Hearsay & News Review
Watson Wyatt survey says that employers are reluctant to outsource several
core human resources responsibilities. Sixty-six percent of 135 firms
surveyed keep their HR tasks in house. Less than 1/3 outsource some functions
and only about 7% say they mostly outsource. From the press on outsourcing a few
years back, it seemed unlikely that such results would be possible. Will
something similar happen to the latest hot press subject?
Blue, the HMO subsidiary of BC/BS of
and thus Anthem/Wellpoint, has announced an agreement to purchase Atrium Health
Plan out of
. The Atrium HMO served about 52,000 people in
reports that mid-tier brokers Mesirow, Hub (Mack and Parker) and Acordia are now
targets of the contingency fee crackdown. The article reports that the three
mid-tier brokers refuse to follow the giants in not accepting contingent
arrangements. The article reported that it’s unclear as to whether there will
be any litigation in the matter. A.J. Gallagher agreed to a $27M settlement with
the state of
on the same matter and then promptly launched a number of people from their
uninsured pay for about 1/3rd of their care from doctors and
hospitals according to the Families USA consumer group. The remaining costs are
estimated at $43 Billion in 2005. Family costs for private insurance are
estimated to include an extra $922 per year to cover those costs for the
uninsured. For individual coverage, the estimated cost included to subsidize
care for the uninsured is $341 per year.
a related matter, immigrants accounted
for just over 26% of the uninsured population in the
in 2003, up from 19% in 1994. EBRI noted that immigrants accounted for
1/3 of the increase in the uninsured population from 1994 to 1998, but 86% of
the increase from 1998 to 2003. There were 11.6 million uninsured immigrants in
2003, compared to 6.9 million in 1994, a 68% increase.
BLS reports that health care costs rose 7.5% in 2004, compared to 11.4% in 2002.
It depends on who is reporting as to what statistics say. The Centers for
Studying Health System Change reported that health cost rose 8.2% in 2004, the
same amount as they reported in 2003. Aon reports that specialty pharmacy
costs will rise 22.5% this year compared with a 13.1% increase in overall
pharmacy costs. Specialty costs represent about 5% of pharmacy spending.
Specialty drugs include drugs for such diseases as anemia, cancer, multiple
sclerosis and rheumatoid arthritis.
surveyed 421 benefit agencies and found that they are also being squeezed by
the same benefit costs that affect the employers they represent. Compensation
and benefits costs account for 55%-60% of firm expenses and 75% of the firms
require employees to contribute to their health care premium.
Term Care insurance continues to struggle as a viable product. Nationwide,
about 362,000 individuals bought new policies in 2004, down about 38% from the
year 2000. Companies have increased prices substantially as they try to figure
out how to make LTC a viable product. Since 2000, half of the top companies that
sold the product have stopped new business sales. Some of those that have
stopped include CNA, Aegon (Transamerica), Fortis and TIAA-CREF. More strict
underwriting is being used to improve profitability, which in part has been
affected by lower than expected lapse ratios.
survey by Aon showed that 43% of the 205 companies they surveyed already offered
wellness plans. Participating benefit managers report that they often have
trouble persuading employees to participate in the programs. Twenty-five percent
of the employers reported that they ran into resistance from more than half
their employees. The top reasons for non-participation were “Not sufficiently
motivated” and “too busy.” You can lead a horse to water, but you can’t
make it drink.
from the article on our website, we have another good article detailing the network
discount shell game. Email email@example.com
for a copy.
usually use any extra space in the newsletter to rant about something that
bothers us in the benefits business. It’s summer though, and with the better
weather our mood is better, so we’ll take at least this month off.