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

Why be like everyone else?

Volume 1 Issue 1-Street Talk October 30,1998

Halloween Benefits Horrors

The number of carriers you can consider for coverage has diminished again, thus limiting competition for your health care dollar. Customers seem even more upset than normal at the servicing provided by the larger survivors of mergers, but the smaller players keep selling out. Recently weíve seen two smaller players pull in their horns. Reliastar (the old Northwestern National) sold their ASO business to Trustmark. CNA has announced the sale of their less than 500 employee business to American Medical Security (a virtual non player in the 100-500 EE marketplace). Meanwhile, rumor has it that Principal has sold their Chicago area business to American HMO, a local south side HMO. This should be interesting as Principal was still struggling to emerge from what appears to have been an ill fated acquisition of the FHP business that had acquired Great Lakes HMO. Of course, earlier this year Aetna bought NYLCare. At least one major player (Prudential) is cited as being up for sale(weíre sure you heard this elsewhere too) in the Sept.21 edition of Managed Care Week and rumor has a different mutual company buying a shell stock company and moving their group employees to that company (a precursor to sale if there ever was one).

Who would have "THUNK" it? Seniors have claims! Is it really a surprise that major HMO players are backing out of the Medicare risk market in certain areas. Weíre not talking small fries here either. UHC, Pacificare, Aetna, Humana and the list goes on are pulling out of various markets. Why?..because the reimbursement rates couldnít possibly pay for their care. Is this now the coming of age and the real reason why HMO rates are going up all over? Is it because HMOs now have some of the less healthy bodies (and not just seniors) instead of just skimming off the young and healthy? The Jackson Hole group would never say so, but thatís our opinion.

Group health profits declined another 20% in 1997 after a 64% decline in 1996 according to Weiss Ratings Inc. Any more rate questions?

Hospital costs for 23 suburban facilities were recently surveyed by Data Advantage Corp. and outlined in a local paper. The three highest were GlenOaks, Hoffman Estates and St. Joseph in Elgin. The three lowest were Delnor, Northwest Community and Lake Forest. Check out those discounts on your health plan. Does it really help if you have only a decent discount at a high cost hospital? Kind of like wondering what you get for those capitations in your HMO....seen any data lately,... or with your renewal?

The 10/26 issue of Business Insurance has an article about 400 doctors walking out of the Aetna HMO in Texas with the dispute centering on lack of information. The dispute could displace as many as 30,000 patients according to the article. If you have EEs in an Aetna plan in Tx, you may want to view this article.

Crainís recently had UHCís HMO division losing $3.4 million in the first half of 1998 and dropping 17.5% in membership. However, no figures are revealed for the Open Access product which is essentially a PPO...even though nobody likes to admit it for fear of revealing the failure of HMOs to get more marketshare in Chicago.

Now we are hearing of other carriers offering an open access POS plan. Gee, we think this sounds a lot like a PPO. Do you?

Fewer doctors are being punished for fraud according to a recent study conducted by the Coalition Against Insurance Fraud and article in BI. For the 12 states in the study there was no medical board punishment for 57.4% of the 251 convicted providers. Apparently, many convictions are not reported to medical review boards and the boards say they are under the impression that they donít (they do) have authority to punish docs for fraud convictions. Docs watching docs is kind of like tort reform. Does your claim payor flag and report fraud? Perhaps it would be good to ask.

Illinois Insurance department complaint ratios for 1997 are out. The study is usually interesting. For instance, The JC Penny Life Ins. Co. was 3rd best in group accident and health? We didnít have them listed as a market, but maybe we should review their Style.

S&S Benefits Consulting is a partnership of benefits professionals with over 50 years in the health and welfare business. We specialize in the group business and donít try to sell you services where we have no expertise. If we canít help you, chances are, we know who can.

Call us at 847-428-5353 , fax us at 847-428-9876. Please e-mail us at jseiler_ssbenefits@interaccess.com to receive this newsletter via e-mail. We would prefer e-mail distribution to fax. Thank you!