S&S Benefits.....Opinion, 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, Aetna 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 worker’s 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. Obama’s 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 don’t take it. Another 19% earn more than 300% of the federal poverty level ($58,000 for a family of four in 2005), but don’t 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 that. Surprised?

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 2008.

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 wellness programs.

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 arthritis.

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.