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

Why be like everyone else?

Aetna can’t seem to make up its mind. After earlier announcing that it would concentrate on their old market of self-funded groups of 300 employees and up, the company has now announced a suite of new products (with several HMO and PPO plan options) for groups with less than 50 eligible employees. Although the rollout is initially in CA, FL, NY, PA and TX, the product will be rolled out nationally through 2002. Aetna did not say if it planned to scale back their earlier announced commitment to the self-funded market.

According to the Bureau of Labor Statistics, employer’s health costs rose 10.5% last year to $4,891 per employee/year. PricewaterhouseCoopers said the cost increase was 13.7% in 2001. The increases, according to the AAHP were 22% from Rx, medical devices, and medical advances; 18% from provider expenses; 18% from medical inflation; 15% from demand; 15% from government regulations; 7% from lawsuits and 5% from fraud and abuse. Hospital charges grew by 2.5% nationally. There are over 1,500 mandated benefits in federal and state laws.

The WPPN network has purchased the HCN network in Wisconsin. This is basically the merger of a large network with minimal discounts (WPPN) with a small network with good discounts (HCN). The result should be interesting.

Moody’s has cut Conseco’s debt ratings and warned that the company may be forced into bankruptcy.

Cigna’s announced financials for its healthcare operations reveal flat membership enrollment and lower income from one year ago.

New York has added infertility treatment (not including in vitro fertilization) to its mandated benefit list as of Sept. 1st. Vasectomy reversal is also not covered, but drug therapies and Rx for infertility will be covered. Th law applies to 21-44 year olds.

Wausau Benefits is spinning off its pharmacy unit to try to sell services to other TPAs.

Word on the street says that Hewitt’s Sageo experiment for outsourcing has turned into strictly an FSA operation.

The National Assoc. of Dental Plans says that total enrollments in DHMO’s is declining while DPPOs are gaining to the point of being even with indemnity coverage in enrollment.

We wish this would happen nationally. Georgia is set to order to all HMOs that they must reveal their payment schedules and method of calculating the payments to doctors in their programs. We are interested in unlocking the profit pockets within the capitation system. Meanwhile, the AMA is heralding the decision as a victory, but misinterpreting the action as meaning that downcoding and bundling will cease. All this tells us is that the AMA is in favor of upcoding and unbundling procedures in order to charge more. The truth is revealed, but the press fails to understand or question the statements of the AMA.

Oklahoma has announced that they will allow insured small business pools in the state. The pools must be composed of at least 200 employees from businesses with no more than 100 workers. The state should have a lot of fun trying to regulate the pools. Such pools have always attracted their share of shady practices.

An Aon survey reveals what is important to 1800 employees surveyed. In order of importance: Medical insurance, paid vacation and holidays, employer-paid pensions, retirement savings plans, Rx coverage, dental, choice in benefits (cafeteria plans), Short term disability insurance, Long term disability insurance, preventive care. Flextime and daycare were further down the list.

We recently took the time to review a few Long-Term Care (LTC) policies and found the coverage differentials and prices very similar. It seems almost all LTC insurers say that they have never raised rates for existing policyholders, while we do know that rates have been raised for new policies issued. The statistics cited in the marketing materials say that 2 out of 5 people will end up needing LTC. Given the low prices we looked at for the coverage, we wonder how the carriers offering the coverage will survive with LTC costs currently at $45,000 to $55,000 per year. The premiums couldn’t begin to equal the claims for the three-year Average claim period. Financial stability and length of time in business of the carrier chosen would be our first priority in recommending a carrier for either an individual or group product. Even then, we view the future of this coverage with uncertainty at today’s pricing. By offering LTC to employees on a voluntary basis, the Feds have pretty much stated that there are no plans to make this coverage part of Medicare.