Hearsay & News Review
While the health care reform bills appeared to
be stalled due to the election of a Republican to the Senate to take Teddy
Chappaquidick’s former seat, Obama has said he is not dropping the issue
(although he waited until the 53rd paragraph of the State of the
Union speech). Pelosi has indicated that if the Senate can make a few
adjustments to their version of reform, she can find enough votes to pass the
bill using reconciliation as a means to passage. So,
while polling may indicate that most Americans are against these “reforms”,
Congress and the President apparently do not believe that the people should have
any say in what is best for them.
Mercer’s 2009/2010 Compensation survey
reports that only 14% of employers are planning across the board wage freezes
for 2010. The average increase in wages is expected to be 2.7%, as opposed to
3.2% in 2009.
Health insurer’s net income fell by 12.4%
($8.2 billion) in the third quarter of 2009. Health benefit payments jumped by
6.9% and net profits averaged 2.4%.
The EBRI reports that
worker’s median tenure at their job is 5.1 years as of 2008. Not much has
changed in the last 25 years since the median tenure was 5 years in 1983.
From September 2008 to September 2009, the top 8 medical insurance
carriers saw an aggregate decline of 1.7 million members, which amounts to a
1.3% drop in enrollment. There were an additional 860,000 in member losses from
the third to the 4th quarters in 2009. Only one of the top eight
insurance carriers (Humana) had any improvement in net profit from 2008 to 2009.
Wellpoint did report a profit
in the 4th quarter due to the sale of their NextRx unit to Express
Scripts. However, their enrollment fell 3.9%.The Wellpoint loss ratio went from
83.4% a year earlier to 84.8%.
The Hay Group says that
average premium increases in 2010 will be 9%. In 2009, 11% of employer groups
paid the full premium for single coverage and 4% of employers paid the full
premium for family coverage. That is a drop of 38% since 1990. When employee
contributions are required, employees pay an average of 20% for single coverage
and 25% of the cost of family coverage.
A Buck survey of trend has PPO
trend at 11.1%, POS at 10.9%, HMO at 10.3% and High Deductible Consumer Driven
plans at 10.3%. Average prescription drug trend was 10.9%. The numbers contrast
a little with Segal’s trend survey we reported on last month. ….To
repeat…..The Segal 2010 trend survey pegs PPO trend at 10.6% without Rx.
Dental PPO is at 5.5% with indemnity dental at 6.2%. Rx trend is 9.1% and HMO
trend is 10.2% with HDHPs at 11.9%. Segal’s survey numbers regarding HDHP’s
would seem to be more reflective of the actual leveraging of trend in HDHP
plans. Expect to see trend numbers go up due to mandated benefits such as mental