Health Plan Trend Expected to Hold Steady in 2011

Segal Company's recently released 2011 Health Plan Cost Trend Survey estimates that medical and prescription drug cost trend will remain relatively unchanged from 2010.

The survey indicates that 2008 was the bottom of a downward pattern and that trend began elevating again beginning in 2009.  Also noted is that one of the short-term drivers of health plan cost trend is compliance with the new health reform law - the Patient Protection and Affordable Care Act.  

As reported by Business Wire, Key findings of the survey include:

• Compared to 2010, trend rates for indemnity plans and high-deductible health plans (HDHPs) are expected to decrease in 2011.

• Trend rate for preferred provider organizations (PPO) and point of service (POS) plans are slightly higher than in 2010.

• All 2010 medical plans types are projected to experience cost trends that are more than eight times higher than the consumer price index for all urban consumers.

• Prescription drug trend projections have remained below 10% for the last three years.

• Price inflation for inpatient hospital stays is the largest component of overall plan cost trend.

The complete findings of the 2011 Health Plan Cost Trend Survey can be found by clicking here.

Kaiser Family Foundation Launches Revamped Site

Today the Kaiser Family Foundation (KFF) launched a revamped version of their health reform gateway, chock full of resources on the new health reform law.  Included on the site are new features that provide explanations of the basics of the law, in-depth analysis of policy issues in implementation, and quick and easy access to relevant data, studies, and developments.

One of the site's new features, The Scan, provides a daily feed of easily-digestible summaries of the latest research and studies from the Foundation and others, as well as official actions and other developments related to the health law. Other new elements include:

• A customizable implementation timeline,
• A series of video clips featuring experts answering specific questions about the law and on a variety of other health policy topics,
• An interactive state map with key state-specific information related to health coverage and the health law,
• A public opinion poll tracker,
• A health reform subsidy calculator, and
• An official document finder that provides quick access to federal regulations and studies related to the health law.

Click here to access the new site.

Health Costs Projected to Continue Climbing

A new report from the Centers for Medicare and Medicaid Services' (CMS) Office of the Actuary notes that health care costs are expected to increase at a slightly higher rate over the next 10 years because of the new health reform law. The authors estimate that national health spending will reach nearly $4.6 trillion by 2019, increasing by 6.3 percent on average annually. This increase is 0.2 percentage points faster than expected before the health reform law was passed in March. Additionally, the team of economists predict that health spending will be at 19.3 percent GDP in 2019.

The report, published in Health Affairs, can be found by clicking here.
The New York Times story is available here.
And The Wall Street Journal article is here.

Texas Employers Unite to Lower Costs

On Thursday a group of nine North Texas employers announced the creation of a three-year effort called the "Texas Health Strategy Project", aimed at creating high-value benefit packages for their employees. The employers involved are Archon Group, Brinker International, the cities of McKinney and Mesquite, Energy Future Holdings, the Federal Reserve Bank of Dallas, Haggar Clothing, Interstate Batteries and Triumph Aero-Structures.

By collecting more employee-level data and improving how they manage health benefits, the group hopes to keep workers healthy and out of doctors' offices. Additionally, by banding together, the employers hope to more efficiently comply with the health reform law's new requirements. National Business Coalition on Health President Andrew Webber is quoted in the article as quipping, "As health care costs continue to rise, more employers are recognizing the value of tailoring benefits to the health risks within their employee populations."

Click here to read the complete article from the Dallas News.

NYBGH Health Reform Event

Tomorrow, August 25th, NYBGH is hosting a breakfast club event titled, "Health Care Reform: Getting Through 2011 Open Enrollment and Framing Longer-Term Strategies".  The event is sponsored by Mercer and is open to HR professionals and fund administrators only (including non-NYBGH members) and is complimentary.

Two Mercer benefits professionals will be the featured speakers: Barry Schilmeister, FSA, MAAA and Ilse de Veer.

The event will be held from 8:00 - 10:00am at the University Club of New York, located at One West 54th Street (at Fifth Avenue) in Manhattan.

To register, please visit https://www.nybgh.org/calendar/index.html or email Jen Cole at jcole@nybgh.org.

Survey Indicates How Employers are Dealing with Health Reform

Complying with the new health reform law will force some employers to hike premiums and increase cost-sharing obligations, a new survey shows. On Wednesday, the National Business Group on Health (NBGH) released the results of its 2011 annual plan design survey, which indicate that employers will be making many plan design changes to comply with the requirements of the new law.

Of the 72 large employers - representing 3.7 million employees - that were surveyed, 70 percent said they will eliminate lifetime dollar caps on overall benefits and 63 percent expect to increase 2011 premium rates, up from 57 percent in 2010.

Other findings, as reported by The Hill, include:

• Twenty-five percent of large businesses plan to hike the co-pay or co-insurance costs for prescription drug benefits at retail pharmacies, while 21 percent have the same plan for mail-order pharmacy benefits.

• Twenty-six percent will remove annual caps on overall benefits.

• Thirty-seven percent plan to alter annual or lifetime limits on specific benefits, including dental, mental health and infertility benefits.

• Thirteen percent said they will eliminate pre-existing condition exclusions for youngsters.

The complete survey results can be accessed by clicking here.

A C-SPAN broadcast of the press briefing can be found by clicking here.

Flexibility More Important than Grandfathered Status

A recent Hewitt Associates survey has found that 90 percent of large employers expect to lose their plans' grandfathered status by 2014, with the majority doing so within the next two years. Under the "grandfather" provision of the new health reform law, health plans can maintain many of their current coverage provisions and are not required to comply with certain new mandates if they do not significantly reduce benefits, change insurance carriers, or increase cost-sharing obligations.

Of the 466 companies - representing 6.9 million employees - that were surveyed by Hewitt, 72 percent expect to lost grandfathered status because of health benefit plan design changes and/or changes in cost-sharing requirements. Additional reasons cited were consolidation of health plans, changes to insurance carriers, and union negotiations. The survey also found that most self-insured plans (51 percent) are expected to lose grandfather status in 2011 and another 21 percent will lose their status in 2012. This expectation is similar for fully-insured plans.

Click here for the complete press release.