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

Medco has found that the increase in pediatric prescription drug utilization was almost four times that for the general population. Driving utilization is the increase in diabetes, antipsychotic and asthma drugs for children. In its 2009 data, Medco found that 25% of children and nearly 30% of adolescents (10-19 years old) took at least one prescription to treat a chronic condition. About 13% of the drug dollars spent on children was for ADHD. Specialty pharmacy costs also hit double digit growth at 14.7% and caused drug trend to increase by 3.7%. Diabetes is the largest driver of drug trend and represents 16.7% of all growth in drug spending.

Brokerage firm Edward Jones says that U.S. health insurers are not worth the long term investment risk in the wake of healthcare reform. The firm downgraded the ratings of the three largest health insurers it covers  (UHC, Aetna , Wellpoint) to “sell” from “hold” and will stop covering the companies.

Eighty-four percent of U.S. employers expect to revisit their health insurance strategy this year in the wake of health reform. Nearly 49% of small employers (less than 500 employees) and just 25% of large employers expect cost increases due to health reform. Twenty percent of employers overall were considering eliminating their health care benefits. The survey of 459 employers was conducted by Fidelity. 

A Hewitt survey of 466 companies representing 6.9 million employees showed that 72% of companies surveyed expect to lose grandfathered status because of health plan design changes while 39% also said that contribution changes could cause the loss of grandfathered status. Of self-insured plans, 51% expect to lose grandfathered status in 2011 and another 21% expect that will happen in 2012. Figures were similar for fully insured plans in terms of expectations. Overall, 90% of employers expect to lose their grandfathered status by 2014.

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A study by Weiss Ratings of 543 health insurance companies found that companies complying with health insurance regulations regarding loss ratios as part of health reform had net profit margins averaging 0.7%, while those not yet complying had net profit margins of 6.3%. Starting in 2011, the reform will require individual and small group insurers to spend at least 80% (large group insurers-85%) of revenue on claims or efforts to improve quality of care. Defining those loss ratios has been a bone of contention between insurers, regulators and the NAIC (National Association of Insurance Commissioners). In any case, since net profit margins overall averaged 2.2%, and the weakest of the insurance companies are the ones closest to compliance, it appears the new regulations will be driving the most profitable companies to the same weak status as those companies that are now compliant. That does not bode well for the future of private fully insured programs.

No surprise that the COBRA premium subsidy doubled enrollment in COBRA during the economic recession as more employees lost their jobs according to a Hewitt survey of 200 companies.. Before the subsidy, 19% of employees who lost their jobs at companies surveyed applied for COBRA. When the subsidy was in force, 38% chose to enroll in COBRA.

A CNN poll shows that 56% of Americans oppose the health overhaul law, unchanged from polling last March. Assurant Health announced the layoff of 130 employees as a direct result of Obamacare. Kaiser reported that of all the pooled plans for the uninsured created as part of Obamacare, a total of 2,400 people have applied for the state plans operated by the federal government and 1,200 have applied for plans run by the states themselves. Not exactly a success.

The Obama administration has shorted the acronym for the PPACA to just ACA (Affordable Care Act). Did they give up on patient protection?

The National Business Group on Health says that in 2011, 63% of employers will ask for greater employee premium contributions, 46% will raise out of pocket maximums, 44% will raise deductibles in-network and 40% will raise out of network deductibles.