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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/   January 2008 Issue


What is the cost for caring for the uninsured? In California , the Terminator, Schwarzenegger says private payers are handing over 6 to 11% more in premiums in order to cover the uninsured. However, David Kessler, a professor at the Stanford Business School says the cost is only a 1.4% increase in private payer premiums, while uncovered MediCal and Medicare expenses cost private payers a 10.8% increase between 2000 and 2005.

Buck Consultants study of health care costs put 2008 increases at 10.75% for PPO, 11.14% for HMO and 10.54% for POS, with consumer driven plans at 10.36%. Their predictions came from a survey of 79 health insurers, TPAs and HMOs. Rx costs are predicted to increase by 11.68%.

Data from the 2005 Insurance Component of the Medical Expenditure Panel Survey showed that 97.5M of the 112.2M employees in the private sector worked in firms where the employer offered health insurance. 61.1M were enrolled. In plans requiring a deductible, the average annual amount of $446 in 2002 rose to $652 in 2005, with employees of smaller firms less than 50 employees) much more likely to have higher deductibles. Family deductibles went from $958 in 2002 to $1,232 in 2005.

The Agency for Healthcare Research and Quality reports that hospital bills increased by about 90% from $462B in 1997 to $873B in 2005. Medicare was the top payer in the time period.

The small business lobbying group that was big in derailing the Hillary health plan in the early 1990s is again gearing up to fight government imposed obligations on small employers. The National Federation of Independent Business says it has 350,000 members and lobbyists in 50 states. They have issued a statement of principles that “a health care system built on employer mandates or on play-or-pay taxes is unacceptable.” “We are opposed to payroll taxes,” said Susan Eckerly, a VP for the federation. “They are the number one job killer for the small business owner.” A separate Mercer survey found that both small and large employers were skeptical about play-or-pay. Mercer found that only 23% of small employers and 25% of large (over 500 employees) employers supported play-or-pay proposals.

The authors of an article on disease management (DM) programs for the American Journal of Managed Care (December 2007) found that in analyzing 317 separate studies of the programs, there was no conclusive support for either improving health outcomes or saving money with DM, once the cost of the programs was factored in. However, the study only reviewed medical and Rx costs, but not the impact on other indirect costs of DM participants (productivity and performance impairment costs for patients with chronic conditions).

PwC research indicates just 6% of respondents to it’s 2008 consumer survey are willing to pay anything close to the $4,479 average annual cost of single coverage, with 54% saying they are willing to spend less that $500. 25% of respondents are willing to pay between $500 and $1,000 for coverage, while 14% say they would spend between $1,000 and $2,500 annually for coverage. So it appears that after all the hoopla and hullaballou over HSAs and consumer driven plans, the bulk of the public has an unrealistic view of how much health care coverage actually costs, or at the very least, is not willing to pay.

Gail Boudreaux has left her post as EVP of external affairs at HCSC, the parent of BCBS of IL. She declined to say whether her resignation was related to last month’s promotion of Patricia Hemingway Hall to president and COO of HCSC.

From the U.S. Department of Labor’s Bureau of Labor Statistics survey of 108 million worker and 8,000 firms: 71% of workers have access to medical plans vs. 61% for retirement plans. 75% are required to contribute to the cost of single coverage with the average monthly employer premium of $293.25. Only 13% of employees receive full employer paid family coverage. Employee average cost is $312.78 for family coverage with the employer paying $642.02 in addition to the employee share. Only 39% of employees have access to a STD plan with almost all those that do have access taking the plan. 31% of employees have access to LTD coverage with 95% of them taking the coverage. Just more than 50% of employees have access to life insurance coverage with 96% of those with access taking the coverage. About 77% of workers have an average of 8 paid holidays per year and 77% of employees have paid vacations.