IN THIS ISSUE:
? Galen Briefing on Consumer Choice in Medicare
? Mike Cannon on ?How Not to Negotiate?
? Devon Herrick on ?A Perfect Alternative?
? Kiplinger?s on Employee Empowerment
? Wichita Eagle on MSAs and Defined Contribution
? Pay Attention This ?Open Season?
? ?Encouraging Progress? Made in Wisconsin
? Health Allies
Galen Briefing on Consumer Choice in Medicare
Galen held a briefing on Capitol Hill on ?Consumer Choice in Medicare? on October 7 and I have a new paper with the same title that was released at the briefing. The paper argues that many new Medicare beneficiaries will come into the program armed with experience with consumer driven health care and substantial resources from former employers providing defined contribution retiree plans and funds built-up in their HRAs and MSA accounts. These new enrollees are not likely to accept a Medicare program that locks them into restricted benefits and a shrinking pool of providers. I suggest some ways the Feds need to change their thinking about market dynamics and private alternatives. The briefing itself featured Joel White, House Ways and Means staff, Scott Nystrom of the Senate Committee on Aging, Rep. Paul Ryan (WI), Lauren Smith of Congressman Cliff Stearns office, and Joe Antos of the American Enterprise Institute.
SOURCE: My new Medicare paper is available at: /assets/Consumer_Choice_In_Medicare.pdf
Mike Cannon on ?How Not to Negotiate?
Speaking of Medicare, Michael Cannon has a commentary in “National Review Online” on ?How Not to Negotiate.? He says by attacking the HSA/HSSA provisions in the Medicare bill, some ?conservatives have managed a trifecta (of blunders): a policy, tactical, and political blunder?? Policy Blunder – Some MSA supporters are attacking the HSSA idea and ?are crippling future efforts to reduce government paternalism?? Tactical Blunder ? The attacks on HSSAs from the right ?diminish HSSAs? value as a bargaining chip and increase the likelihood that MSA expansion itself will be traded away.? Political Blunder ? ?Picking the pocket of a Ways & Means Committee chairman during a high-stakes negotiation is not the height of political savvy. Particularly when he is trying to help you.? For people who were surprised by the HSSA proposal, Mr. Cannon suggests, ?they should get over it.? Mr. Thomas? bill is ?better than anyone expected.?
Devon Herrick on ?A Perfect Alternative?
Devon Herrick of the NCPA has a very nice op-ed in the ?Atlanta Constitution? that argues, ?Personal health accounts are the future of health insurance.? He says, ?HRAs and MSAs are a perfect alternative to one-size-fits-all employer-sponsored policies.? Employees, even those with chronic conditions, like these accounts because they get to select the services they prefer, not ones dictated by an insurer. And employers like them because they are ?simple and reduce waste.?
Kiplinger?s on Employee Empowerment
Writing in ?Kiplinger?s Personal Finance,? Mary Beth Franklin agrees. She says, ?the idea of putting health care dollars and decisions directly in the hands of employees is catching on quickly.? She mentions that some critics, like Consumers Union?s Gail Shearer, don?t like the concept because selection will ?drive up premiums for traditional policies.? (What is a ?traditional? policy these days?) Still, Ms. Franklin predicts rapid growth citing a prediction from Mercer Consulting that 40% of very large companies will offer them by 2004.
SOURCE: The column ran in the October issue and it should be available for free at: http://www.kiplinger.com/magazine/archives/2003/10/health.html.
Wichita Eagle on MSAs and Defined Contribution
An editorial in the “Wichita Eagle” makes much the same point. In light of skyrocketing costs and growing uninsured, ?One promising reform is to give workers more of a personal stake in their health-care spending?. More employers are experimenting with MSAs and other defined-contribution plans that encourage individuals to monitor and control their own health-care spending.? It also encourages states to reduce costly mandated benefits and to encourage small employers to ?pool their insurance purchasing power.?
Pay Attention This ?Open Season?
In the ?Dallas Morning News? Roger Yu tells workers they had better take a look at ?all those unread memos describing their choices in health plans? as open season approaches. He says many employers are moving away from co-pays to coinsurance, ?in which members are responsible for a fixed percentage of the total cost of care.? He adds, ?Also employees are being guided to so-called consumer-driven plans, in which members pay higher amounts out of pocket before insurance kicks in.? He explains, ?Employers say workers will wake up to the reality of health care costs only when they are forced to pay a percentage of the bill out of their own pockets? The thinking is that co-pays lull employees into being apathetic consumers.? He cites Baylor Health Care System and Electronic Data Systems as two local companies that are moving to consumer driven health care options.
SOURCE: Even though this article ran on October 5th, this newspaper charges for access. If you want to pay, go to: http://www.dallasnews.com/ and search the archives for ?consumer-driven.?
?Encouraging Progress? Made in Wisconsin
John Torinus of the “Milwaukee Journal Sentinel” says, ?Against the backdrop (of rising costs and increasing uninsured), some encouraging progress has been made.? He says Humana?s consumer driven plan is seeing a premium increase of only 1% this year, and 4.9% last year. ?Its first batch of commercial customers using the plan saw a 6% drop in first-year total costs.? He adds other signs, such as: increasing wellness and disease management programs; good results from the offer of ?tiers of competing plans? by the state and the City of Milwaukee; more developments on quality measurements; the introduction of Patient Choice in the state. He concludes, ?Bargaining over unit pricing and discounts deals with only the tip of the iceberg. The emerging initiatives go after the huge cost opportunities beneath the water.?
Health Allies has been purchased by UnitedHealth Group, according to a personal letter from Health Allies CEO Andy Slavitt. Coming on top of United?s purchase of Golden Rule, the biggest health insurer in the US appears to be making a decisive move into the consumer driven arena. Mr. Slavitt cites a “Business Insurance” article that names Health Allies as the ?second largest consumer driven benefits company.? He says 2003 has been a very successful year, marked not only by new enrollment but a retention rate of 100%.
SOURCE: No public sources yet, but the news should be picked up by the press shortly.
Benu is working with Kaiser and Cigna to provide multiple-choice products in Oregon and Southwest Washington state. This is as close as I?ve seen to what we envisioned as an ?aggregator company,? providing individual workers with a range of choices of not only plan design but of carrier as well. The key to using multiple carriers is a risk-adjusted premium to protect against selection concerns. Benu makes these adjustments and sends the employer a single bill and sends the carrier a single payment. The company will be marketing to the mid-market through local and regional brokers.
SOURCE: Contact Benu’s Ben Singer at 562-810-3463.
There is also an article by Peter Neurath in the ?Puget Sound Business Journal? at:
Lumenos has formed an interesting alliance with HealthTrust, an association that provides benefits to 73,000 employees of schools, municipalities, and counties in New Hampshire. Lumenos President Chip Tooke says in a press release that through the arrangement, ?Lumenos will be greatly expanding its potential audience for consumer-driven health care.? Wendy Lee Parker, the manager of HealthTrust, says the program ?empowers individuals to make informed choices regarding their own health care.?
SOURCE: For information contact Mary Angela Shannon at 703-236-6312 or firstname.lastname@example.org
Please send all comments/questions directly to me at email@example.com.
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