IN THIS ISSUE:
? CURRENT EVENTS
? THREE OF FOUR NEW MEXICO HEALTH PLANS LOSING ENROLLMENT
? ARIZONA CONSIDERS DEFINED CONTRIBUTION APPROACH
? WASHINGTON STATE FINALLY GETS MSA OPTIONS
? RETURN OF INDEMNITY COVERAGE IN KANSAS CITY
? BOSTON EMPLOYERS HARD PRESSED TO MAINTAIN COVERAGE
? BOND AND TALENT INTRODUCE AHP BILL
? SAM JOHNSON ALSO PROMOTES AHP BILL
? I?m testifying on Association Health Plans (HR 660) on Thursday before the Subcommittee on Employer-Employee Relations of the House Education and the Workforce Committee. The testimony will be available on Galen?s website at www.galen.org
? Later this month, I?ll be one of the presenters on the ?Defined Care 2003 Web Summit,? organized by MCOL. This is the second year in a row they?ve done this. I was pretty skeptical last year, but it actually worked pretty well. It collects a lot of information in one place and allows access to all of it from March 30 to April 11. For more information, go to: http://www.healthwebsummit.com/definedcare.htm
? I gave a short presentation on February 27, at a ?Health Care Roundtable? event that featured Labor Secretary Elaine Chao, SBA Administrator Hector Barreto, and a ?host of luminaries? (as they say). The roundtable was sponsored by the National Women?s Business Council. They put out a very nice issue brief that summarized all the topics discussed and will be issuing a transcript eventually. Go to http://www.nwbc.gov
It?s been a while since we last jumped into the local business journals. These are an invaluable resource for keeping tabs on what is happening across the country. Some of the best writing is happening in these publications and they report directly to the Main Street businesses that are most affected by changes in the market. So, in no particular order, here is what they are saying:
THREE OF FOUR NEW MEXICO HEALTH PLANS LOSING ENROLLMENT
The New Mexico Business Journal reports that ?three of New Mexico?s four major health insurers saw declines in their privately-paid-for memberships in 2002, a situation that suggests that small companies are dropping health insurance as the cost of health care increases.? Writer Dennis Domrzalski says that only the local Blue Cross plan increased enrollment, but the numbers enrolled in private plans has been falling for three years. Employers that remain are raising employee premium payments, deductibles and co-payments. On the other hand, Medicaid enrollment grew from 380,000 in 2002 to 420,000 in 2003.
ARIZONA CONSIDERS DEFINED CONTRIBUTION APPROACH
Next door in Arizona, ?some companies may just end up giving employees a lump sum of money to go off and buy their own health insurance,? according to Angela Gonzales. She cites Watson Wyatt?s Robin Reeves as saying there are a lot of steps along a continuum before that happens. One of those steps, according to Reeves, is consumer driven health plans ?in which employees can get some skin in the game.? But Henry GrosJean, benefits advisor to the Arizona Small Business Association, argues these plans are just trading dollars between employer and employee. ?They do nothing, absolutely zero, to address the cost of health care, the cost of prescriptions.?
WASHINGTON STATE FINALLY GETS MSA OPTIONS
Peter Neurath in Seattle reports that local insurers are finally getting around to offering medical savings accounts in that state. He says Life Wise Health Plan and KPS Health Plans ?see MSAs as an attractive option for employers and self-employed individuals looking for relief from insurance premiums continuing to rise at double-digit rates with no end in sight.? KPS has been selling MSAs to a few local associations such as the state medical society and Seattle area Chambers of Commerce, but this is the first time they will market to small businesses generally. The article notes that MSAs ?have not been all that popular,? largely because Congressional Democrats saddled them with so many restrictions. But the Bush administration is proposing easing the restrictions. The article reports there is growing demand for the product among insurance brokers who need to have something more affordable for their clients.
RETURN OF INDEMNITY COVERAGE IN KANSAS CITY
In Kansas City, commentator Mike Dlugolecki predicts a return of indemnity coverage. He notes that rising costs have taken the shine off HMOs and even self-insuring employers have been hit with double-digit increases. He writes, ?The cycling of approaches has brought us back to lower-limit benefit plans insured on an indemnity basis. The original indemnity plans were meant to ?indemnify? the patient against catastrophic expense liability. We have come full circle back to this type of plan.? He says his agency (the Lewer Agency) has partnered with Fidelity Security Life Insurance of Kansas City to develop a product called Value+Care, which offers ?an old-fashioned indemnity insurance plan.? He adds, ?This type of program is hitting a chord with buyers and experiencing a rebirth in the market.?
BOSTON EMPLOYERS HARD PRESSED TO MAINTAIN COVERAGE
Mark Micheli write in the Boston Business Journal that local employers with fewer than 10 workers are seeing renewal increases of 15 to 30 percent this year. One small employer in Newton reports his premium going up from $680/mo to $900/mo. ?I?m not sure how much longer I?ll be able to afford this,? he says. Massachusetts has had a program to help subsidize premiums for low-income workers, but Governor Romney is reducing eligibility for it due to state budget constraints. Adults without children will no longer be eligible and the income cap is going down from 200 percent to 133 percent of poverty. Meanwhile Lisa Carroll of the Small Business Service Bureau advises employers to cut back on coverage and raise cost-sharing provisions.
BOND AND TALENT INTRODUCE AHP BILL
Which brings us back to the need for association health plans. No one would argue they are the One Big Answer, but the fact is that the market is crashing, in part because of excessive regulation and also due to growing concentration by a few big players. If all AHPs do is bring more competition to the small group market, that will be a worthy achievement by itself. The St. Louis Business Journal includes an article about Missouri?s two senators, Kit Bond and Jim Talent cosponsoring ?The Small Business Health Fair Act of 2003.? The article says the Congressional Budget Office (CBO) believes it would lower premiums by 13 percent.
SAM JOHNSON ALSO PROMOTES AHP BILL
And Rep. Sam Johnson (R-TX) writes about AHPs in the Dallas Business Journal. He cites a number of horror stories in which premiums have jumped 57%, or where an employer is willing to pay half the cost but employees can?t afford the other half. He believes AHPs ?would do wonders for small business owners as well as their employees.? He cites the CBO estimate of savings and also says CBO predicts up to 2 million Americans would gain coverage. He adds that his bill includes strong consumer protections such as allowing only ?reputable professional and trade associations? to offer AHPs, and requiring AHPs to register and comply with disclosure and solvency requirements.