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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/   October 2012 Issue


The Institute of Medicine reports that it estimates the U.S. health care system wastes $750 billion a year (30% of every medical dollar) through unneeded care ($210 billion), excess administration ($190 billion), fraud ($75 billion), inflated prices($105 billion), inefficient delivery of care ($130 billion) and prevention failures ($55 billion). Due to some overlap in categories the estimated number came to $750 billion.


EBRI reports that overall satisfaction increased among CDHP enrollees from 37% to 52% between 2006 and 2009, but dropped back to 46% in 2011. Traditional plan satisfaction was 57% in 2011. The higher rate of satisfaction corresponded to lower out of pocket costs. An Aon Hewitt survey showed that in 2011, 58% of employers offered a CDHP and only 38% of employers offered HMOs. PPOs continue to be most popular, with 79% of employers offering a PPO plan. In the CDHP category, HSAs are offered 34% of the time. HRAs are offered in 18% of CDHP plans. Thirty four percent of employers offering HSAs contribute to the program on behalf of their employees.


The latest Kaiser health plan survey is out. Average annual single premiums were $5,615 with employees paying $950 (17%) of the cost. Family premiums were $15,745 annual with employees paying $4,300 (27%) of the cost. Thirty-four percent of workers were in plans with annual deductibles of at least $1,000 for single coverage. The survey included more than 2,000 large and small employers. Sixty percent of workers are in a self-funded health plan.  Early responses from Mercer's survey of health plan benefits suggest the average per employee cost will rise 6.5% in 2013.


The number of uninsured  Americans under age 65 fell from 49.2 million in 2010 to 47.9 million in 2011 according to the U.S. Census Bureau.


A judge in Michigan ruled that BC/BS-MI engaged in self-dealing when it unilaterally calculated and collected access fees to their network. The fees were hidden in hospital claim charges.


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Oh, that part about not taxing anyone making less than $250,000. Forget about it. Congressional budget analysts are now saying that nearly 6 million people will pay a tax penalty for being uninsured once PPACA is fully in place. The average penalty will be $1,200 according to CBO analysts.

A new report from the Health Cost Institute has concluded that medical spending for consumers with employer plans went up by 4.6% last year to $4,547 per person largely due to provider prices rising, rather than utilization of services increasing.

Some panic is beginning to set in regarding a little known PPACA provision that will burden insurers and self-insured plans to fund a $20 Billion reinsurance program over three years to offset risk in the individual medical insurance market once insurers are required to offer coverage to all,  regardless of health status. Some consultants are estimating costs of $60 to $100 per insured life. Insurers can pass along the costs, but self-funded plans have no stake in that market and no way to recover costs. Like most of PPACA, it makes little sense to have insurers fund a program for a market they already participate in, but this is little more than highway robbery for self-funded plans. HHS wants to makes the assessment in 2014, but has yet to detail how it will be charged or how much the charge will be. We are not sure where the consultant estimates come from, since HHS has not been forthcoming (as usual).

The policy group Trust for America's Health says that obesity could add $48 to $66 billion to health care cost and says that 44% of all U.S. adults could be obese by 2030.

The BLS reports that employer provided benefits costs for workers in private industry averaged $8.52 per hour worked in June 2012, accounting for 29.6% of total compensation costs, which averaged $28.80 per hour worked.  Paid leave averaged $1.97, insurance benefits averaged $2.34 and retirement and savings averaged $1.02, with legally required benefits averaging $2.37.

The IRS has released guidance as to how to measure the number of full-time employees at an employer for purposes of PPACA. It's nice to know that the guidance is only 18 pages long. And to think you thought you knew who your full-time employees were. How silly of you.

More from the Kaiser survey: PPO coverage average cost was $5,850 for single and $16,356 family. HMO average costs was $5,668 single and $15,729 family. High deductible plans costs average $4,928 single and $14,129 family. Naturally, premium costs were highest in the Northeast and lowest in the South.