S&S Benefits.....Opinion,
Hearsay & News Review
A Towers Watson survey of 661 HR and benefits
specialists indicates that 90% believe Obamacare will increase their
organizations health care benefits costs and 88% intend to pass those cost
increases on to employees. Where are the national press reports on this?
Hewitt surveyed 501 large employers and 77%
said they will wait until they are required to comply with offering continued
coverage until age 26 for adult children.
Meanwhile, medical costs continue to increase.
A survey of The Council of Agents and Brokers indicates that 86% of accounts
with less than 50 employees had increases in premium, with over 50% of the
increases in the 11% to 20% range. For accounts from 51-500 employees-93%
received increases with 58% of all accounts receiving increases in the 6% to 15%
range. For accounts with over 500
employees, 51% saw increases of 6%-15%. The most popular method of mitigating
the increases was to change plan designs. PwC Health Research is predicting
medical costs to increase by 9% in 2011. They say the majority of Americans will
have a health insurance deductible of over $400, 42% of employers will be
increasing employee contributions for health coverage, 41% of employers will
increase deductibles and coinsurance, while 26% of employers will increase cost
sharing for prescription drugs. Drug cost increases are expected to be tempered
in 2011, when the world’s best selling drug (Lipitor) becomes a generic.
As part of Obamacare, a $5 billion reinsurance
pool was to be created to reimburse age 55 and older non-Medicare retiree claims
at 80% for claim amounts between $15,000 and $90,000. Although the funding for
the program was to terminate in 2014, EBRI estimates that half the funds will be
gone before the end of 2010 and that the program will be out of money in 2011.
We’d be surprised if it lasts that long.
If we wish to look to the
future of medical coverage under the PPACA, look to MA for a very similar
structure. Although the uninsured rate of the state is only 4.8% due to the
laws, the MA Division of Insurance rejected 235 of the 274 rate increases
requested by insurance companies. Costs have not been under control and the
state will not allow insurers to raise rates. Blue Cross of MA reported a 1st
quarter net loss of $65.2million, with 55% of that said to be due to lack of
adequate premium increases on state plans. The carrier expects to lose $20
million per month. Look for insurers to be pulling out of
Massachusetts
in the near future. Can you say harbinger?
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newsletter, please email jseiler@ssbenefits.net
Although the HHS has yet to
issue regulations on exactly what the Madame Czar Sebilius deems to be essential
health benefits, they have said that annual dollar limits on those
“essential” benefits may not be less than $750,000 for plan years beginning
on or after 9/23/10. In 2011 the limits cannot be less than $1.25 million and
for plan years beginning on or after 9/23/12 the limits cannot be less than $2
million.
The AMA, which sold it’s
soul to Obamacare and actually only represents 18% of doctors, released a
scorecard on insurance company payments. They say the seven largest insurance
companies ((UHC, Humana, Anthem, Cigna, HCSC (BCBSIL-NM-TX), Aetna,
Coventry
)) only pay one in 5 claims correctly. Regardless of the AMA credibility
regarding these processes, it appears a good TPA is a better bet for claim
processing accuracy.
HM Insurance Group has
acquired the $100 million stop loss insurance block of Mutual of Omaha.
The Council on Disability
Awareness says that the leading cause of disability was musculoskeletal and
connective tissue disorders (26% of LTD claims in 2009). Cancer was the second
leading cause at 15%. 41% of LTD carriers experienced increasing claim durations
and a record 627,000 disabled individuals received disability payments in 2009.
Happy Independence Day!!!
God Bless
America
!
Have a safe holiday!
