IN THIS ISSUE:
? Galen?s New Web Site
? Health Benefits Reform List Coming In-House
? Labor Strife Over Benefits Self-Defeating
? John Alden/Fortis Health Offer Small Group HRAs
? GreatWest Healthcare Develops Shared Deductible
? Aetna and Humana Win School District Contracts
? BCBS of North Carolina Offers Defined Contribution
? AMS Offers High Deductible Individual Coverage
Galen?s New Web Site
We have just launched our new web site, which features a major section on consumer driven health care. Unfortunately, most of our old URLs will not work now and it will take a while to get everything converted. But I think you will be pleased with the end result and you can watch us as we grow the usefulness of the site. I am eager to include as many resources as possible on this site, so please send me your links ? especially to studies, research, references, and other areas of useful information. Also, keep us posted on relevant meetings and conferences. We will have sections devoted to employer benefits, individual ownership, patient education, physician power, and public programs. Each section will start with Galen-specific papers and documents, but then go right into a ?resources? section where people can pull up your information.
Health Benefits Reform List Coming In-House
As part of the web site conversion, we are also bringing the HBR discussion list in-house. This will free us of the erratic service we?ve been getting from Yahoo. If you don?t know already, this list has been in business for about three years now. It is currently made up of about 200 people, mostly independent physicians and insurance brokers and a scattering of economists, actuaries, business owners, and policy wonks like me. List members are generally supportive of free market ideas in health care, but that leaves a whole lot of room for discussion on tactics, priorities, and the appropriate role for government. You are welcome to sign-on and check it out. You can always leave if it doesn?t suit your tastes.
SOURCE: To Join the List, send an e-mail to — email@example.com
To unsubscribe, send an e-mail to ? firstname.lastname@example.org
Labor Strife Over Benefits Self-Defeating
A number of papers have carried stories about the current grocery strike in Southern California being emblematic of the dilemma facing employers and workers everywhere. The 70,000 union supermarket workers are accustomed to having to pay nothing for premiums and only nominal out-of-pocket costs, but double-digit premium increases make it difficult for employers to continue paying the full freight. Stephanie Armour and Julie Appleby write in ?USAToday? that a study by HRET?s Jon Gabel shows worker OOP costs actually fell by 23% from 1990 to 1997. And EBRI?s Paul Fronstin is quoted as saying, ?Employers have been reluctant to cut back (on benefits) because unemployment is only at 6%, which is historically low.? Still, employers everywhere are increasing worker share of costs. The rise in health care costs is close to ten times the rise in general inflation, and employers can?t raise prices to cover the increases. Paul Ginsburg notes that in some cases unions are sacrificing wage increases to avoid cuts in health benefits. The irony here, of course, is that it is precisely the increase in third-party payment in the 1990s that has resulted in extraordinary hikes in health costs in the 2000s. The union demands for full employer coverage are inherently self-defeating. Labor needs to wake up to the problem it has itself created, or it will face the bankruptcy of the very employers who make union jobs possible.
John Alden/Fortis Health Offer Small Group HRAs
Effective November 1, 2003, John Alden Life, a subsidiary of Fortis Health, will be offering HRA programs to small businesses in twenty states ? AL, AZ, AR, GA, ID, IL, IN, IA, MI, MS, MO, NV, NC, OH, OK, PA, TN, TX, VA, and WI. The HRA product joins a stable of tax-favored products John Alden now provides, including MSAs, FSAs, and POPs. The company seems uniquely positioned to ?mix and match? these products to meet the needs of small businesses. For instance, the employees of a Subchapter S Corp are qualified for an HRA, but not the owners of the company. Alden will set up HRAs for employees and MSAs for owners. The company promises to expad its markets in the coming months.
SOURCE: For more information, go to http://www.nstarmarketing.com or call 877-225-5077
GreatWest Healthcare Develops Shared Deductible
?Managed Care Week? reports that Great West Healthcare is developing a new product for the jumbo market. This product features a shared deductible, or what the company calls a ?Concurrent Contribution HRA.? The employee?s OOP expense is matched by an HRA contribution, at least to the limits of the HRA balance. The story says Great West has also developed a product it calls Consumer Advantage. It provides full coverage of prevention and primary care, has one level of coinsurance for ?catastrophic, medically complex and emergency care,? and a lesser level of payment (as low as 50%) for ?scheduled or routine services that involve more member judgment.?
SOURCE: Contact Great West?s John Alberg at 303-737-2681.
Aetna and Humana Win School District Contracts
?Managed Care Week? also reports that Aetna and Humana are penetrating the public employee market. The school district in Houston has dropped CIGNA and placed its business with a range of options from Humana, including two consumer driven options. The article quotes a Humana representative as saying they ?agreed to offer a true HRA plan? due to the size of the group. (Humana?s existing products provide an ?allowance? but no rollover of unspent funds). Aetna sold its HealthFund product to the Pinellas County school district. Aetna will also provide two HMOs and a POS product, but the HealthFund will be the lowest priced option.
SOURCE: The article gives two contacts, Ken Janda of Humana at email@example.com, and Ted Pafundi of the Pinellas County School Board at firstname.lastname@example.org
BCBS of North Carolina Offers Defined Contribution
Blue Cross Blue Shield of North Carolina is putting out a defined contribution product in 2004. The basic platform will be its Blue Options PPO coupled with a ?Freedom Account? that gives workers more control over benefit selection. Employers will decide how much they can spend on health benefits and that money will be deposited into the Freedom Account. Employees may use those funds to select varying benefits, deductibles, and coinsurance. If they want more generous coverage, they may pay the difference through payroll deductions. If they have money left over, it will stay in the account as an HRA. Company president Bob Greczyn says, ?The Freedom Account meets both needs. Employers can control their costs from year to year, and employees can buy as many or as few benefits as they need.? The company will offer the program to a few accounts in the first quarter of 2004 and expand its marketing in the second quarter.
SOURCE: Contact Michelle Douglas at 919-765-2825 or Mark Stinneford at 919-765-4933, both of BCBSNC.
AMS Offers High Deductible Individual Coverage
American Medical Security reports that sales of a new high deductible plan are exceeding expectations in the individual market. The product, Essential Choice, offers deductibles of $5,000 or $7,500 for outpatient and Rx charges, and copays of $500, $1,000 or $1,500 for inpatient and surgical services. The product is available in 17 states (AR, AZ, DE, FL, IA, IL, MI, MO, NC, NE, OH, PA, SC, TN, TX, VA, and WI).
SOURCE: Contact Cliff Bowers at 920-661-2766.
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“Consumer Choice Matters” is a free weekly newsletter published by the Galen Institute, a not-for-profit public policy organization specializing in research and education on health policy. Visit our website at http://www.galen.org for more information.
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