Insurance Premiums Expected To Rise About 5.3% In 2013

September 26th, 2012 § 0 comments § permalink

NPR (9/26, Andrews) reports in its “Shots” blog, “the good news for this open enrollment season is that premiums aren’t expected to increase quite as much for 2013 as they did this year.” The blog says that “the increase looks to be about 5.3 percent instead of an average 5.9 percent rise for 2012, according to Towers Watson’s annual health care survey of mid- to large-size employers.” However, it points out that “the bad news” is that “employers will ask workers to shoulder more of the burden – again.”

Current studies around health care costs and insurance coverage rates

September 26th, 2012 § 0 comments § permalink

Bloomberg News (9/26, Wayne) reports that two studies released this week show that “medical prices accelerated faster than some projections last year and the number of uninsured is rising.” First, the Health Care Cost Institute study released Monday found that “costs for people with employer-sponsored insurance plans jumped 4.6 percent in 2011, more than the government’s 3.9 percent estimate for the entire health system.” Then, a CDC report said that “the number of people without insurance climbed 1.7 percent in the first quarter of 2012.” Together, Bloomberg says these data “show the U.S. goal of expanding health care is veering onto a more difficult road.” The piece quotes a representative from HHS responding, “In recent years, overall health-care cost growth has reached record lows and the health-care law drives costs down.”

The ABC News (9/26, Tapper, Dwyer) “Political Punch” blog reported on the Health Care Cost Institute study, and adds that a recent Kaiser Family Foundation report showed that “health insurance premiums for individuals and families also climbed” from 2010 to 2011, up three percent for an individual, and four percent for a family. The blog characterizes the two studies as counter to “President Obama’s 2008 promise to contain” healthcare spending.

Looking further into the Health Care Cost Institute Study, CQ (9/26, Subscription Publication) calls it “the first broad look at 2011 health care spending for those with employer-sponsored health insurance.” The study attributes the “uptick in spending” it found to “increases for all major categories of care: hospital stays, outpatient care, medical procedures and prescription drugs.”

“Choosing Wisely” is Key To Health Care Cost Containment

April 10th, 2012 § 0 comments § permalink

Last week, nine major medical specialty societies representing 374,000 physicians nationally began their “choosing wisely” campaign geared at reducing healthcare costs by educating the public and fellow healthcare providers about over-utilization of healthcare services.

The group released a list of 45 questionable tests and procedures that are often offered to patients unnecessarily and should be questioned as a means of reducing overall healthcare spending. Each of the nine involved practice areas, which range from the American Academy of Family Physicians to the American College of Radiology and the American Society of Clinical Oncology, developed their own lists of “Five Things Physicians and Patients Should Question” in recognition of the importance of physician and patient conversations to improve care and eliminate unnecessary tests and procedures.

These lists represent specific, evidence-based recommendations physicians and patients should discuss to help make wise decisions about the most appropriate care based on their individual situation. Each list provides information on when tests and procedures may be appropriate, as well as the methodology used in its creation.

This public information effort is spearheaded by the ABIM Foundation and Consumer Reports, and is intended to reduce healthcare costs in the long run. The Congressional Budget Office estimates that up to 30 percent of care delivered in the United States goes toward unnecessary tests, procedures, doctor visits, hospital stays and other services that may not improve people’s health—and, in fact, may actually cause harm. Furthermore, the federal Institute of Medicine (IOM) has estimated that as much as 30 percent of healthcare in the United States is wasted.

If current trends remain unchanged, the Centers for Medicare & Medicaid Services project U.S. healthcare spending will reach $4.3 trillion and increase from 17.3 to 19.3 percent of the nation’s gross domestic product by 2019.

“Choosing Wisely” is Key To Health Care Cost Containment

April 10th, 2012 § 0 comments § permalink

Last week, nine major medical specialty societies representing 374,000 physicians nationally began their “choosing wisely” campaign geared at reducing healthcare costs by educating the public and fellow healthcare providers about over-utilization of healthcare services.

The group released a list of 45 questionable tests and procedures that are often offered to patients unnecessarily and should be questioned as a means of reducing overall healthcare spending. Each of the nine involved practice areas, which range from the American Academy of Family Physicians to the American College of Radiology and the American Society of Clinical Oncology, developed their own lists of “Five Things Physicians and Patients Should Question” in recognition of the importance of physician and patient conversations to improve care and eliminate unnecessary tests and procedures.

These lists represent specific, evidence-based recommendations physicians and patients should discuss to help make wise decisions about the most appropriate care based on their individual situation. Each list provides information on when tests and procedures may be appropriate, as well as the methodology used in its creation.

This public information effort is spearheaded by the ABIM Foundation and Consumer Reports, and is intended to reduce healthcare costs in the long run. The Congressional Budget Office estimates that up to 30 percent of care delivered in the United States goes toward unnecessary tests, procedures, doctor visits, hospital stays and other services that may not improve people’s health—and, in fact, may actually cause harm. Furthermore, the federal Institute of Medicine (IOM) has estimated that as much as 30 percent of healthcare in the United States is wasted.

If current trends remain unchanged, the Centers for Medicare & Medicaid Services project U.S. healthcare spending will reach $4.3 trillion and increase from 17.3 to 19.3 percent of the nation’s gross domestic product by 2019.

Healthcare Studies Galore

January 18th, 2012 § 0 comments § permalink

A number of new interesting reports and studies were issued last week.

  • According to a new analysis by the Robert Wood Johnson Foundation, health insurance premiums would rise by as much as 25 percent if the healthcare law is implemented without an individual mandate. Furthermore, the study found that removing the mandate from PPACA while still expanding Medicaid eligibility would decrease the number of people with private coverage by 3.6 million. Uncompensated care would increase by $20 billion.
  • The Agency for Healthcare Research and Quality issued a report that shows that only one percent of the population accounted for a whopping 22 percent of healthcare costs in 2009. Furthermore, only 5 percent of the population accounted for 50 percent of healthcare costs. The high cost patients “tended to be white, non-Hispanic women in poor health; the elderly; and users of publicly funded healthcare.”
  • Also out last week were the results from Aetna’s ”HealthFund” study on consumer-directed products, including health savings accounts and health reimbursement arrangements. Compared against standard plans, Aetna found that employers who offered consumer-directed plans saved $21.8 million over a five-year period for every 10,000 members. The study also surveyed 2.3 million Aetna clients and found that those with consumer-directed plans  “received screenings for cervical cancer, colorectal cancer and prostate cancer, as well as mammograms and immunizations, at a higher rate compared to members in PPO plans.”
  • Finally CMS’ Office of the Actuary released its annual report on health spending in the United States. Spending is growing at a historically low rate, which is attributed to the country’s general economic decline. Total health spending grew just 3.9 percent in 2010—only slightly faster than the 3.8 rate of growth in 2009—reaching a total of $2.6 trillion. This represents the slowest rates of growth in the 51 years that CMS has collected the data.

Concerning the last bullet point, the decline in healthcare spending is not attributable to PPACA, since the data collected is for 2010, and few of the laws provisions were in effect then, and none were in effect for the entire year. Also, it is important to note that in 2010, the federal government’s share of national health spending increased to 29 percent. As PPACA’s subsidy provisions take effect in 2014, the amount of national health spending incurred by the federal government is only expected to grow further.

Wisconsin’s Health Insurance Costs Remain Higher Than 11-State Midwest Average

June 10th, 2011 § 0 comments § permalink

The Milwaukee Journal Sentinel (6/9, Romell) reports that the cost of health insurance in “southeastern Wisconsin continues to outstrip the average across the Midwest,” according to a study issued by the Greater Milwaukee Business Foundation on Health. The researchers found that Wisconsin’s premiums “averaged 8% more in 2009 than premiums throughout 11 states from Ohio west to Kansas and North Dakota.” That number was similar to the “gap an earlier edition of the same study found for 2007.” The new data also showed that since the study was first conducted 11 years ago, southeastern Wisconsin’s premium costs “exceeded the Midwest” by an estimated 55% average. At the same time, however, people in southeastern Wisconsin “averaged 16% fewer hospital admissions, 17% fewer physician appointments and 25%” fewer emergency department visits.

Workers’ Health Coverage Payment Share Rose Faster Than Inflation, Premium Increases

June 10th, 2011 § 0 comments § permalink

The National Journal reports that workers “paid as much as 121 percent more in 2009 than in 2001 for their share of employer-sponsored health insurance,” according to a report released by the Agency for Healthcare Research and Quality (AHRQ) on Wednesday. The federal agency found that an employee’s “share of paying for health insurance rose more than either inflation or the increase in health insurance premiums overall. … ‘Premiums for single coverage rose 61.6 percent from $2,889 to $4,669, while employee contributions rose 92.2 percent from $498 to $957,’” notes the AHRQ report. The average annual premium share for workers with “employee-plus-one coverage rose 121 percent,” 50 percent for employees with family coverage, and 92 percent for those “paying only for themselves.”

Health Spending Grew At Slowest Pace In 50 Years

January 6th, 2011 § 0 comments § permalink

Media outlets widely covered a CMS report that showed the recession hindered Americans’ spending on healthcare, but most sources still expressed concerns that healthcare expenditures continue to grow unchecked. The New York Times (1/6, A19, Pear) reports, “Total national health spending grew by 4 percent in 2009, the slowest rate of increase in 50 years, as people lost their jobs, lost health insurance and deferred medical care, the federal government reported on Wednesday.” Nevertheless, “health care accounted for a larger share of a smaller economy — a record 17.6 percent of the total economic output in 2009, the report said.”

The AP (1/6, Alonso-Zaldivar) reports, “The recession slowed the growth of the nation’s health care bill to the lowest levels ever measured,” yet, “the slowdown did not change the nation’s underlying problem with out-of-control health care spending.” Data from Medicare’s Office of the Actuary show that “Americans spent $2.5 trillion on health care in 2009, or $8,086 per person.” Notably, the “figures do not reflect the impact of President Barack Obama’s landmark health coverage expansion, which didn’t pass until 2010.”

McClatchy (1/6, Pugh) reports, “Unlike previous recessions, when spending for health services began to slow some two years after an economic downturn, the effect of the Great Recession was swift and profound on insurers, health care providers and patients in both 2008 and 2009.” McClatchy adds, “Fueling the spending slowdown in 2009 was a 3.2 percent decline in private health insurance enrollment as 6.3 million people lost job-based health coverage that year. That loss of private coverage also curbed growth in out-of-pocket spending by patients, many of whom delayed medical care because of a lack of cash.”

Meanwhile, “spending on Medicaid soared — by 9 percent, compared with less than 5 percent in 2008 — as more people qualified for the public insurance program for the poor,” the Washington Post (1/6, Goldstein) reports.

In fact, “government spending on Medicaid and Medicare rose almost six times faster than insurance company expenditures in 2009 from the prior year as the recession pushed more Americans onto public assistance,” Bloomberg News (1/6, Young) reports. The federal government “and states combined to spend $373.9 billion on Medicaid…an increase of 9 percent. Outlays for Medicare, aiding the elderly and disabled, rose 7.9 percent to $502.3 billion.” Meanwhile, “insurance companies led by UnitedHealth Group Inc. spent $801.2 billion, an increase of 1.3 percent.”

Politico (1/6, Coughlin) says that despite the trend, “some sectors saw accelerated health spending, including a whopping 10 percent bump for home health care, an 8.3 percent increase in other residential and personal care and 5.3 percent for prescription drugs.” Commenting on the data, Karen Ignagni, president and CEO of America’s Health Insurance Plans, said, “The continued rise in health care costs is not sustainable. … Rising health care costs threaten our economic competitiveness, make health care coverage less affordable, and crowd out other urgent national priorities. We urge policymakers to work on a bipartisan basis to pass reforms that will control the soaring cost of medical care.”

The Wall Street Journal (1/6, Landers, subscription required), Reuters (1/6, Heavey), CQ HealthBeat (1/6, Reichard, subscription required), and Modern Healthcare (1/6, Zigmond, subscription required) also cover the story, as does The Hill (1/6, Pecquet) in its “Healthwatch” blog.

SHPS Health Trend Report – 3Q2010

December 29th, 2010 § 0 comments § permalink

SHPS, Inc. is a national third party administrator.  For many years the firm has been publishing on a quarterly basis data around health, dental, and vision plan costs.  For the most recent quarterly report be sure to check out http://bit.ly/fCVd7p.

 

The deficit commission addresses rising health care costs

December 2nd, 2010 § 0 comments § permalink

The National Commission on Fiscal Responsibility and Reform (aka “The Deficit Commission”) – http://www.fiscalcommission.gov/ – has come out with some recommendations on how to address rising health care costs in the federal government’s budget – http://bit.ly/fG7ZnB.

Boeing Increases Employee Health-Insurance Fees, Cites Cost Pressures – WSJ

October 21st, 2010 § 0 comments § permalink

Quoting from the WSJ post that’s found at http://bit.ly/auuqW7:

Responding to what it says are rapidly rising costs, including some as a result of the new health-care bill, Boeing Co. plans to increase the price of employee health insurance for its non-union workforce over the next few years.

In a letter sent to the roughly 90,000 affected employees on Oct. 14 by Rick Stephens, Boeing’s senior vice president for human resources, the company lays out a plan that will phase in higher employee costs for deductibles, co-payments and co-insurance during 2011. In 2012, the letter says, employees under a certain type of plan will see their coinsurance payments go from 10% to 20% up to the out-of-pocket maximum.

“Health care costs are rising significantly faster than inflation—affecting our ability to price products and services to win against lower-cost competitors and to invest in new products and services,” Mr. Stephens wrote in the letter, a copy of which was reviewed by The Wall Street Journal.

“The newly enacted health care reform legislation, while intended to expand access to care for millions of uninsured Americans, is also adding cost pressure as requirements of the new law are phased in over the next several years,” he wrote.

Mention is also made in the post about preparing for the “Cadillac plan” tax in 2018.  Reminder that in 2018 there will be a 40% excise tax on employer-sponsored health plans with aggregate values that exceed $10,200 for singles and $27,500 for families.  That is the monthly equivalent of $850 for single coverage and $2,291.67 for family coverage.  Using the rule of 72 – 8 years x 9% (the PricewaterhouseCoopers estimate of 2011 trend for PPO medical plans) – that means costs could potentially double by 2018 if the average year over year trend increase is 9%.  Since many of my firm’s clients currently offer medical plans that cost more than $425 for single coverage and $1,146 for family coverage, it is easy to see how many will potentially be dealing with this onerous excise tax in 2018.

Survey: Cost of insurance claims to rise 11% for PPOs – USA Today

September 14th, 2010 § 0 comments § permalink

Quoting from a post on USA Today from earlier…

“The costs that dictate employer-provided health insurance plans will climb more than 10% within the next 12 months, and financially pressured companies may pass more of this increase along to their workers through next year’s benefits plans, according to an Aon Consulting report Tuesday.

Many factors contribute to the cost of providing insurance, including expensive medical treatment, health issues related to obesity and an aging population, high unemployment and the effect of the new health care law. In a survey of about 60 health organizations around the country earlier this year, Aon Consulting, a subsidiary of insurance broker Aon, found that insurers expect to pay out 10.7% more in claims for a preferred provider organization, or PPO, managed care plans.”

Here is a chart that graphically illustrates the anticipated cost increases for 2011 by plan type:

To read the article in its entirety, visit http://usat.ly/c2Syg0.

Projection: PPACA to have “moderate effect” on health spending growth rates – Employee Benefit News post

September 14th, 2010 § 0 comments § permalink

Earlier today Kathleen Koster, reporter for Employee Benefit News, posted an article at http://bit.ly/cr4kxU addressing the impact on health spending growth rates that the economists at CMS project over the next decade.  Pretty good read.

Health Outlays Still Seen Rising – WSJ

September 9th, 2010 § 0 comments § permalink

Be sure to read Janet Adamy’s article posted yesterday that’s entitled “Health Outlays Still Seen Rising” – http://bit.ly/d1m2pa.  Here is a very telling graphic that’s contained in the body of the article:

Something that is profoundly disturbing to me is the fact that PPACA does NOTHING to address the cost drivers underlying health insurance premium increases.  The focus of the legislation was (inappropriately) around the fixed operating costs that are associated with health insurance rather than the cost of care.  One does not have to long any further than the controversial MLR (Medical Loss Ratio) rules that are currently being promulgated to understand that the Feds are doing everything they can to manage the cost of the administrative piece (the 15% portion) rather than the claim side (the remaining 85%).

In future blog posts I will share some current data around health care cost trends.

Growth slows in health spending – USA Today

September 3rd, 2010 § 0 comments § permalink

USA Today today reported that “Health care spending this year has grown at its slowest rate in a half-century, a sign that people are forgoing medical care during the recession“.  The article goes on to state “When inflation is taken into account, spending per person actually fell 0.2% in the first six months of the year. That’s the first decline since the government began adjusting for inflation in 1995.”

Other key statements in the article include…

  • “The drop was not predicted in government forecasts and appears to be the result of a bad economy and high unemployment, health care experts say.”
  • The drop in health care spending is a sharp contrast to the last recession in 2001, when health care costs accelerated during the downturn.

Read the entire article.

Fascinating stuff!

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