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

S&S Benefits Consulting, Inc.  219 Darien , Dundee , IL 60118   Phone: 847-428-5353, Fax:847-428-9876

Email : jseiler@ssbenefits.net                                               http://www.ssbenefits.net/   November 2008 Issue


A reminder: Before November 15th itís time to make sure that Medicare eligible participants receive their notice as to whether or not their employer plan drug coverage counts as creditable coverage under Medicare Part D.

A survey from Grant Thornton found that 55% of surveyed CFOs say their major concern is the pricing pressures presented by employee benefits. Energy pricing was second with 40% expressing concern. Interesting from a political standpoint was that 65% of CFOs say CEOs are overpaid, but just 24% believe their own CEO falls into that category. It is always the other guy.

If nothing else, we noticed during the debates that neither candidate has a clue as to how medical coverage really works and what kind of cost impacts are involved.

The Mercer survey of 3,418 employers on health costs included 545 firms that donít offer health benefit. Forty-three percent of the employers that do not offer health plans said cost was the primary reason; 59 percent of the same group of employers said they were willing to contribute between $0 and $50 per employee per month for health benefits. Further, 49 percent of respondents said they werenít at all likely to begin offering coverage within the next three years.

According to a new report from the Center for Studying Health System Change (HSC), the primary driver of health system costs is technological development. Innovations in medical devices, drugs, equipment and surgical procedures are the major drivers of health costs. The fact that expensive procedures and technology are located at most hospitals rather than sharing of the technology between hospitals seems to promote overcharging. According to the study, the excess of technology promotes low utilization of the technology available at each site, thus driving up cost.

The latest tracking poll from the Kaiser Family Foundation found that one in three Americans say their family has had problems paying medical bills in the past year, and nearly half say someone in their family has skipped pills or postponed medical care because of the cost. This is not surprising as part of the growth of the use of high deductible plans to control employer costs. Some other surveys have mentioned this trend and at least one carrier has admitted to us that their data is showing the same trend.

The BCBSA 2008 CDHP Member Experience Survey (undoubtedly used to promote these plans) found that 72% of members track their health expenses compared to 40% of those in non-CDHP plans. That may make sense in view of the above Kaiser study. In addition, 38% of CDHP members estimate future medical expenses compared to 22% for non-CDHP members. CDHP members also participate more in wellness programs and use more preventive program services. This is also not surprising since many CDHP members are healthier than those who join other plans. Milliman just released a study that said that CDHP plans achieve an average of 4.5% savings when experience is adjusted for age, gender, area and health of those who participate.  Of the savings, only 1.5% are due to CDHP mechanisms, while 3.3% of the savings would have been achieved anyhow due to the switch to a higher deductible.

Americans with diabetes nearly doubled their spending on drugs for the disease in just six years with the bill climbing to $12.5 billion.  Nearly 24 million Americans (8% of the population) have Type 2 diabetes. Current guidelines say doctors should prescribe metformin for an approximate cost of $30 per month, but more doctors are prescribing Avandia which costs about $225 a month. Avandia has been used by more than 7 million patients.

In an effort to encourage fuel-free commuting, the recently enacted Emergency Economic Stabilization Act (EESA) includes a provision allowing fringe benefits for bicycle commuters. Under the act, employers may provide tax-free reimbursement of up to $20 a month to employees for qualified bicycle commuting expenses. Allowed expenses include 'reasonable expenses incurred Ö for the purchase of a bicycle and bicycle improvements, repair and storage' if the bicycle is regularly used for a substantial portion of the employees' commute to work. Whatís next?