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
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,
, Wellpoint) to “sell” from “hold” and will stop covering the companies.
Eighty-four percent of
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
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.