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

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

Email : jseiler@ssbenefits.net                                               http://www.ssbenefits.net/   December 2007 Issue

Milliman/ Summit Re



Catastrophic Claims Increase Dramatically

Claims in Excess of $1,000,000 per Million Lives Year


Claims Per Million Lives

Average Claim

Claim Cost Per Life





























Independence Holding Company that owns Standard Security Life, Madison National and American Independence Corp. and has considerable stop-loss business, echoes what we have been hearing from many markets. Profitability is down for them and many other carriers (after 61 consecutive quarters of positive net income for IHC). The market is soft despite the increasing frequency and severity of claims. In other news, Companion Life has purchased MGU Montgomery Management Corp.

A Cook County, Illinois judge has just increased the cost of healthcare in Illinois by striking down a law as unconstitutional that limited medical malpractice non-economic damages to $500,000 for doctors and $1M per case for hospitals.

The Massachusetts state subsidized health plan looks to be in the red by as much as $147M (original budget of $472M), due to fast growth and poor budgeting for cost. Is anyone surprised?

Mercer reports total health benefit costs rose 6.1% in 2007 to an average of $7,983PEPY. CDHP cost was $5,970. HMO-$7,120. PPO-$7,352.

Cigna has purchased Great-West Health for $1.5Billion in cash plus $400M it will invest in the business. For 2.2M members, that works out to be about $864 per member. We find the sale troubling as competition continues to dwindle in the health insurance market. Cigna also has settled with NY Attorney General Cuomo by making changes in its physician ranking program in NY. Aetna has agreed to do the same, using Cignaís methodology for ranking as a model.

Condell Medical Center in Libertyville, IL has sued BC/BS of IL for $22.9M for services it says BC has not paid for itís members plus $3M for breaching itís obligations under the contract.

Humana has been hired by the UK National Health Service to help them enhance the patient experience, improve clinical outcomes and reduce costs. Ironic that a government run health system needs help from an American insurer.

Advocate in Chicago and United Healthcare have signed a contract, nearly four years after the two parted ways in a legal dispute. As large as Advocate is, they were feeling the heat for patients since UHC is the state of Illinois second largest insurer.

The Rippe Lifestyle Institute says that more than two-thirds of Americans are overweight or obese. Overweight people have 13.8% higher annual health costs and obese people have 37.7% higher costs. It is estimated that obesity causes 40%-70% of hypertension cases, over 50% of blood lipid problems and over 80% of Type 2 diabetes and almost 100% of metabolic syndrome cases. Over the past decade, obesity has grown by more than 40%. However, it is listed as the cause of only 0.3% of claims submitted by physicians.

A.M. Best has restored Trustmark Insuranceís A- rating. MedAdvant is selling NPPN (National Preferred Provider Network) to Coalition America for $23.5M. NPPN is the secondary network for many PPOs.