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

Why be like everyone else?

A Spencer survey says that COBRA costs continue to exceed active employee costs by 50% in 2001. 10.2% of employees and dependents became eligible for Cobra and 16.2% of those eligible signed up.

The Kaiser 2002 survey is out. Average PPO cost was $3,119 per year single/$8037 family. HMO was $2,764 single/$7541 family. Workers contributed on PPO $432 single/$2,152 family per year. HMO was $455 single/$1,960 family per year. 88% of firms with 25-49 workers offered health coverage, 96% for firms of 50-199 and 99% of firms with 200+ workers. Only 5% of employees were enrolled in indemnity coverage in the survey. Premiums increased by 12.7% on average for 3,262 surveyed companies composed of over 300,000 employees. The average individual PPO deductible was $276. The number of companies with three tiered drug plans (as opposed to two) rose from 29% to 57%. 17% of covered workers are in firms that offered employees a lower level of health benefits than last year.

A Hewitt survey of 528 employers found that 82% of employees ranked health benefits as the most important benefit (outscoring compensation by 2 to 1).

Empire BC/BS of NY has filed plans to sell stock to convert to for profit status. Michigan has signed a law barring BC/BS in MI (the largest non-profit BC plan) from becoming a for profit company.

A survey of 686 Wisconsin employers shows that only one was considering dropping health benefits. The majority of companies still pay 70-90% of premium costs for their employees.

Unions reacted in anger when NW Airlines said the company would require employees to pay 20% of their healthcare premiums. The company is trying to save money to stay in business, but the unions don’t understand.

According to the AMA, more than 350 mergers and acquisitions have occurred between insurers. The Dept. of Justice has announced plans to scrutinize future mergers that the DOJ says threatens competition. No kidding.

The US dept. of HHS says that medical malpractice is driving up health costs, adding $90B to $170B to payments for public and private healthcare. Less than 30% of all the money docs pay in liability insurance fees goes to patients in settlement. Lawyer fees account for 40% or more of multi-million dollar payouts.

Microsoft is dropping Aetna for their 34,000 employees, but Aetna says new accounts Tenet Healthcare and 7-Eleven have been added. Microsoft is changing to local carrier Premera Blue Cross.

The standard mileage rate effective January 1, 2003 is down from 36.5 cents per mile to 36 cents. Medical mileage is reduced from 13 to 12 cents and moving mileage is the same as medical.

Premiums for the Federal Employees Health Benefits Program are increasing an average of 11% for the 188 plan choices for 9 million members (after a 13.6% increase this year). HMO increases of 13.6% are driving the average.

The New York Business Group on Health is bestowing a leadership award on the founder of MultiPlan. This is funny since MultiPlan is a company most disliked by providers for using blind (and in some states illegal) PPO arrangements.

Take a look at funding for consumer driven health plans and what the government calls PHAs. 50% of employees spend less that $150 per person on health costs or 3% overall. According to a Mercer study 5% of workers generate 53% of the cost. That means an employer who chooses CDH would be funding Personal Care Accounts on 50% of the employees who cause only 3% of the cost. Now there’s a sales point!

In Chicago, Advocate is squaring off with the Blues on healthcare reimbursement for their doctors. The two arrogant giants will most likely reach an agreement, but Advocate planned to notify the Blues of termination on September 30^th, effective January 1, 2003. That could send patients scrambling to replace one of Advocate’s 1400 doctors. Advocate controls 15% of the local market through their 10 hospitals, including Lutheran General. In the meantime, BC/BS has announced that many Advocate Medical groups will no longer be available for new members of the Blue Advantage plans as of September 1^st and those medical groups will not be in the Blue Advantage HMO as of January 1^st.

Because Senator Paul Wellstone of MN was so concerned that employers were cutting retiree costs, he introduced legislation that would stop employers from making changes to contributions or benefits that would limit retiree coverage. The man is such a genius that he does not realize that many employers would completely eliminate their retiree benefits before the legislation could ever pass, just to insure not being saddled with a burden that might put them out of business entirely. Then the retirees affected will really want to rally to Senator Wellstone's cause, won’t they?

Watch out for the fruits and nuts in CA. They will be leading the charge across the nation with the latest in paid FMLA leave. A bill has been signed into law that will provide workers with paid time off to care for sick relatives or stay home with a new child. It will be funded by employee contributions to the worker’s compensation fund beginning Jan. 2004 with benefits of roughly 55% of salary up to $728 per week available July 1, 2004. At a cost to worker checks of about $2.75 per week, it will be interesting to see how long before the fund goes broke.

We can’t figure it out. The government says it will be offering PPO alternatives to normal Medicare. They say they will reimburse the PPOs for any losses. That in itself is interesting because PPO’s don’t insure risk. Obviously, something is missing from the articles covering the subject. Here’s another puzzle. Medicare already has the lowest reimbursement rate around. Most PPOs base their reimbursements on a percentage of Medicare (higher). Therefore, how can offering higher reimbursement result in lower Medicare costs? Sounds like something maybe Wellstone dreamed up?