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

Ohio became the 21st state to join a legal challenge of health reforms led by Florida. In total, 26 states have challenged the law. Georgia, Wyoming, Kansas and Wisconsin also requested to join the Florida lawsuit. Today, January 31st, the court struck down Obamacare and called the whole law unconstitutional. We wish it would end here, but the issue will, most likely go before the U.S. Supreme Court.

A survey from the BLS shows that only 5% of private industry employees and 11% of government employees have to pay a portion of their life insurance costs. Forty-two percent of private full time employees had LTD insurance compared to 39% for full-time state and local government workers.

Blue Shield of CA has stunned individual policyholders with rate hikes as high as 59%, with the average being 30%-35%. CA law requires that insurance companies spend at least 70% of their premium dollars collected on claims, or the rate increases requested can be blocked. Blue Shield claims that despite the increases, they would lose “tens of millions of dollars” on their individual business.

As of December 3, HHS had granted 222 waivers to health plans that did not meet the requirement that plans spend 85% of premium on medical expenses. 43 of the waivers were for unions. As of January 26, the waivers granted had climbed to 733 affecting 2.2 million enrollees. Of those, 182 were for union plans with the largest for the United Federation of Teachers Welfare Fund in New York with 351,000 enrollees. Another group receiving significant favors is the AARP. According to an article in the WSJ, AARP provided a large chunk of the $121 million spent on TV ads supporting Obamacare plus they spent $21 million on lobbying in 2009. However, the HHS proposed regulations issued on Dec. 21^st exempted AARP’s lucrative “Medigap” plans from rate review and other mandates. AARP is also exempt from the law’s $500K cap on executive compensation for insurance executives and exempt for the 85% medical loss ratio requirement.

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House Republicans have voted for repeal of the health reform law, but Harry Reid has resisted attempts to bring the issue to a vote in the Senate. The U.S. Chamber of Commerce has sided with Republicans on the issue.

In the meantime, Queen Sebelius is out promoting her health reform baby by saying that the ACA will lead to great savings for families. In 2014, a family of four with an income of $33,525 can save as much as $14,900 per year with tax credits and reduced cost sharing.  As a friend of S&S pointed out, this is excellent news! If the average family premium is $24,000 a year in 2014, the tax credit gets them to a cost of $9,100, which is only 33% of net take home pay. Add such expenses as co-pays, deductibles, rent, food, clothing, car payment, cell phone and cable TV and you’ll be doing just fine(sic). Will that family buy health insurance, or just pay the penalty of $95 per person per year? Thank you Queen Sebelius!

A Buck survey of wellness plans shows that the average incentive offered to employees was $220, up from $169 in 2009. The internal additional costs were $187 plus vendor fees of $122 per employee. Sixty –two percent of U.S. companies surveyed provided some form of wellness program using incentive rewards or penalties.

Moody’s Investors Service reports a negative outlook for the medical insurance industry due to medical loss ratios requirements of Obamacare, a stagnant economy and increased medical costs, in part due to Obamacare. According to HHS, the nation’s expenditures on health care in 2009 grew by 4%, but spending on Medicaid soared by 9% and health care costs accounted for 17.6% of GDP.

Guardian Life Insurance Company has become another victim of health reform. The company has announced its withdrawal from the health insurance business with UHC looking to renew that business. Just another reduction in competition in the sector which could used increased competition instead of consolidation.