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

Why be like everyone else?

A jury has awarded $31.7 million for disability benefits denied by Unum to a doctor in California. $1.7 million was for past and future disability payments and $30 million was for punitive damages.

According to a Kaiser Family Foundation survey, the average premium is now $3,600 PEPY for single and $7,954 for family. The average employee contribution for single coverage is $454 PEPY and $2,084 for family. The survey of 3,262 public and private firms from 3 to more than 300,000 employees showed that the average deductible for PPO in-network was $276.

From 2000 to 2001 the number of HMOs declined from 849 to 716 while the number of PPOs increased from 456 to 756 according to the Managed Care Information Center..

California was once the leader in HMO coverage. Now, according to California Workforce, just 58% of doctors are accepting new HMO patients and only 77% of doctors have HMO patients. Still, 51% of commercial insurance customers in California are enrolled in HMOs. About 2000 of the state’s 55,000 doctors have dropped all managed care contracts.

Wellpoint has said it is discounting and sometimes offering free generic drugs in order to increase generic drug utilization compared to name brands. Currently, 50% of Wellpoint members use generic drugs. Wellpoint is also increasing its bid to acquire Carefirst (BC of Maryland). The increase of $70M to a price of $1.37B was due to complaints about the price from Maryland regulators.

The Supreme Court is hearing a case regarding the "Any willing provider" law in Kentucky that could have major implications. The law forces managed care plans to accept any provider that will accept their terms. The insurance department of Kentucky is arguing for the law, while the Kentucky Association of Health Plans is arguing against the law.

We are hearing that some stop loss carriers are now refusing to reimburse claims in excess of their standard Reasonable and Customary, vs. the claim payer standard R&C. To the extent this is true, it will put a black eye on self-funding, since the stop loss reimbursement needs to mirror the plan document. Otherwise, the employer is put at risk against unknown standards.

GlaxoSmithKline warned Canadian pharmacies that they would shut off availability of their drugs unless the pharmacies stopped exporting to U.S. customers. However, when the deadline date arrived, they backed off.

The nation’s largest HMOs recorded a 162% profit surge from 2002 over 2001 according to Weiss ratings. However, just 14 of 441 HMOs contributed 50% of the profit increase.

Trizetto, the company that owns the RIMS systems that so many TPAs use (plus the Erisco system) said it would lose as much as $11M this year. Trizetto shares fell 20% to $4.67 on the announcement.

Harris Interactive reports that 29% of members surveyed (1000 members) gave their plans an ‘A" grade, up 3% from last year. 40% would definitely recommend their plans to a healthy friend. And 38% would do the same for a sick friend.

UHC reported that quarterly earnings are up 53% as they raised their premiums more than enough to cover the rising cost of health care.

In Chicago, Resurrection Health Care (an eight-hospital chain) is looking at buying West Suburban Hospital in Oak Park. Crain’s reports that West Suburban has been losing money since 1999. Northwestern Memorial declined to merge with West Suburban earlier this year. Four years ago a merger with Loyola fell apart over the issue of reproductive services.

What do the uninsurable cost in the state of Illinois? The average claim cost for the regular CHIP PPO plan was $9,863 per person while the HIPAA-CHIP plan average cost was $9,167 for PPO coverage. Between the two pools there were 472 people with claims over $50,000 out of approximately 13,224 enrolled persons.