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

Welcome to the New Year and New President with majorities in the Congress. However, if all the benefits laws pass, it will put even more stress on employers trying to cope with rising costs.  The Lilly Ledbetter laws could prove very costly. The COBRA bill being proposed has an estimated cost of $39 to $65 Billion according to PwC.  Technically, how will the government make sure COBRA beneficiaries are given the money and that employers and insurance companies are paid? In the midst of all the layoffs occurring, this should be a real nightmare. Given the cost to employers, we fail to see the economic stimulus.

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HealthLeaders- Interstudy reports that during the first six months of 2008,  self-insured medical enrollment grew by 1.6 million lives, or 2.2% to more than 75.3 million members nationwide. We would guess that a lot of that movement is about avoiding costly state mandates. Historically, it has been hard to secure self-funded quotes for employers with less than 100 employees insured, but S&S Benefits has discovered some markets/products that can make self-funding palatable for some companies with less than 100 employees. It does remove the veil of missing claim experience that makes it so hard to understand rate increases in the pooled marketplace-especially if you think your group is rather healthy.

HealthLeaders-Interstudy also reported that during the first six months of 2008, CDHP enrollment grew by nearly 900,000 lives as employers shifted more costs to employees.

Researchers analyzed medical claim data on 17 million employees and discovered that lupus costs employers an average of nearly $20,000 per patient per year. Asthma costs were $8,907 and diabetes costs were $14,709, while heart disease patients cost $17,860. Prevalence of the lupus is small, so the average cost per employee per year for lupus was $22, while the asthma cost was $191 and heart disease was $312.

We previously reported that Humana had ended their contract with Rush Health Systems in Chicago . As usual, an agreement was reached and Humana was re-contracted on January 1^st, 2009.

UHC decided to settle the class action litigation against it for the operation of Ingenix database that serves as the out of network UCR database for many insurance companies and third party administrators. As part of the agreement UHC will spin off Ingenix to a non-insurance company that will contract with a university to redevelop the database. This could prove costly to employers, since the new methodology of the database may allow providers to game the system by inflating charges that will affect UCR in the next year. Ingenix methodologies that accounted for that gaming of the system were reportedly part of the issue in the litigation. We wish UHC had fought the suit.

A division of the US Treasury has issued a report that Medicare hospital insurance benefits began to exceed program tax revenues in 2008, while SS benefits are anticipated to reach that point in 2017. Largest contributors to government net cost are HHS (19.6%), DOD (20.3%), SSA (18.2%) and interest paid on debt. Federal employees’ and veterans’ benefits payable in 2008 have exploded from $90.1B in 2007 to $549.8 B.

New Towers survey data says that employers will pay $9,552 per employee year in 2009, up 6% from 2008. In other news, the Federal government’s employee health plan will cost 8% more in 2009, a large jump from a 2.9% increase in 2008 and 2.3% in 2007. A PwC study found that most of the growth in premiums in 2007 was attributable to inflation. More that ¾ of the increase was due to rising provider costs.

The Institute for Health and Socio-Economic Policy and California Nurses Organization has put out a long study that purports to justify a stimulus to the economy under a single (government) payer health system. In the interest of academics we downloaded the document and started reading. After an hour of the unsubstantiated pabulum (basically pulling job growth statistics out of thin air), we gave up.