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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/  February 2007 Issue

A survey of 5,173 workers on Job.com shows that 60% of workers have resolved to find a job in 2007, which is not surprising given the nature of the site. Of those, 35% listed “Other” as their reason for seeking new employment when given choices of salary, improved working conditions, better benefits, wish for a promotion or dislike their commute or boss. The question becomes, “What is the nature of other?”

Transplant frequencies are up 3% for all types of organ transplants in 2006 over 2005, Costs were up by 15% overall and the frequency of multi-organ transplants increased 9% in 2006.

EBA hosted a broker roundtable where advisors who participated said that they expected movement to CDH plans would drop off soon. The reason seemed to be that once pricing fell into line with actual costs, the plans would not be as attractive. Meanwhile, there is news from BenefitNews.com that only 20% of HDHP enrollees created an HSA account for their plan. The average HSA balance is $1,180, while the average HSA deductible is $2,378 for single coverage.

CDHPs were supposed to help decrease the number of uninsured. A survey by EBRI/Commonwealth Fund shows the impact of CDHP is no greater than other plans. 10% of CDHP enrollees were uninsured prior to enrolling in their current plan while 24% of those in more comprehensive plans were also uninsured prior to their current plan enrollment.

Sun Life has agreed to acquire Genworth Financial for $650M . That will make Sun the second largest U.S. medical stop loss provider. Genworth offers various insurance plans to 32,000 organizations. Meanwhile, UnumProvident is changing their name back to Unum.

Researchers for the Agency for Healthcare Research and Quality report that  the top 1% of people in the expenditure distribution of medical care, account for almost ¼ of all medical expenses and the top 10% account for nearly 2/3. Half of the population at the bottom of the distribution account for only 3% of all medical spending. From 1996 to 2003, the top 1% of spenders dropped from 28% to 24% of spending and the top 2% dropped from 38% to 33% of medical spending.

The BLS announced that employer costs for employee compensation averaged $27.31 per hour worked in 9/06. Wages and salaries averaged $19.12 with benefits costs at $8.18. Insurance costs averaged $2.22 per hour (including life, health and disability), or 8.1% of total compensation.

Now let us contrast that with Teddy Chappaquiddick’s universal health plan proposal entitled “Medicare for All.” He’ll pay for his plan with a 7% payroll tax on business and 1.7% on workers. His web site states that business’ now spend 13% of payroll to cover their workers (a little different from the BLS’s figures). Kennedy says his plan will save $380B a year with $160B saved from universal electronic medical records, $70B in reduced insurance overhead and $50B in reduced administrative costs. Right. This is the government we’re talking about.

In the meantime, Aaaaanold Schwarzenegger announced his plan for insuring all Californians, including illegal immigrants. His plan will cost $12B (or so he says). He announced that all employers with more than 10 workers will pay into a fund to provide the coverage. He is so smart that that he is going to require all insurance carriers to accept all applicants regardless of health and then he is going to limit insurer’s profits. After the insurance carriers leave the state, he won’t have to worry too much about their profitability. Plus, he is going to tax docs and hospitals, since once everyone has insurance, the high rates they charge can be used to buy more insurance (at least that’s how it’s supposed to work according to the Terminator).

Not to be left off the bandwagon, President Bush announced his tax credit plan for helping to cover the uninsured. While we couldn’t locate all the details (and apparently, neither could the pundits), apparently there would be tax credits available for coverage on up to $7,500 per year for single coverage and $15,000 per year family. Coverage valued at more than those figures would be subject to tax.

What is truly remarkable about all these proposals is the lack of understanding of how the healthcare system really works. While there are not enough details available to make light of the Bush plan (yet), the debate over the plan illustrates the true lack of understanding of how the system works on the part of both conservatives and liberals. There is so little understanding that we actually had conservatives taking liberal positions and liberals taking conservative positions and they didn’t even know it. There was more misinformation spewed on television and talk radio in the ensuing 24 hours than we could imagine, simply because so few people (on both sides of the aisle and in the middle) know how the system really works. It’s really a shame that absolutely no one hires an expert and if one happens to get on the air, they never get more than a 15 second sound-bite. Prepare for a debate of disastrous proportions and while they are all trying to socialize the system, ask yourself why Canada and Europe are moving towards privatization. All this, and it’s not even election year.