We just put a press release on the wire with the results of our latest Medicare Confidence survey. We plan to survey our retiree panel about this issue on a regular basis. The first survey went out around the time the health care reform bill passed. 90 days later, retiree confidence in Medicare being available during their own lifetimes has increased a bit, but they remain concerned about Medicare for future generations. Read the rest of this entry »

The CDC just came out with a new estimate of uninsured Americans,
and the number is still growing. Based on the 2009 survey, the CDC
estimates that 46.3 million people – just over 15 percent of the
population – lacked health insurance last year. That’s up from 43.8
million in 2008. Nearly 60 million had been uninsured during some
part of the year, and nearly 33 million had been uninsured for more
than a year at the time of their interview. Kaiser Health News and
NPR provide a good summary of the findings.  Complete information
can be found in the Health Insurance and Expenditures chapter of
the CDC report entitled Health, United States, 2009, which is the source
of the graph to the right on this post.

Over at Employee Benefit News, Lydell C. Bridgeford has done a nice job of summarizing the findings from the latest MetLife Employee Benefits Trends Survey. Key takeaways: for the first time since the survey began eight years ago, employers’ biggest concern is controlling the cost of heath and welfare benefits, coming in ahead of employee retention and increasing employee productivity. Employees are worried about the cost of health care too – and want to know how to get the most out of their benefit plans.

 

The Medicare Advantage star ratings became a lot more significant when
the PPACA passed, since bonus payments to MA providers will be paid to                      
higher-rated 4- and 5-star plans. Kaiser Health News covers this topic in
a thoughtful story here, along with this table showing the percentage of
beneficiaries enrolled in Medicare Advantage plans by rating for each state.

PriceWaterhouseCoopers has released a new report predicting that medical costs in the United States will rise 9% next year, down slightly from 9.5% this year but still well ahead of inflation. The report is based on interviews with health plan executives, a survey of employers and hospital-based health plans, and reviews of analyst reports. It analyzes several factors affecting medical costs, both in upward and downward directions.

Among the downward pressures  are the trend for employers to return to pre-managed care benefit design by increasing deductibles and replacing co-pays with coinsurance. In 2011, for the first time, most employers to have a deductible of $400 or more. “…[I]n 2010, the most common plan among employers surveyed by PwC had a deductible of between $400 and $999. The trend in deductibles has been remarkably fast. In 2008 and 2009, the most common plan had no deductible. In addition…high-deductible plans are now the primary plan for 13% of employers surveyed…, up from 6% in 2008.”    

Our company announced today that we have crossed the threshold of $1 billion in savings for U.S. employers that provide retiree health benefits.  The savings are a result of using the Extend Health insurance exchange to remove wasteful administrative costs and market inefficiencies from the health care system, while empowering consumers with choice.  Extend Health CEO Bryce Williams says, “Our experience demonstrates that exchanges provide a unique and powerful way for employers to meet their health care obligations while managing costs. Exchanges offer a rational and predictable way for employers to subsidize health care for the foreseeable future.” The Extend Health Exchange opened for business on November 15, 2006 and has served more than 250,000 retirees sponsored by some of the nation’s largest companies, including each of the “Big Three” auto manufacturers, as well as a growing number of public sector employers. Read the whole story on insurancenewsnet.com.

A recent survey by Towers Watson indicates the majority of employers expect to change and even diminish their sponsored health care options for retirees as a way to manage the increased costs associated with health care. Here are some of the results:
  • 88 percent of employers plan to pass on increases to employees.
  • 74 percent plan to reduce health benefits and programs.
  • 33 percent plan to absorb costs in their business.
  • 20 percent plan to pass on increases to customers.
To see the full article, click here.

At Extend Health, we continue to be encouraged that the future for Medicare Advantage in a post reform world still looks robust. The latest good news comes from Oppenheimer, in a recent report titled Prosperity Makes Friends; Adversity Tries Them: May Medicare Enrollment

According to the report, profits for many MA plans were better than expected in 2009, and the earnings picture looks rosy for 2010 as well. Profits have been rising on healthy growth in membership numbers, and MA plans actually added more new enrollees in May 2010 than they did in May 2009.

Oppenheimer notes that “…Medicare plans appear to have a more certain near-term outlook than the commercial plans right now, as Medicare rates for the next year are known, the long-term reimbursement outlook was determined as part of reform, and the membership continues to show surprising resilience despite major benefit adjustments and higher premiums.” [Emphasis mine]

That member resilience can be expected to continue. Premium increases are nothing new (averaging 14%  this year, before reform was passed). When enrollees evaluate their choices, in most cases they’ll discover that their MA plan is still more cost-effective than other options.

We’ve noted before (here and here) that we expect carriers to react in a stable, rational manner to reimbursement reductions. The carriers we talk to are already well along in implementing strategies to raise their CMS-determined “star” ratings so they can capture some of the bonus money available for four- and five-star rated plans.  With payment rates staying flat in 2011 (rather than being cut by 4% as was expected), insurers will continue to adjust strategy, benefit design, and premiums to handle  the coming reductions without breaking the bank for their MA plan members.

For more on our take on the future of Medicare Advantage plans, and how we are advising our corporate clients to manage through this transitional time, listen to the replay of this webinar on healthcare reform and your retirees that we presented in April. (Just click on the link under the webinar tab.)