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

Aon Hewitt reports  that CDHP plans have surpassed HMOs in popularity. Among those employers offering medical insurance, PPOs are offered by 79% of employers, with CDHP offered by 58% of employers and HMOs at 38%.

A survey from Aetna says that employees rank choosing a medical plan as the second most difficult major life decision, behind saving for retirement. Eighty-eight percent find available information complicated and confusing. Wait till they see Obamacare! Better yet, wait till they find out it's not free!

HHS decided to delay until Dec. 14th for states to notify HHS  if they intend to create an exchange.The HHS deadline to approve exchanges is set for January 1, 2013. To date, only 15 states and D.C. have said they will run their own exchanges.

The 2012 UBA Health Plan Survey shows the highest cost plans are in the Northeast at $10,259 PEPY. Of all surveyed plans in the Northeast, 33.6% have no single deductible, compared to just 8.4% and 4.1% in the Southeast and Central regions. The Southeast cost PEPY was $7,694, North Central-$9,451, Central-$7,821 and West-$8,763. Meanwhile, Mercer reports  a PPO average cost of $10,007 PEPY nationally with HMOs at $10,167 and CDHP at $7,833. The national average cost rose 4.1% to $10,558 in 2012. Mercer regional cost averages were: West-$11,969, Northeast-$11,500, Midwest-$11,026 and the South at $10,005 for employers with 500 or more employees. The cost increase from 2011, is the lowest in 15 years.

In 2013 the Medicare Part A deductible increases $28 to $1,184, the Part B deductible increases $7.00 to $147 and the Part B premium increases by $5 a month to $104.90.

HCSC (BCBS-IL, NM, OK TX) is agreeing to buy BCBS-MT for $118M which goes to charity. BCBS-MT has 247,000 members and a provider network of 2,000 physicians and 2,800 other healthcare providers.  The local BCBS-MT CEO said the merger allows the MT operation to save money and remain locally focused and not-for-profit.

Self-funding continues to grow-especially as employers see the problems insurance companies will have with Obamacare. In 2011, 58.5% of workers were in self-funded plans, up from 40.9% in 1998. In 2011, 68.5% of workers in firms with more than 50 employees were with self-funded companies compared to 10.8% for workers in firms of less than 50 employees. The state with the highest percentage of self-funding  of small groups is Hawaii, followed by Alaska and Massachusetts. MA self-funded plans have grown since the enactment of their Obamacare type plans in that state.

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A survey on Rx prices by Express Scripts  shows that Rx costs are projected to be 11.1% of national health expenditures in 2020. Brand name drugs which cost $100 in 2008 are costing $163.08  now in 2008 dollars. Generic drugs, by contrast would now cost $60.96 in 2008 dollars. Specialty drugs consume 20.8%  of pharmacy spending and are trending at 22.6% year to date compared to all other drugs at -0.6% year to date.

A Kaiser Health Plan Survey finds that government benefit plans are more expensive, have lower out of pocket costs and employees have to contribute less than private sector employees. Employees pay 23% of premiums for a family plan in the average government plan, while in the private sector they pay 30%.  Between 60%-80% of large government plans offer retiree coverage vs. 20% of large private employers.

Now there is a fee for that. HHS has announced  that any insurance company that wants to participate in federally operated exchanges will have to pay a 3.5% of premium fee for any member that enrolls in the insurance company's exchange plan in 2014. Higher fees may be applicable in later years. No word yet on whether the fee will be counted against the minimum allowable loss ratio the insurance company is allowed to have under Obamacare before they have to rebate money to their customers. Under the law, as written, federally operated exchanges will not have subsidies for those that enroll. Not surprisingly, HHS seems to be ignoring that portion of the law and betting that insurance companies will want  access to all those people with pre-existing conditions in the exchange and be willing to pay the fee. That may be true in the short term, but a bad bet in the long term.

Anthem has proposed an 18% rate hike average on 630,000 individual policyholders in CA. They say their profit margin is less than 1%  and even with the hike, they will lose money next year on individual policies.

The AMA says that 70% of metropolitan commercial health insurance markets are highly concentrated with one or two insurers dominating the markets, leading to less competition. Look forward to that figure getting worse with Obamacare.

HHS has issued 373 pages of proposed rules under Obamacare for comment. Our comment is:"How is anyone supposed to follow 373 pages of rules on top of a 2,700 page bill that most still don't know what is in it?"