in kilograms divided by height in meters squared). Obesity accounts for 9.1% of all medical spending, up from 6.5% in 1998. Obese people spent an average of $1,429 more per year on medical care than did normal weight people. The overall cost of obesity is estimated at $147 Billion per year. If things continue on as they have in the past with no smoking laws in most states, pretty soon overweight people will be not be allowed to order a cheeseburger or ice cream.

CDHP enrollment is up. That is no surprise as costs have risen and employers attempt to shift some of that cost. Enrollment in CDHPs is estimated at 6.4 million for 2008, up from 5 million covered lives in 2007 and 2.1 million in 2004.

Reports are out that Aetna is attempting to sell its pharmacy benefit management business. If you will recall, Wellpoint sold their PBM to Express Scripts in April.

Aetna has also announced (contrary to what the President said in his recent healthcare news conference) that it has sharply cut its full year earnings forecast because of higher than projected medical costs. Aetna reported a 28% drop in second quarter income. The higher medical costs stemmed from more use of emergency services and lab and preventive services.

To show how well government mandated health benefits lower costs, Massachusetts’ new proposed budget eliminates health benefits under their mandated health plan for 30,000 legal immigrants (those who have had green cards for less than 5 years) in order to cut costs by $130 Million. Enrollment in the plan has gone up as more people have lost their jobs.

A survey of 372 small to medium companies shows that wellness incentives have increased from $204 in 2008 to $329 in 2009 and half of the companies offer incentives to the families of employees. 73% are monitoring results and 83% of them say the ROI is better than 1:1.