S&S Benefits.....Opinion,
Hearsay & News Review
Well that “hope and change” thing called
health reform just ain’t working out so well. Principal announced on 9/30/2010
that they are pulling out of the medical plan business. By our count, that is 49
medical insurance companies (see the list at http://www.ssbenefits.net/Ins.Co.Out%20of%20Business.pdf
) that we can recall that have gone out of business in the last 20 years
because the medical business is so profitable. UHC is taking over the renewals
for Principal.
Humana has exited the business of writing
child only insurance coverage and Anthem has suspended their offering of that
coverage due to health reform. UHC’s Golden Rule subsidiary is also reported
as pulling out of the child only market. As insurance companies are squeezed by
health reform they are finding new ways to lower costs. Humana is canceling the
appointments of insurance agents who do not meet minimum production standards.
Blue Cross of IL has announced that non-contracted providers will be reimbursed
at a pre-determined percentage of Medicare reimbursement rates. They also
suspended new business and renewal quotes for a time, in response to threats
from the Queen of health reform.
Yes, Queen Sebelius has threatened insurance
companies that blame part of their rate increases on health reform (proving that
the truth is not good enough). Basically, she has said she is going to put them
under a microscope and possibly not allow them to be part of the health
insurance exchanges she is building (that is, if there are any companies left
after this law is fully implemented, but she hasn’t figured that part out
yet). She also penned an op-ed in the WSJ that basically blamed the rising cost
of insurance on insurance companies (not the cost of medical care), showing that
she probably earned her dunce cap before she went to
Washington
when she was just the
Kansas
insurance commissioner.
If that wasn’t enough, Sens. Baucus and
Rockefeller on Sept. 20th sent a letter to insurers demanding more
transparency in the calculations of premium increases. They also threatened them
if they made “false statements” about the effect of health reform on
premiums. The letter went to Cigna,
Aetna
, Wellpoint, UHC and BCBSIL (Health Care Service Corp.). These are the same
people who passed a bill using incorrect assumptions for costs (and as one
person put it, they probably couldn’t balance their checkbook, much less
understand a calculation of renewal
costs) according to the CBO.
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Health reform has not
increased consumer confidence. Are we surprised? Eighty-eight percent of those
surveyed in the 2010 Health Confidence Survey were extremely, very or somewhat
satisfied with their health coverage. However, down from last year’s 59%, this
year only 52% of individuals with employment based coverage were confident that
their coverage with the employer would continue.
In a survey of 325 mainly
self-funded employers, Hewitt found that medical plan costs (equivalent premium
costs) are projected to rise 8.8% to $9,821 PEPY on average. PPO costs are
projected at $9,408 PEPY. Employee premium contributions average 21.8% of total
premium. Additional out of pocket costs for copayments, etc; averaged $1,934 (up
11.6%). In a Mercer survey, employers expect their medical plan costs to rise by
10.1% in 2011 and 47% of those plans surveyed are expected to lose grandfathered
status in 2011 in order to make cost effective changes. Both surveys show that
employers are expecting cost increases due to health reform. We are not sure if
Queen Sebelius will write the employers a threatening letter also, since she
can’t blame insurance companies for self-funding costs going up. Perhaps
she’ll threaten Mercer and Hewitt for reporting on costs, or just let lap dogs
Baucus and Rockefeller write the letters, since they have nothing else to do.
The Heritage Foundation reports that the Queen has a lot of power though. In the
2,700 page bill, there are over 1,000 instances where Congress granted the Queen
the power to regulate the health care industry.
A UBA survey of 17,655 plans
with 12,316 employers found that the average rate increase last year was 7.3%
and that PPO’s have 63.9% of all enrolled employees. CDHPs cover 15.4% of
employees and now surpass HMOs (13.6%). A Kaiser survey of 2046 firms showed the
average single premium to be $5,049 with employees contributing $899 a year. For
yearly family coverage the average premium was $13,770 with employees
contributing $3,997. Twenty –seven percent of employees were enrolled in a
plan with a deductible of $1,000 or more, up from 22% last year.
The Obama administration
reports that nearly 2,000 employers and unions have been accepted into the $5M
Early Retiree Reimbursement Plan which reimburses high dollar claims on early
retirees. That fund should be gone soon. Your taxes at work.
HAPPY HALLOWEEN!!!