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

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&S Benefits Consulting 219 Darien, Dundee, IL 60118 Phone: 847-428-5353, Fax:847-428-9876,

Email: jseiler@ssbenefits.net IF YOU WOULD RATHER RECEIVE THIS VIA E-MAIL !!!!

Volume 3 Issue 6-Street Talk June, 2001 Issue

If you receive this newsletter via email, you received two special editions in May. One outlined the frequency of large claims over certain amounts that can be expected. The other outlined survey results for how large employers are reacting to the rising costs of health care. If you are a fax recipient, you can still receive these issues by signing up for our email version of this newsletter.

HCA Hospitals are pushing back on managed care companies and is raising rates by 6% to 8% for insurers this year. Prestigious hospitals such as Evanston- Northwestern are demanding over 16%.

Cigna Healthcare is moving some 15,000 people covered by itís commercial HMO for smaller employers into a new plan that wonít cover treatment at some prominent hospitals such as Evanston, Northwestern Memorial and Rush-Pres-St. Lukes. The new HMO will still have 54 hospitals, including University of Chicago Hospitals. Resurrection Health (six hospitals) is dropping out of all of Cignaís HMOs. This is as a reaction to not being included in the new network (due to rates).

Interstudy Publications says that last year HMOs lost more than 700,000 members, or .9% of enrollment. Benefitnews.com reports that among 408 of the Fortune 500 polled, the number of companies that pay 100% of employee premiums has dropped 50% since 1994.

AIG is agreeing to buy American General. Principal has announced plans to demutualize. Anthem BC/BS and BC/BS of Kansas are affiliating and Anthem will own them. The Kansas company will also become a stock company, joining the IN, KY, OH, CT, NH, CO, NV and ME Blues Anthem companies. BC/BS of New Mexico has been acquired by the Illinois Blues.

Aetna is dropping its commercial HMO in St. Louis. Coventry has agreed to take over the contracts for those members.

According to a report by the National Center for Policy Analysis, government mandates increase the price of insurance by 15-30%, pricing people out of affordable health care. In 1965 there were only 8 insurance mandates. Today there are more than 1,000, with 600 introduced since 1997. Mandates cover treatments ranging from acupuncture to hairpieces. Infertility treatments, which are mandated in Illinois as well as other states, cost $2.6Billion in 1996, the last year for which figures are available. One in ten couples need medical intervention to conceive. Of those who pursue treatment, 65% have babies. 37% of those who have babies have multiple births (31% twins and 6% triplets or more). At least lawmakers in 3 states are considering a moratorium on mandates in NC, AL and PA.

Cigna is being sued in Illinois by physicians in a nationwide lawsuit for doing their job of combining, replacing and dropping CPT codes that are billed under the PPO. Bundling and denying upcoding by doctors is what saves customers money that is created by these overbilling practices. However, the docs say thatís not part of their Cigna contracts.

According to EBRI, despite rising benefit costs, employment based health coverage for those under 65 have increased to 73.3% of working adults and 61.5% of children. Between 1998 and 2000 the percentage of small firms offering health benefits increased from 54 to 67%. A Consortium survey of more than 100 adults say that 45% would prefer better benefits to a pay increase. The number is 54% for those over age 45. Employees also said they would pay up to $35 per month more to keep their Rx drug cards.

EBRI reports that stop loss premiums are increasing an average of 30% to 50% this year. That means some plans are getting 100%.

Wellpoint, a Blues company, is petitioning the FDA to make Claritin, Allegra and Zyrtec over the counter drugs that would not be covered by health plans. No others have joined the petition, though they back it. UHC estimates that even if the petition is successful, drug costs would still rise by 10-12% this year without those drugs.

The arrogant, overcharging First Health Company has made yet another move, agreeing to buy CCN from HCA. We will expect this move to cause TPAs to stop using CCN, since they donít want their data available to a competitor such as First Health.

If you enjoy this newsletter we hope you keep us in mind for your group benefits needs. Choosing to use S&S Benefits Consulting will not disrupt current arrangements in place for your employees, but our services will most likely save you money and help reduce your legal exposure on your health and welfare plans.