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

The WSJ reports that in 9 of 10 states that have filed their proposed 2015 Obamacare rates, the largest insurers are increasing premiums between 8.5% and 22.8%. The rates reflect medical inflation, PPACA fees and coverage mandates. Florida Blue, the state’s largest health insurer, is increasing premiums by an average of 17.6% for its PPACA plans in 2015.

A new study from the American Health Policy Institute said that employers in 2012 spent $3,430 per covered life, up 13.6% from 2003 after adjusting for inflation. For large employers (over 1000 employees) the figure was $4,990 per covered life. Federal and state governments spent $9,130 per covered life in 2012, with Medicare leading the way at $10,830, up 28.2% since 2003.

A class action lawsuit in California accuses Blue Cross of misrepresenting the size of its networks on PPACA plans, plus concealing that out of pockets and deductibles were much higher for out of network utilization. They are probably not the only carrier that could be accused.

According to the Aflac Workforces Report for Small Business released in July, only 12% of small business employees say they are extremely satisfied with their benefits.

On the same day, one court in Washington, D.C. and one in Richmond, Virginia reached totally different conclusions on Obamacare. The D.C. court said that the law specifically excluded subsidies for Obamacare enrollees in states that did not form their own exchanges. The other court held the opposite and went with the IRS interpretation of the law (which ignores the law as written). The settlement of the issue was expected to be expedited to the U.S. Supreme Court, but now administration officials are appealing to the whole D.C. Court of Appeals to reverse the 3 judge panel that ruled on the law. That is because Obama has packed the full court with his appointees (7-4) and the administration does not wish to risk the case before the full Supreme Court.

A survey by the Agency for Healthcare Research and Quality found that just 16.6%  of employees taking single coverage from their employers no longer pay for single coverage. Only 6.9% of EE+1 and 7.9% of Family enrollees don’t pay for coverage. The average total premiums were $5,571 single, $10,990 EE+1 and $16,029 in 2013. Employees who contributed  paid an average contribution of $1,170 single, $2,940 EE+1 and $4,421 family.

If you wish to be added or removed from the distribution of this newsletter, please email jseiler@ssbenefits.net

According to CMS, 6.8 million consumers were to receive an average rebate of $80 ($330 million) by the deadline of August 1, 2014 due to the Medical Loss Ratio Rule where insurance expenses and profits cannot exceed 20% (small group and individual policies) or 15% (large group) of premiums.

A listing of PPACA exchange grants released by the Congressional Research Service shows that over $4.8 Billion dollars were granted to states for their exchanges for the 5.4 million enrolled, for a cost of $895 per enrollee, of which 87% (4.7 million enrollees) received an average subsidy of $246 per month. That brings the subsidy cost to $13.9 billion in addition to the $4.8 billion to enroll the people, for a taxpayer spend of approximately $19 billion for the first year of the exchanges. Welcome to the welfare state.

The IRS has adjusted for inflation the maximum an employee can spend of household income in order for coverage to be affordable to be 9.56% of household income, as compared to 9.5% in 2014.

A recent issue of a major insurance publication highlighted the growth of CDHP/ high deductible plans from 1 million enrollees in 2005 up to 17 million enrollees in 2014, or 12.4% of enrollment in medical insurance plans. While touting the cost cutting nature of the plans (employer costs possibly, but not employee), the articles touted wellness and decision making tools to help employees gauge the average cost of charges from various providers. There was hardly any recognition that providers do not provide their actual charges, for fear of revealing what discounts they grant any one insurance carrier. Employees would find it impossible to come close to knowing the cost of anything but the most benign pre-planned outpatient procedure. None of these measures address actual cost. The carriers are invested in their networks. They all claim they save more than the next. It’s all a shell game. The majority of brokers/consultants (especially the larger houses) endorse the shell game for the sake of their overrides instead of solutions for their clients. Reference based pricing and Cost Plus solutions as proposed by leaders such as ELAP will make a difference. Not the pabulum spewed in most of the insurance industry press. If you want to learn more, call.