State Finds HSAs Popular With Highly Paid Parents
South Carolina's experience with state employees may provide helpful guidance for employers deciding whether to offer a health savings account.
The state's HSA enrollees had an average age of 41.1 years and tended to be high-income parents. This example seems to debunk the notion that HSAs will attract primarily young, healthy workers.
Robin Tester, director of the State of South Carolina Employee Insurance Program, says, "The contention that we would have only young, single people has not proven to be the case. Clearly, income makes a difference in whether you sign up for an HSA or not."
About 1% of the state's workers, or 3,800 people, enrolled in an HSA-qualified health plan, and 38% of those individuals opened an HSA. At least 211 of the HSA-users also have a limited-purpose FSA. The state initially worried that offering an HSA might lead to adverse selection, in which healthy people wind up in a different health plan than sicker people, Tester admits, but that fear didn't materialize. The HSA option has been fairly well received by employees who used it, he adds.
The state introduced the HSA-qualified health plan this year and does not contribute to the accounts.
This article was published by BenefitNews, October 20, 2005.
Employers Boost Financial Incentives For Disease Management
More employers have increased the financial incentives used to entice workers to participate in wellness and disease management programs.
Modem maker Westell Technologies Inc. is taking another $10 off employee health insurance premiums per paycheck if workers participate in the company's wellness program, says Gary Hansen, Westell's vice president of human resources.
Westell already gives employees a 10% discount if they take part in a health risk assessment and medical examination. The company boosted the incentive because participation in the assessments slipped last enrollment season, and "we want to make sure we keep the heat on," Hansen says.
To read this article in its entirety click on,
BenefitNews.com.
Relatively Few Prescription Drugs Drive Price Increases
In a recent report to Congress, the Government Accountability Office (GAO) examines the change in retail prices and other pricing benchmarks for drugs frequently used by Medicare beneficiaries and other individuals with health insurance from 2000 through 2004. The GAO prepared the report in anticipation of the Jan. 1, 2006, effective date of the new Medicare Part D prescription drug benefit.
According to the GAO, "We found the average usual & customary (U&C) prices at retail pharmacies reported by two state pharmacy assistance programs for a 30-day supply of 96 drugs frequently used by Blue Cross Blue Shield Federal Employee Health Benefits Program Medicare and nonMedicare enrollees increased 24.5% from January 2000 through December 2004." The GAO found that of the 96 drugs:
- Twenty drugs accounted for nearly two-thirds of the increase in the U&C price index.
- The increase in average U&C prices for 75 prescription drugs frequently used by Medicare beneficiaries was similar to the increase for 76 prescription drugs frequently used by nonMedicare enrollees.
- The average U&C prices for 50 frequently used brand prescription drugs increased three times as much as the average for 46 generic frequently used prescription drugs.
The GAO goes on to conclude, "average wholesale prices (AWP) increased at a faster rate than average manufacturing prices (AMP) and U&C prices for the 50 frequently used brand drugs from first quarter 2000 through fourth quarter 2004.
Ten drugs in each index accounted for almost 50% of the increase for AMP, AWP, and U&C prices. Eight of these ten drugs were consistent across the three price indexes."
To read this article in its entirity, click on Aspen Publishers' Benefits Reports.
HSA vs. Traditional Health Insurance
What is the difference?
The reality of an HSA product is that it is not that much different from a traditional health care plan.
There are key differences that need to be understood:
HSA Plan1. Lower Premium
2. NO Doctor's Office Co-Pay available
3. Tax Free Savings Account opportunity
4. Higher Deductible (no lower than $1000)
5. Rx Costs are applied to the deductible
Traditional Plan1. More "First Dollar" benefits
2. Office visit co-pay
3. NO Savings
4. Deductible varies
5. Drug coverage varies
An HSA is a non-traditional, yet cost effective way of viewing health insurance. It can save your client money by maintaining lower premiums and deductibles and limiting up front costs such as co-pays. Thus, resulting in lower costs from the insurance company.
The most important part of an HSA is that the client knows they have total control of their own money and have a tax free opportunity to store up those premium savings.
Overall, these comparisons show that a HSA is a wonderful product for the long term outlook on health insurance. It is a product that moves and grows with the client and provides more freedom of choice of products and services.
Information provided by Business Distribution Solutions.
Application For Help With Medicare Prescription Drug Plan Costs
The Social Security Administration mailed the Application for Help with Medicare Prescription Drug Plan Costs (Form SSA-1020) to almost 19 million potentially eligible individuals.
As part of its effort to reach all people who qualify for assistance, Social Security contracted with NCS Pearson, Inc. and West Corporation, to conduct follow-up telephone calls to individuals who have not responded to the initial mailing of the application.
The following website through BenefitsCheckUpRx has been established to assist Medicare-eligibles identify what assistance may be available for them.
https://ssl2.benefitscheckup.org/before_you_start.cfm?partner_id=12&subset_id=22&preserve=true
Free Online Tool Helps Predict Medical Expenses
Benefit managers may wish to inform their employees about a new
online tool that can help workers budget correctly for their family’s health care expenses.
The Family Health Budget was unveiled today by the consumer-driven health plan Humana and Consumer Action, a consumer advocacy group. It is available to everyone, whether one is a Humana customer or not.
Upon entering information such as their age, gender, number of prescriptions and number of doctor visits, consumers receive a calculation of their total annual health care spending and personalized recommendations on how to save money. With open enrollment season approaching, the budgeting tool can help workers select an appropriate health plan, decide whether to enroll in an FSA, or determine how much money to place in an FSA.
Humana CEO Michael McCallister says people “need to budget for health care expenses just like they would for any other necessity. There are many people who don’t know where they stand” on annual medical spending.
The budgeting tool dovetails with a driving principle of consumer-driven health care-- the notion that patients will spend more wisely on care if they have the right information.
Seniors Face Drug Plan Choices
The phone lines, inboxes and mailboxes of the nation's 43 million Medicare beneficiaries will be burdened by an unprecedented marketing campaign including dozens of firms seeking to enroll them for new prescription drug coverage beginning next year.
Premiums are ranging from $20 to $70 a month for the freestanding drug benefit. The drug coverage may cost nothing through some managed care plans. But no matter what the up-front costs, Medicare patients need to know that not all drugs they take will necessarily be covered, and most people will face out-of-pocket costs that will vary depending on how much they spend on drugs each year.
Critics of the program say the array of choices may prove so daunting to many seniors that they'll make poor choices or simply skip signing up for the coverage.
Virtually everyone involved in the drug program, officially known as Medicare Part D, stresses that seniors and disabled people should do their homework and talk over choices with someone they trust during the next few months.
To read this article in its entirity, click on
The Detroit News Health.
Companies Struggle For Pharmacy Cost Reprieve
Benefit managers favor cost-shifting, mail-order drugs and patient education as remedies for soaring drug bills, according to a recent survey of 100 HR professionals by Arxcel, a pharmacy benefit manager.
For reducing pharmacy costs, 70% of HR professionals deemed additional cost-shifting the most viable solution, and an equal number voiced the same sentiment about providing incentives to use mail-order services. Another 66% considered patient education about cost-effective medicine use the most viable option.
Pinpointing the primary driver of increasing pharmacy costs, 30% of respondents cited direct-to-consumer advertising, while 29% blamed the expense of developing new drugs. Another 20% blamed inflation, while 16% pointed to the aging of the U.S. population.
To read this article in its entirety click on
Benefit News.
HSA 101: Rules And Regulations
Health Savings Accounts are a great tool for consumers in an unstable and unpredictable health insurance market. However they were created and are regulated by the Federal Government, which means that there are LOTS of rules and regulations regarding the contributions to an HSA.
It is important that you and your clients are aware of these rules and regulations before choosing an HSA for their insurance needs.
1. There is a maximum amount that can be contributed to the Health Savings Account each year. This amount is subject to change in the future but as of this year it is: Either the amount of the deductible for the HDHP or $2,650 for a single person and $5,250 for a family, whichever amount is less.
2. There is an addendum to the above statement. Individuals 55 and older who are covered by an HDHP can make additional "catch-up" contributions each year until they enroll in Medicare. The additional "catch-up" contributions to HSA allowed are as follows:
2004 - $500
2005 - $600
2006 - $700
2007 - $800
2008 - $900
2009 or after - $1,000
3. If the client starts their HDHP in the middle of the year they cannot make the full year's contribution. Eligibility to contribute to an HSA is determined by the effective date of the HDHP coverage. The annual contribution depends on the number of months of HDHP coverage the client has during the year (technically, the months where you have HDHP coverage on the first day of the month). The amount the client can contribute is not determined by the date the client establishes his/her account. However, medical expenses incurred before the date the HSA is established cannot be reimbursed from the account. The client can contribute 1/12th of their total annual maximum per month the HDHP coverage is in place.
4. The client's personal contributions offer them an "above-the-line" deduction. An "above-the-line" deduction allows them to reduce their taxable income by the amount they contribute to their HSA. They do not have to itemize their deductions to benefit. Contributions can be made to their HSA by others (e.g., relatives or an employer). However, the client receives the benefit of tax deduction.
These are only SOME of the tax regulations that are put in place for an HSA.
This article was provided by Business Distribution Solutions.
Average Annual Nursing Home Cost Hits $74,000, Survey Finds
The average daily cost of private room in a nursing home in the United States increased almost 6% from last year, according to the annual MetLife Market Survey of Nursing Home and Home Care Costs.
The survey, by MetLife's Mature Market Institute, found the average nursing home cost is $203 per day, up 5.7% from last year's $192.
That works out to $74,095 annually, compared to just over $70,000 in 2004.
The rise in LTC costs can result in a crisis for people who are not prepared financially to handle them, says Sandra Timmermann, director of the MetLife Mature Market Institute. "Because long term care services are so costly and the costs will increase significantly over time, planning for long term care must be an integral part of the retirement planning process," Timmermann says.
The average stay in a nursing home is 2.4 years, MetLife notes, citing date from the Centers for Disease Contral and Prevention, Atlanta. That would bring the total average cost to $177,828 for a nursing home stay.
The above article was published by National Underwriter Magazine, October 3, 2005.
Giving Part D A Spin
"There are many, many pieces of mythology going around about this bill," Nona Bear said last week as she opened a training session on Medicare's new prescription drug program. "The most pernicious is that this is only for low-income seniors."
In fact, the voluntary program, also known as Medicare Part D, is open to more than 40 million people of all economic levels, most of them age 65 and older.
Enrollment starts Nov. 15, and benefits begin in January of 2006.
In simplest terms, Part D is an insurance program that protects enrollees from catastrophically high drug bills. It's also a discount program for the routine prescriptions that can gradually drain the bank accounts even of people who are neither especially sick nor especially poor.
For more on this article published by the Washington Post, click on
Medicare Part D.
On Your Mark...Get Set...For Medicare’s New Drug Benefit
As soon as Lyndon Johnson signed Medicare into law 40 years ago, his administration went into overdrive to sign people up. The effort to urge everyone 65 and older to buy into the voluntary part of the program—insurance for doctors' services at $3 a month—was so extensive that "we even had the Forestry Service looking for hermits in the woods," says Robert M. Ball, then Social Security commissioner, who implemented Medicare.
Within a year, 95 percent of older Americans had enrolled.
Another massive outreach campaign is now under way, as President Bush and his top officials tour the country to talk up the new Medicare coverage for prescription drugs that starts Jan. 1.
They describe the program—the biggest expansion of benefits since Medicare began—as "a good deal" and predict that next year about 30 million of today's 42 million beneficiaries will receive drugs either from a Medicare drug plan or from employer coverage subsidized by Medicare.
For more information on this article, click on
AARP Bulletin.
