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

The summer solstice is almost here. We hope you are enjoying the longer days and warm weather.

Rumors continue to swirl about the sale of PHCS. The latest has MultiPlan buying the largest proprietary PPO network in the country. MultiPlan was purchased in April by The Carlyle Group, a global private equity group. MulitPlan made a name for itself and eventually became accepted by starting out primarily as a silent PPO network.

A Kaiser report states that the average person pays 35% of their medical costs out of pocket, with the balance paid by insurance. Rx represents 43% of those expenses while office visits account for 26% and dental expenses are 17% of the out of pocket costs. The 5% of Americans with the highest spending account for about 49% of total health expenditures and the old 20%/80% rule still applies according to KFF. Total U.S. health expenditures are $2.16 trillion this year, with per person spending at $7,110 and projected to hit $12,320 by 2015.

A new Robert Wood Foundation report shows that among workers who were eligible for employer sponsored coverage, three million fewer enrolled in the coverage in 2003 than in 1998. Although premium increases accounted for much of that drop, the average premium share paid by employees remained at 18% from 1998 to 2003.

The U.S. Supreme Court has upheld subrogation rights of insurers/fiduciaries of health plans under ERISA to seek reimbursement from patients who have collected from a third party. The case was Sereboff v. Mid Atlantic Medical Services, Inc.

Aetna has announced the launch of a business unit-Advantus- to provide products and services to TPAs, insurance companies and regional health plans. Companies acquired over the past two years by Aetna such as HMS HealthCare, PPOM, Sloans Lake , Mountain Medical Affiliates, ProNet and Flora will become part of Advantus, which will have operations in Michigan , Colorado , Texas , Connecticut and Maine .

Finally a quote from someone who understands health costs. Deborah Chollet, an economist at Mathmatica Policy Research is noted in the Milwaukee Journal Sentinel as saying that health insurance will not be more affordable until hospitals and doctors become more efficient, providing better care at lower cost. How unique is it in today’s market to point to health care costs as being the cause of the reflective costs of insurance?  We think it is very unique. Of course, personal responsibility for one’s own health is also a source of costs of treatment.

More news from the Watson survey: 72% of individuals have healthcare costs of less than $1,500 per year. Twenty –four percent of individuals have costs ranging from $1,500 to $9,999. Four percent of individuals have costs of over $10,000. Claims of over $10,000 accounted for 49% of health care costs in 2004. Claims from $1,500 to $9,999 accounted for 40% of costs and claims of less than $1,500 accounted for 11% of health care costs. Will this information burst the CDH bubble? We doubt it.

The Hartford recently became the number one seller of new group short and long term disability insurance according to the 2005 market share report issued by LIMRA International.

A new study by the Commonwealth Fund reveals that two out of five working age Americans with incomes between $20K and $40K were uninsured for at least part of the past year. Of the estimated 48 million working age uninsured Americans, 67% were in families where at least one person was working full-time.

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STREET TALK-WHY BE LIKE EVERYONE ELSE?