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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 IF YOU WOULD RATHER RECEIVE THIS VIA E-MAIL !!!!

Volume 2 Issue 1-Street Talk December 1999 Issue

HAppy Holidays! By now the Thanksgiving leftovers are probably gone!

The group insurance world continues to consolidate and limit choices. General American Lifeís group business was sold to Great West by Met Life. Met did not want to get back into medical and GWL and GA say nothing in GAís operations will change.? Ask the folks at AH&L and New England if that is trueÖ

REinsurance markets (for self-funded plans) will be consolidating too according to many inside sources. At least one large provider of paper that takes risk is rumored to be pulling out. Sources for quotes will be drying up according to most. Rate increases appear to be averaging 25% for stop loss and word is that anywhere from 25 to 50 MGUs will be put out of business after January 1st. Large rate increases are expected again in 2000. A little education will be coming for many, since MGUs are the major distributors of the stop loss paper. The fronting carrier whose name is on the paper might only take a small share of the risk or none at all, while the major backers of the paper are getting hit with Big losses. Since many TPAs use MGUs for their paper, they may suddenly find their MGU is no longer available for quotes since the real reinsurer has pulled the paper! As capacity dries up, the rates will go up!

HMOs are not safe from this occurrence either! A major provider of HMO excess coverage (Lincoln Re) has announced it is pulling out of the market and others may follow. Many HMOs backed up the risk of their capitation arrangements with reinsurance. According to sources, as that market dries up, premium increases could be as high as 20% to 50%.

UnitedHealthcare made big news with Clinton and reporters with itís changing stance on utilization review(UR). Yaaaawwwwn! The majority fail to realize that UHC will still review the most critical decisions that cost the most money. We think the announcement is more a smart PR move to dodge patient protection bill lawsuits with unlimited liability. UR will continue for most plans that will continue to save money through the sentinel effect and shorter Length of Stays that would be true without it. Did UHC really not save money due to itís own excessive overhead for the service and lack of efficiency? We may never know.

NOrwood-Dingell is slammed in a great article in BI Nov.15 Did you know that N-D permits unlimited punitive damages for eligibility denials? Is your eligibility updated daily? Did you know that N-D requires health insurers (not docs) to make referrals to specialists (even indemnity & PPO plans)? How will they do that? While trying to protect against HMOís, the bill thus makes all plans like HMOs! How about N-Dís requirement to pre-authorize within 72 hours, but no requirement for docs to provide medical records in 72 hours?

N-D is just more Congressional garbage brought to you (for the benefit of trial attorneys) by people who donít know anything about the subject of health insurance. Hope for failure in the Senate!

Health Care Service Corp. (BC/BS of IL) has now bought a stake in RightChoice (the for profit sub of BC/BS of Missouri) in addition to their stake in Texas. RightChoice is still struggling to become a for-profit in Missouri (litigation pending).

BC/BS of Illinois has also allowed accredited chiropractors to become gatekeeper PCPs in itís HMO plans. 40 chiros are expected to be in the role by year-end.

Kaiserís health survey says that self-funded plan cost increases were 2.1% less overall than fully insured plans from 1998 to 1999. 2/3 of large employers and 1/3 of small employers self-fund. HMO enrollment is down from 31 to 28% over the last three years. Employees generally pay 16% of single coverage and 32% of family coverage costs.

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.