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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-December 2006 Issue

We hope that all of our readers had a great Thanksgiving! In view of the fact that our next issue may not be published until after January 1, we would also like to wish everybody a Happy New Year and Merry Christmas, Happy Hanukah or holiday of your religious choice. You may note that this issue is a combined Nov.-Dec. issue. For that reason we went a little over the normal one page per issue maximum. That’s simply because the author was not able to publish November on a timely basis. By way of a short explanation, there was an issue that enabled a sampling of the U.S. medical care system and there was more than the usual reason to be thankful on November 23rd.  Many thanks to everyone who knew and expressed their support.

A Hewitt survey of 400 major employers predicts cost increases of 7.7% for 2007 to an average cost of $8,340 PEPY. Last year’s survey by Hewitt predicted a cost increase of 2% more than actually occurred for these major employers. Let’s hope they are overestimating by 2% again this year. Meanwhile PWc predicts that PPO costs will rise by 11.9% and CDHP plans will increase in cost by 10.7% in 2007.

Target has followed Wal-Mart into the $4 per generic script arena. The publicity surrounding these scripts is somewhat misleading since it has become known that there are only just under 300 generic drugs involved out of several thousand available. In addition, the list includes generics for such drugs as amoxicillin, where there are actually 12 generic substitutes available that are all on the same list. The actual number of unique generics on the list is estimated to be approximately 150. Once again, like most healthcare issues touted in the press, the hype is much greater than actual substance.

BCBS of Il is proposing legislation that all employers must offer group health coverage, even though the employer will not be forced to contribute. Under the law, all commercial insurance carriers would be required to offer insurance to these groups of 2-50 workers. Mandated benefits would not be required. Apparently, all insurance companies would be forced to eliminate their employer contribution requirements which are normally intended to eliminate anti-selection.

Al Lewis of the Disease Mgmt. Purchasing Consortium says that firms of less than 5,000 employees cannot accurately even begin to calculate an ROI on disease management.

Aetna has announced Ronald Williams as Chairman of the company effective October 1st after the retirement of Executive Chairman John Rowe.

The U.S. Treasury Department has released the 2007 indexed amounts for Health Savings Accounts. For 2007, the minimum annual deductible is $1,100 for single or $2,200 for family coverage. The maximum annual HSA contribution is $2,850 for single or $5,650 for family coverage. The maximum annual in-network, out-of-pocket amount is $5,500 for single or $11,000 for family coverage.

The EBRI 9th annual health confidence survey shows that most employees rate the health care system as fair (28%) or poor (51%). Just to add some perspective, these same employees rate their own situation as extremely satisfied (18%), very satisfied (36%) or somewhat satisfied (35%). Seventy-five percent of workers say they would prefer $6,700 in health care coverage over $6,700 in salary. A study by McKinsey & Company reveals that only 44% of consumers with HSA-linked benefits were as satisfied with those plans as they were with their previous (more generous?) plans.

The group, Citizens for Economic Opportunity, has filed suit against Aetna and their mini-med subsidiary SRC in Connecticut , alleging that the mini-med plans are misleading.

CVS and Caremark have announced plans to merge. One is reminded of a previous merger of a pharmacy chain (Rite-Aid) with a PBM (PCS) that eventually broke. It is ironic that PCS eventually became part of Caremark.

WebMD is purchasing Chicago based Subimo LLC, which provides on-line health information tools.

After fighting in the press, United Healthcare and HCA Corporation have announced a new agreement through 2011. By nature of the announcement, we think they are about to declare each other “best buddies” despite the strong arm negotiating tactics used by both sides in the past months. It reminds us of the new bi-partisan attitude everyone is now promising in Congress after two years of attack ads.

Only 28% of United States PCPs use electronic medical records and more than 40% say it is difficult or impossible for them to identify a patient who is overdue for a test or preventive care. This compares to 19% of doctors in other countries, according to a study by the Commonwealth Fund. The study suggests that part of the problem is that there is no national IT plan in the U.S. and that the U.S. has a less social approach to medicine.

While 90% of employers with a Section 125 plan offer FSA’s, 73% of those report that less than 39% of their population participates in a health care FSA and less than 9% participate in a dependent care FSA. Sixty-two percent of employers reported that less than 7% of those using FSA’s forfeited any money in their healthcare FSA and less than 5% forfeited any money in their dependent care FSA.

Researchers at the University of Chicago polled 1,500 Americans about health insurance issues. One interesting finding was that more than 75% of the people without health insurance reject the idea of mandating the purchase of health insurance coverage. Overall, 28% of people are supportive of a system which charges more for health care coverage to those with unhealthy behavior.

A survey by Watson-Wyatt says that 71% of employees believe that pay is a top reason to consider employment elsewhere, but only 45% of employers believe that to be the case. 86% of companies believe they do a good job of treating employees well, but only 55% of employees agree.

A survey by Eastbridge Consulting shows that women are more likely to purchase voluntary insurance products than men. Supplemental products are most attractive to those employees who are age 30 to 49. The most popular supplemental benefits are life (24%) and disability (20%) followed by accident and hospital indemnity (15%) and cancer/critical illness (12%).