Benefits.....Opinion, Hearsay & News Review
Blue Cross Blue Shield of Illinois announced
that Rush Health Associates has officially terminated its HMO agreement with
BCBSIL as of 1/1/2011. The termination does not affect Rush University Medical
Center or PPO members.
In a display of irony, AARP, which lobbied
hard for health reform has announced its plan costs are increasing due to health
reform (surprise!) and they are re-shuffling their deductibles and copays to
avoid the 40% “Cadillac Plan” tax in 2018. One wonders if the changes were
significant enough for the AARP plan to lose its “grandfathered”
status…Headline?... AARP Plan for Grandfathers isn’t “Grandfathered!”
A survey by Mercer indicates only 6% of large
employers with more than 500 employees are likely to drop medical coverage when
insurance exchanges go into effect in 2014. Only 3% of those with 10,000
employees or more anticipate dropping medical coverage for their employees.
However, 20% of employers surveyed
with 10 to 499 employees are likely to drop coverage.
MetLife is no longer writing new long term
care insurance, although they will honor current policies. Met is one of the
largest LTC carriers with approximately 600,000 insured for LTC.
Humana has acquired Concentra, perhaps
signaling how they feel about the future of the medical insurance business by
switching to a concentration on Workers Comp.
In other health reform news, Texas is
considering closing their budget gap by dropping out of Medicaid (which is
currently 20% of state spending). Health reform will increase the number
eligible for Medicaid by an estimated 50% in Texas, but the health reform law
provides no federal assistance for putting the unfunded mandate on the state
Medicaid programs in 2014. Several other states are reportedly also considering
Remember that big problem with pre-existing
conditions that Obamacare was supposed to solve? The WSJ reports that the state
and federal exchanges to accommodate those who cannot obtain insurance due to
pre-ex had signed up a grand total of 8,011 people as of November. Although
designed to run at a loss, the plans have not drawn interest, so HHS has decided
to increase benefits and cut premiums by 20% in 2011. This
is part of the plan to make sure even more tax dollars are spent subsidizing
what must be a comparatively small problem that has been blown out of proportion
by people who don’t understand how the real world works. No surprise there.
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The nonprofit Center for
Studying Health System Change has released a study showing large market
variations for hospital charges as a percentage of Medicare. Data was from
Aetna, Anthem, Cigna and UHC. San Francisco was the priciest market, with rates
averaging 210% of Medicare. Milwaukee followed closely at 205%.
The Mercer study for health
costs in 2010 has been released. Costs increased an average of 6.9% to $9,562
PEPY in 2010. In the study, 11% of employees were enrolled in a CDHP, 1%
traditional, 19% in HMO and 69% in PPO/POS plans. The average PPO deductible was
$1,200. Employers with less than 500 employees cost was up 4.46% to $8,825,
while those with more than 500 employees had costs go up 8.5% to $10,075.
Employers offering early retiree coverage decreased from 28% to 25% of
employers. The number of employers offering Medicare eligible retirees coverage
reduced from 21% to 19%. For employers with at least 500 employees, the average
2010 costs were: Midwest-$10,112-up 7.5%; West-$10,463-up5.9%; South-$8,960-up
8% and Northeast-$11,060-up12.5%.
The mini-med plans that have
been offered a one year exemption from the requirements of Obamacare are facing
close scrutiny and the plans must inform employees that the benefits do not meet
federal benefit standards. As of Nov.1st, 117 plans had received
exemptions, including several union plans. Carriers who offer the plans are
being investigated by Congress. However, no one doing the investigating seems to
realize that if the benefits were increased, employees could not afford the
coverage or the employers might not offer the coverage. Cost is apparently, as
usual with government, not a matter for concern.
We have received a copy of a
letter from a Texas Health System that charges that BCBSTX is attempting to dump
reserves by prepaying hospitals based on 2010 costs as part of negotiating a new
contract. The letter from the system indicates that in spite of asking for 30%
increases in rates from employers, the reserve dump is meant to protect BCBSTX
from medical loss ratio rules as part of health reform. In any case, an
interesting battle looms as hospitals and doctors form ACO’s for health reform
which are supposed to lower costs, but which may also raise the prices charged
to private payers due to increased negotiating power of these ACO’s.