March 21, by Leila Morris
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EMPLOYEE BENEFITS
• Employers Don’t Plan to Reduce Benefits
• Americans Value Vision Health, But Still Delay Care
EVENTS
• Conference on Healthcare Consumerism
• Medical Travel Conference
HEALTHCARE
• Employer-based Health Coverage Expected to Decline
• Senate Bill Could Roll Back Consumers’ Health Insurance Savings
• Health Reform Not Expected to Have a Big Effect on Employer Coverage
• Annual Growth Rates Decelerate for Healthcare Costs
• Pro-Life Group Files Suit Challenging HHS Mandate
• Medicaid Patients Have Trouble Getting Emergency Care
IN CALIFORNIA
• Group Mobilizes Against State Mandate
• Sterling Offers Medicare Supplement Policies in California
• Free Mental Health Resource for California Seniors
NEW PRODUCTS
• Retirement Services
• Hearing Service Discount Plan for Employer Groups
Employers Don’t Plan to Reduce Benefits
Regardless of company size, only about 10% of employers plan to reduce employee benefits, according to a survey by MetLife. Ninety-one percent of those that see opportunities to leverage their benefit programs say they feel strongly that benefits can be used to retain employees, 86% say that benefits can greatly increase employee productivity, and 80% say that benefits can greatly help attract employees.
Anthony Nugent, executive vice president of MetLife said, “The workplace has changed rather dramatically since MetLife began doing its annual Study of Employee Benefits Trends.” Ten years ago, many Baby Boomers were planning to retire at age 65, Gen Y workers were just entering the workplace, and communication vehicles like Facebook and Twitter didn’t exist. But, employers’ top benefit objectives have remained consistent.
But, when it comes to employers and employers, there is a disconnect about what benefits are valuable. While 66% of the employees say that offering health benefits is an important way to drive their loyalty, only 57% of employers believed so. The divide widens when it comes to retirement and non-medical benefits. For instance, 59% of employees said retirement benefits are very important in influencing loyalty toward their employer, but only 42% of employers realized this. Fifty-one percent of employees said the same for non-medical benefits like dental, disability, and life insurance, while only 32% of employers thought so. Sixty-two percent of employers agree that employee-paid benefits will become a more important strategy in the next five years. The survey also revealed that, compared to Baby Boomers, younger workers are more concerned about having a secure retirement.
One in three people would like to work for a different employer in 2012, but that number climbs to one in two for Gen Y employees. Not too surprisingly, people who say they hope to be working elsewhere are nearly three times as likely to admit to a decrease in the quality of their work. Conversely, the percentage of employers who say they have a very strong sense of loyalty towards their employees has grown to 59% in 2011 – a seven-year high. Fifty-eight percent say that offering benefits is an important way to increase retention. This view is most prevalent among Gen Y (63%) and Gen X (62%) workers.
The study highlights a correlation between benefit satisfaction and loyalty. Sixty-one percent of employees who are very satisfied with their benefits say they feel a very strong sense of loyalty to their employer compared to 24% of employees who are very dissatisfied with their benefits. A copy of the study is available at www.metlife.com/benefitstrends.
Americans Value Vision Health, But Still Delay Care
Eighty-five percent of Americans recognize that managing their vision health right now means that they will have less to worry about in the future. But one in five Americans delayed their annual eye exam because they were too busy, according to a WellPoint survey. This is a concern because a routine eye exam can help detect serious health conditions, such as diabetes. In fact, 89% of Americans surveyed know eye exams can detect such chronic illnesses.
Half of Americans who participated in the survey say, at times, they feel overwhelmed by their daily to-do list. Half of those surveyed say they wish health professionals were available to help them keep their health on track. More than half say they wish it was easier to make vision care a priority in their lives. And nearly half wish they had more help managing their daily life, including their health. Forty percent say they wish there were more resources to help them manage their busy schedule. For more information, visit www.wellpoint.com.
Conference on Healthcare Consumerism
The Institute for HealthCare Consumerism’s Forum will be held April 12 to 13 in Atlanta and Sept. 6 to 7 in Las Vegas. This year’s event focuses on preparing businesses to transition smoothly to cost-effective consumer-driven plans while complying with the Patient Protection and Affordable Care Act (PPACA). For more information, call 404-671-9551 or e-mail rochelle@kenotype.com.
Medical Travel Conference
The Well-Being and Medical Travel Conference will be held June 19 to 21 in Scottsdale, Ariz. The conference will cover health, wellness, and medical tourism opportunities. For more information, visit www.well-beingtravelconference.com or contact Debbie Press at 888-854-0339 or dpress@well-beingtravel.com.
Employer-based Health Coverage Expected to Decline
Between 2007 and 2010, the share of U.S. children and working-age adults with employer-sponsored health insurance dropped from 64% to 54%, according to a study by the Center for Studying Health System Change (HSC). The study was done for the National Institute for Health Care Reform (NIHCR). The study authors say that employer-sponsored insurance is likely to continue eroding with or without health reform, especially for lower-income families and those employed by small firms.
HSC’s Chapin White, Ph.D. said that the core threat to employer health coverage is the fact that healthcare costs are increasing faster than wages. Well before the start of the Great Recession in December 2007, a steady decline of employer health coverage was underway with fewer firms offering coverage and fewer workers taking up coverage, which is likely because of rising healthcare costs, the study found. While overshadowed by the massive employment loss, declines in access and take up each explain more than 10% of the total drop in employer coverage between 2007 and 2010.
However, the only statistically significant decline in employer health coverage, between 2007 and 2010, was among those in working families who were employed by small firms with fewer than 100 workers. They experienced declines in coverage from 51% to 45%. In addition, employer coverage dropped from 42% in 2001 to 24% in 2010 for children and working-age adults with incomes below 200% of poverty ($44,100 for a family of four in 2010).
The authors note that the health reform law targets the young adults, low-wage workers, and those employed by small firms who are falling out of employer-sponsored insurance and provides an alternative place for them to get health coverage. For more information, visit http://www.nihcr.org/Employer_Coverage.html.
Senate Bill Could Roll Back Consumers’ Health Insurance Savings
Reprinted with permission from http://www.propublica.org
This summer, health insurance companies may have to pay more than a billion dollars back to their own customers. The rebate requirements were introduced as part of the 2010 healthcare reform law and are meant to benefit consumers. But now an insurer-supported Senate bill aims to roll back the rebate requirements. Known as the medical loss ratio rule, it’s actually pretty simple. Under the health-care law provision, 80 cents to 85 cents of every dollar insurers collect in premiums must be spent on medical care or activities that improve the quality of that care. If not, they must send their customers a rebate for the difference.
The goal, according to the Department of Health and Human Services, is to limit the money insurers spend on administrative costs and profit. “It essentially ensures that consumers receive value for every dollar they spend on healthcare,” HHS spokesman Brian Chiglinsky told ProPublica. Last month, Sen. Mary Landrieu, D-La., introduced a bill that would change what costs companies can include in the 15% to 20% they are allotted for overhead, salaries, and marketing. The bill, similar to a House bill introduced in March 2011 that has yet to come up for a vote, focuses on payments to insurance agents and brokers. Traditionally, these commissions are bundled into the administrative costs when making the final calculation. But insurance regulators have argued that fees paid to insurance agents and brokers shouldn’t count.
Such a change could mean big savings for insurance companies and much smaller rebates for consumers. This is the first year that companies are required to send out rebates. According to a report by state insurance commissioners, if rebates had been handed out last year, insurers would have had to pay consumers almost $2 billion. If they had carved out the broker fees, as proposed in the two current bills, consumers would have gotten only about $800 million. Landrieu’s office did not immediately respond to our call for comment. “[The bills] would water down the standard to a point where it becomes ineffective,” said Sondra Roberto, a spokeswoman for the nonprofit advocacy group Consumers Union. The group, which also publishes Consumer Reports, recently urged members to oppose the bill.
The rebates have gotten relatively modest attention. Only 38 percent of the public is even aware of the rule’s existence, according to a Kaiser poll. Insurance companies have supported the two bills, claiming that the rebate rule, as it stands now, stifles jobs and actually drives up insurance premiums. A 2011 government report found that most insurance companies were, in fact, lowering their premiums to meet the requirements, as the administration had hoped. While most insurance companies hit the 80 to 85 percent target, the few that didn’t may be required to send out rebates this year.” Some insurance companies pay an inordinate amount, as much as 40 percent, on administration and profit and not health care,” Roberto said.
The rules on rebates differ slightly depending on whether the insurance comes from a large-group plan (employers with more than 100 employees), or a small-group or individual plan. In each case, insurance companies will be required to make all their costs publicly available so consumers can see how their premium dollars are spent. The government granted insurance companies in seven states extra time to meet the requirements.
Insurers that serve states with more rural populations, for example, tend to have higher overhead costs and cannot meet the requirement as easily, according to Eric Fader, a New York health-care lawyer. But the government decided that for all other states, enforcing the requirement wouldn’t pose any risk to the market, and that the federal government didn’t “need to coddle an inefficient insurance company,” Fader said.
Health Reform Not Expected to Have a Big Effect on Employer Coverage
The Affordable Care Act (ACA) will only lead to a small reduction in the number of people receiving employment-based health insurance, according to a report by the Congressional budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT). Researchers say that it is unlikely that we will see a sharp decline in employment-based health insurance as a result of the ACA. Some observers have expressed surprise that researchers don’t expect a much larger reduction given the expanded eligibility for Medicaid and the subsidies for insurance coverage purchased through health insurance exchanges that will result from the ACA.
Their estimates take account of those factors, but they also recognize that the legislation leaves in place some financial incentives for employers to offer coverage and creates new financial incentives to offer coverage. Despite the care and effort that CBO and JCT have devoted to modeling the health insurance system and the provisions of the ACA, they concede that there is tremendous uncertainty about how employers and employees will respond to the new law.
Annual Growth Rates Decelerate for Healthcare Costs
The average per capita cost of healthcare services covered by commercial insurance and Medicare programs increased 5.21% over the 12-months ending January 2012. This was a decline from the 5.30% annual growth rate posted for December 2011, according to the S&P Healthcare Economic Composite Index.
David M. Blitzer of S&P Indices said, “Healthcare costs’ annual growth rates decelerated modestly in January. The fall and early winter of 2011 [were] highlighted by a general upward trend in healthcare costs…This month’s data, which was through January 2012, showed a modest deceleration in most types of healthcare costs, but not by enough to show any reversal of this trend. Over the past six months or so, annual rates of change in per capita healthcare costs were generally rising.”
The following compares healthcare cost increases for December 2011 and January 2012:
Healthcare costs covered by commercial insurance plans
7.05% January
7.11% December
Medicare claim costs
2.40% January
2.52% December
Professional Services Index
5.13% January
5.37% December
The Broad Hospital Index
5.03% January
4.99% December 20111
Professional Services Medicare Index
3.32% January (a two-year low)
3.73% December
Hospital Medicare Annual Growth Rate
1.56% January
1.48% December
The Professional Services Commercial Index
6.02% January
6.15% December
Hospital Commercial Index
7.84% January
7.85% December
For more information, visit www.healthcareindices.standardandpoors.com
Pro-Life Group Files Suit Challenging HHS Mandate
The American Center for Law and Justice (ACLJ) filed a federal lawsuit against the Department of Health and Human Services (HHS) on behalf of a Missouri business owner who says that the HHS contraceptive mandate violates his constitutionally protected religious beliefs. The lawsuit for a permanent injunction prohibiting the HHS from requiring those with religious objections to abide by the mandate. Under the mandate, employer-based health insurance must include coverage for contraceptives, sterilization, and abortion-inducing drugs.
The lawsuit marks the first legal challenge to the HHS mandate from a private business owner. Until now, only religious organizations or institutions have brought lawsuits challenging the mandate. For more information, visit www.aclj.org.
Medicaid Patients Have Trouble Getting Emergency Care
A study published in the Annals of Emergency Medicine reveals that, compared to people with private insurance, Medicaid beneficiaries have more barriers to getting timely primary care and they have higher emergency room utilization (40% versus 18%). Expanding Medicaid eligibility may not be sufficient to improve healthcare access. Overall, 16% of Medicaid and 9% of private insurance beneficiaries faced at least one barrier to timely primary care. For more information, visit http://www.annemergmed.com/article/S0196-0644%2812%2900125-4/abstract.
Group Mobilizes Against State Mandate
The group, Californians Against Higher healthcare Costs, is fighting the health insurance rate regulation ballot initiative proposed by Consumer Watchdog. The Coalition says the measure will create a costly new bureaucracy and give one politician nearly total control over healthcare coverage and prices, leading to higher rates and less access to care for consumers.
Early opponents of the proposed initiative include the California Medical Association, California Hospital Association, California Association of Physician Groups, California Chamber of Commerce, California Association of Health Plans and Association of California Life and Health Insurance Companies.
James Hay, M.D., president of the California Medical Association said, “This misguided measure will cause higher rates and lessen access to care, which is why doctors, hospitals, and healthcare providers oppose this measure. The new state bureaucracy…[would] limit access to patient care and do nothing to address underlying drivers of healthcare costs.”
C. Duane Dauner, president/CEO of the California Hospital Association said, “One of the biggest drivers of increasing insurance premiums stems from the chronic underfunding of the Medicare and Medi-Cal programs. When government programs fail to pay the actual cost of caring for their beneficiaries, hospitals and other providers must shift these unreimbursed costs to private insurers, which drives up premiums. This initiative does not address governmental payment shortfalls.”
Consumer Watchdog recently launched an effort to qualify the measure for the November 2012 statewide ballot. The group must collect more than 500,000 registered voter signatures by early May. Attempts to enact similar legislation failed in the Legislature four times in the past four years. For more information, visit www.StopHigherCosts.com.
Sterling Offers Medicare Supplement Policies in California
Sterling Insurance is now offering Medicare Supplement policies to California residents. Sterling Medicare Supplement policies are underwritten by Sterling Life Insurance Company. California residents have the option to enroll in standardized Medicare Supplement plans A, F, K, and N with Sterling Insurance. These plans offer a range of coverage options from basic to comprehensive. Sterling notes that only seven percent of eligible California residents carry a Medicare Supplement policy.
The plan includes the following features: discounted or no-cost memberships to participating fitness facilities nationwide, depending on which plan is selected. Telephone access to a registered nurse 24 hours a day, seven days a week, to answer health related questions. A twelve-month rate guarantee from the policy effective date providing the financial security policyholders expect. For more information, call 888-301-1950 or visit www.sterlinginsurance.com.
Free Mental Health Resource for California Seniors
The Institute on Aging recently secured funding to expand the visibility of its friendship line throughout the state. Staff members at the 24-hour hotline offer support to seniors who are feeling lonely, isolated, depressed, or considering suicide. They can also make regular calls to seniors to see how they are doing and remind them to take medications. Seniors can call 415-752-3778 or 800-971-0016.
Retirement Services
The Standard is offering customized retirement-planning services. Advisors can design a customized retirement plan solution for each client. This begins with essential plan services, which include record keeping and online tools. It also includes employee services, including a participant call center, quarterly newsletter, and enrollment materials. Advisors can then select which additional services to provide to each client and which services they want The Standard to handle. These include recordkeeping and financial services; administration; investment advice; participant service; and plan consulting. For more information, visit www.thestandard.com.
Hearing Service Discount Plan for Employer Groups
TruHearing unveiled new pricing for discount hearing services for large employer groups. TruHearing’s new per-employee, per-month (PEPM) pricing was developed for employer groups that want to cover the cost of the discount for all employees. Employers can also choose the voluntary option. TruHearing provides significant savings through direct purchasing of state-of-the-art digital hearing aids from four leading manufacturers and the TruHearing private label. For more information, visit www.TruHearing.com.
