Hearsay & News Review
In a PricewaterhouseCoopers study of 135 top executives
for employers of over 9,000 employees, 87% wish to continue employer-sponsored
health insurance even though 43% said their profits suffered as a result of
health care costs. Sixty-two percent said those who lead unhealthy lifestyles
should pay more for premiums.
Athenahealth, Inc., a provider of payment software and
services to doctors ranked UnitedHealth Care last in average time to pay claims
at 38.3 days. According to the WSJ,
ranked first at 29.8 days. United says it pays 95% of its claims within 10
days. Somewhere there appears to be a disconnect
on the timing issue.
Senator Teddy Chappaquiddick and Representative John
Dingell introduced companion bills to provide all Americans a choice of Medicare
or the Federal Employee Health Benefits plan. According to the Urban Institute,
the net additional cost of universal coverage ranges from $70 to $138 billion.
While employers now spend an average of 13% of payroll to cover their workerís
medical plans, the bills proposed are projecting a new payroll tax of 7% by
business and 1.7% by workers as employers roll their workers into the plan.
Apparently there is another disconnect
between what the Urban Institute says the current cost is and what Teddy C. and
the Dingell man are proposing as funding. But
never fear, there is another plan.
Barrack Obama has joined the fray and said his plan for universal coverage would
save the average consumer $2,500 a year. How? Well, as usual, he is short on
details. Obamaís plan retains private insurance, but injects additional money
from employers and money from not renewing current individual tax cuts (so how
does that save consumers money?) for expanding coverage. Huh? One wonders why
politicians think that universal coverage will somehow make medical care cost
less, or do they? Are they really that foolish, or just saying what they think
will help their cause? Again, somewhat of a disconnect.
Reality loses again.
While the politicians wail about the subject of the 46.1
million uninsured, they conveniently ignore the Kaiser Family Foundation stats
that a quarter of those uninsured are eligible for public assistance, but
donít take it. Another 19% earn more than 300% of the federal poverty level
($58,000 for a family of four in 2005), but donít purchase insurance.
Sixty-three percent of workers have an employment based plan while 17% have
coverage as a dependent. So, how big is the problem? How much of the problem is
from illegal aliens? Do taxpayers want to provide health coverage to illegal
aliens? Nobody (except us) is talking about those two issues in the same
paragraph. Even if we take care of those problems and provide all this coverage,
what will make the cost of medical care go down? No politicians are addressing
As noted last month, Mutual of Omaha has stopped selling
some fully insured plans, but they have clarified that they remain committed to
the employer market and will continue to sell stop loss insurance.
The IRS has announced 2008 HSA limits. The maximum
contribution employees can make is going from $2,850 to $2,900 for single and
from $5,650 to $5,800 for employees with family. Out of pocket costs (including
deductibles) will rise to a maximum of $5,600 for singles and $11,200 for family
coverage. Deductible minimums remain the same as 2007 at $1,100 single and
$2,200 family. Catch up contributions for those age 55 and older rise to $900 in
An Aon survey of 2,000 employers indicates 23% are
offering CDH plans, up from 13% in 2006. Also, 18% are promoting health and
productivity to employees, 18% offer disease management and 15% are implementing
Milliman says that the average total medical spending for
a family of four in 2007 under a PPO plan reached $14,500, an increase of $1,118
over last year. On average, employers pay $8,909 of total medical costs and
employees pay $5,591 made up of $3,171in payroll deductions and $2,420 in
copays, deductibles and coinsurance (for those three combined).
Medco says an aging population and rising obesity rates
are expected to push spending on diabetes medications upward by 16% to 20%
annually as use increases by 8%-10%. Specialty drug costs grew by 16.1% in 2006
and accounted for 10.4% of all pharmacy spending. However, overall drug spending
grew by only 2.6% in 2006 largely because of the increased use of generic drugs
and changes brought on by Medicare Part D. The AHA reports that 25% of Americans
over the age of 65 will have diabetes by 2030 and more than 26 million will have
Some interesting disability stats:
Just 39% of 2.1 million workers who applied for Social Security Disabled
benefits were approved in 2005. 90% of all disabling accidents are not work
related. 43% of all 40 year olds will suffer a disability of at least 90 days
prior to age 65, 50% of all mortgage foreclosures are due to disability and 17%
of all personal bankruptcies are due to unexpected illness or injury.
Shameless Plug for S&S-As you can see, we will give
you our honest opinion.
If you read this newsletter
you have an idea of the personalized approach we take to your business. If you
are not receiving the personal service your company deserves, consider calling
on S&S Benefits Consulting, Inc. to help with your health and welfare plan
needs. Weíll analyze your plan from top to bottom and give you ideas to
build upon in planning for the future.