S&S Benefits.....Opinion,
Hearsay & News Review
Unicare has announced it is
pulling out of the commercial health insurance markets of
Illinois
and
Texas
. For
Illinois
group plans, coverage will be offered for similar plans at similar rates by
Blue Cross Blue Shield of Illinois. For individual coverage, BCBSIL is offering
similar coverage and rates with no medical underwriting if individuals accept
the offer from BCBSIL prior to Tuesday, December 1st. Unicare is
owned by Anthem/Wellpoint (also a Blue Cross company). Since Unicare was thought
to be profitable, this deal with BCBSIL looks to us like an agreement between
the two Blues giants to stay out of each other’s markets. Unfortunately, that
means fewer reasonable alternatives for coverage in
Illinois
and
Texas
. With the market share BCBSIL has in
Illinois
and their lack of accountability to anyone, it would be no surprise if their
next move is to shed the brokers who have been sponging off the Blues override
programs and rarely looking for viable alternatives for their clients.
According to Towers Health
Cost Survey, employers will see medical benefit expenditures increase 7% in
2010, pushing the average PEPY medical cost to over $10,000. Employers will
continue to fund 78% of the cost of benefits in 2010. The survey data includes
300 of the nation’s largest employers, which cover 5.2 Million employees and
their dependents. The Cadillac health plans tax proposed in the Senate would
mean that more than 50% of the employers surveyed would be paying that tax in
2013.
A Hewitt survey said group
health care costs increased an average of 6% to $8,607 PEPY in 2009 and they are
forecasting PEPY costs of $9120 in 2010. That survey covered 325 large
employers. HMO costs rose 7.4% to $8,869 while PPO costs rose 5.2% to $8,264.
According to the
Thomson/Reuters VP of healthcare analytics, the
U.S.
system wastes between $505 and $850 Billion every year. Just wait until the
government gets a hold of it! According to the study, paper based medical
records accounts for 6% of the waste. Unnecessary care and overuse to protect
against malpractice exposure makes up 37% of the waste. Fraud makes up 22% of
the waste and medial mistakes account for 11%. According to a recent 60 Minutes
report, Medicare fraud costs up to $60 Billion a year.
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So the government and Medicare
are the poster boys for controlling costs? The basic Medicare premium will
increase next year by 15% to $110.50 a month while Medicare continues to
reimburse at rates below costs, which shifts even more cost to the private
sector.
A Grant Thornton survey
released recently says that fully 77% of senior financial executives are most
worried by employee benefits costs.
The Commonwealth Fund released
a state by state (plus
Washington
,
D.C.
) scorecard of avoidable hospital use and costs. According to Crain’s,
Illinois ranked 49th among states on avoidable use and costs,
followed by New York and Louisiana and 44th on a score that measures
how well hospitals deliver basic care that avoids later complications.
While proposing plans for
health care reform, our Senate and House have put forth bills that they say will
increase the coverage for health care and wellness, insure more people and which
will not increase costs. How absurd is that? If every insurance company
representative could sell “more coverage for a better price”, they would be
the wealthiest salespeople in our nation. While releasing these new plans, no
major news source has noticed that the government’s recent Generic Information
Nondiscrimination Act (GINA) basically cripples employer attempts to use
wellness programs and disease management programs to control costs. Basically,
any health risk assessment or disease management program that takes into account
family medical history is not allowed to be used to provide better benefits or
penalize an employee.
A recent analysis by the
Associated Press showed that the “massive” profits enjoyed by the insurance
companies in 2008 were 2.2%. Meanwhile, the insistence in the House and the
Senate for a public option promises that costs will be driven even higher while
politicians use doublespeak to describe cost savings (that will be made up of
fines and taxes) that will come from their proposed programs. They hide Medicare
cuts that will further drive up costs in the private sector while reducing the
already few number of doctors who accept Medicare reimbursement levels. They
have ignored the CBO estimate of a savings of $54 Billion by introducing tort
reform, simply because the majority of the politicians are lawyers. There is
absolutely nothing that we have seen in these programs that will control costs,
while we have yet to discuss the constitutionality of the fines that would be
imposed for not purchasing health care coverage. Simply stated, this is a sad
state of affairs.