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.