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

As PPACA moves on, more employers are bailing out of fully insured plans for partial self-funding. Why? If PPACA reaches full implementation, community rating, minimum loss ratios required by law, state premium taxes and state mandates will continue to drive up costs, leaving little flexibility for employers. Insurance carriers are purchasing TPA's to gain the flexibility needed in the self-funded market and stop loss carriers are offering lower specific stop loss levels to accommodate smaller employers. The percentage of smaller employers using partial self-funding is up to 58% from 44% in 1999.

The Texas Department of Insurance applied for relief from PPACA loss ratio rules and was denied by HHS. This was in spite of the fact that of the 34 Texas carriers subject to the law, 23 will pay rebates based on 2010 data based on the 80% Medical Loss Ratio (MLR) rule. The rebates would absorb the net underwriting profit for the entire individual market-effectively putting the insurance carriers out of business. Not surprising-since that is the intended end result of PPACA.

Consider the HHS approach at telling insurance companies their rates are out of line when they increase by 10% or more. Then consider this: As part of defense cuts ordered by the Obama administration, the Tricare health program for uniformed members of the armed services and their families will be increasing premiums. Significantly, the plan calls for increases between 30 percent to 78 percent in Tricare annual premiums for the first year. After that, the plan will impose five-year increases ranging from 94 percent to 345 percent—more than 3 times current levels. They expect that this will drive many members into the state exchanges.---Below is the response from an interested party when we emailed this information to him. We thought it was worth sharing.

Damn those greedy, for profit Insurance companies gaining dollars on the backs of the sick and ill.  Someone call Kathleen Sebelius and have her people call out these monsters for their greater than 10% rate increase request.  We’ll show them to be the blood sucking, heartless, SOBs that they are and …………….What?  These are Obama government officials?  Are they raising rates on our military people and on our public aid recipients?  Oh, not the public aid recipients, just the military people who go into harm’s way for us.   They want to drive them into the State Exchanges where they, the younger members, will pay a higher premium rate than actuarially called for so that they can subsidize the older and unhealthy participants.  Well, isn’t that patriotic on their behalf.  Well, I guess they should be somewhat used to it as war is hell, and so is the new Obama healthcare program.   

If you wish to be added or removed from the distribution of this newsletter, please email jseiler@ssbenefits.net

The National Federation of Independent Business on behalf of its 350,000 members is joining 26 state governments as co-plaintiffs in the PPACA case before the Supreme Court.

Blue Cross of Nebraska has administered the Nebraska state employee medical program for  at least 25 years. Effective July 1, the state is switching to UHC, citing an expected savings of $8 million per year. Blue Cross is protesting and claiming UHC will actually cost the state $10 million, since UHC excluded claims over $75,000 and MNSA claims from its discount guarantees. Ah, the old game of who has better discounts. In our opinion, it's liar's poker.

In other Blues news, a circuit court jury has ordered BCBS Michigan to pay the city of Holland $1.6 million for wrongfully charging it excess fees as part of the medical plan. The jury said the Blues fraudulently concealed a 13.5% access fee on city employee claims for 14 years. The Blues say they will appeal. It is reported there have been at least 30 cases filed against the Michigan Blues about the fees.

A survey of 10,000 consumers in January covered 13 health plans. Kaiser was the only plan to receive an "okay" rating. Every major health carrier received a "poor" rating.  That is just another reason to self fund with an independent TPA to pay claims since their model is based on service.

In the continuing saga of the constitutionality of requiring coverage of contraceptives costs by those religiously opposed to it, a federal judge declared a Washington state rule requiring pharmacists to dispense emergency contraceptives against their beliefs to be unconstitutional.

In 2010, Wisconsin got $73 million from the feds to run their temporary high risk pool. It was estimated 8,000 people would apply, but only 1,100 have. That's a good thing, since the program is expected to run out of money in 2014 with only that small enrollment. It seems those enrolled have higher costs than expected. Imagine that. Low cost insurance for those with pre-existing conditions and they are surprised by the adverse selection. Duh?