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

Why be like everyone else?

WE have all made it past Y2K without any major disasters… from all reports. Now only Groundhog Day and February 29th to deal with for all the disaster predictors. However, the financial report cards are coming out and the disasters are right where we expected them.

Weiss Ratings is reporting that HMO failures surged 78% from 9 to 16 and insurance company failures rose 21% from 21 to 22 from 1998 to 1999.Weiss reports that they had issued warnings on 30 of the 38 failures. However, if you listen closely to the politicians you’ll know that HMOs and insurance companies are profit machines that can withstand even more legislation and further jury awards. If so, and if it happens, you will be paying.

HUmana must pay a girl with cerebral palsy almost $80 million because a Florida jury said Humana improperly terminated her treatment and lied to her parents. Humana intends to appeal.

CLinton will ask Congress for fiscal 2001 to give COBRA beneficiaries a tax credit equal to 25% of their premiums (reduces the number of uninsured, increases your COBRA costs). He is also recycling (just like a tin can) a proposal that would require employers terminating health care plans for retirees age 55 and older to extend COBRA until the retiree reaches age 65.

FOr those of you with NY employees(or who may use NY medical care), the last report was that the NY legislature will extend the surcharge to pay for indigent care and graduate medical education in that state. We knew you wanted to help!

MOre HMO profit talk. Of those rated by Weiss Ratings in Illinois, 12 of 15 reported profits. Other states with a majority of profitable plans were Michigan, CA and VA. The biggest losing states were TN, NC, LA and NJ. Meanwhile of the 40 best HMO’s in the nation according to NCQA, three are in very bad shape. Harvard Pilgrim was taken over by the state of Massachusetts in January. Geisinger Health Plan in central PA lost 2.3 million and Kaiser has lost more than $550 million since 1997. All three are not-for-profit. In 1998 113 N-F-Ps lost $357.7 million while 323 for–profits lost $272.7 million.

AEtna has apparently done such a fine job of servicing their inforce business through all their mergers, that they have decided to take on one more. They are going to merge their Global Health (international) with the domestic operations of Aetna U.S.Healthcare. The president of the domestic operation is expected to head the operation. Interesting since financial analysts say it was the domestic health operation that was dragging down Aetna’s stock.

IF you are not getting this newsletter via e-mail, why not get started now? Our e-mail address is ssbenefits@interaccess.com. Just drop us an e-mail with your name and address. The newsletter comes in a Word 97 attachment. We’ll save it to a lower version of Word if you so desire. Just let us know! The big advantage for our e-mail users is breaking announcements that are pertinent to the world of group insurance outside of our fun loving normal monthly report.

Ok. So you’ve held your 401(k) enrollment. A survey of 384 companies that was cited in BI says that about 40% of respondents last year allowed their employees to join the plan within three months of the hiring date. The figure is 57% for companies with at least 1,000 employees. A factor may be the new law that says employers don’t have to include employees with less than one year of service in running basic discrimination tests. In our view, another factor is the shrinking market of decent job applicants. Benefits rank high on the list of those seeking employment. We can conduct our own survey. E-mail or fax us your waiting period for 401(k) or 403(b) eligibility.

HCFAreports that public spending on healthcare grew only 4.1% between ’97 and ’98 while private spending grew between 5-7%. Remember that portion of trend called cost-shifting?

MEanwhile TP in BI reports trend is up with HMO rising just over 2 points to 8.9%, PPO is up to 11.09% and POS is up to 9.6% including Rx. Rx trends are a driving force. Dental trends are down. Remember, trend is just one portion of your renewal factors. If you would like an analysis of your experience data, we are here to help.

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 don’t 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 can’t help you, chances are, we know who can.