Health Savings Accounts Aren't Immune to Risk
Despite a good deal of pre-State of the Union huffing and puffing, the Bush administration apparently plans to seek fairly modest changes in the law covering health savings accounts (HSAs) and other "consumer-driven" types of medical insurance.
Even without the better tax breaks Bush is talking about, though, the popularity of these plans is growing -- at least with employers. Two of the reasons are that, so far, surveys indicate that HSAs are cheaper for companies than traditional insurance and that employers' costs for these plans are rising less rapidly.
That, of course, is what backers of these plans have long said would happen. Set up as a combination of a high-deductible insurance policy to cover serious illnesses and a tax-preferred savings/investment account for routine expenses, HSAs are supposed to curb health care costs by discouraging unnecessary use of medical services while encouraging careful shopping for those that are necessary.
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Health Savings Accounts.
Higher Co-pay Differentials Increase Generic Fill Rates
If you want workers to opt for generic drugs, raise the co-payment differential in your prescription drug plan. That's the lesson learned from a new study of 2004 prescription drug claims by the pharmacy benefit manager Express Scripts. "
A pharmacy benefit plan design that increases the differential between brand and generic co-payments by $10 can expect to achieve a 3% to 4% increase in the generic fill rate, which can translate into a 3% to 4% reduction in drug costs," says Jake Cedergreen, director of benefit design and modeling.
One way to boost generic usage without raising overall costs to patients, study authors suggest, is to reduce co-pays for generic medications but increase them by the same amount for branded medications. Employers that do so stand to save a lot of money, as several major brand-name drugs are scheduled to lose patent protection over the next five years. For example, the patent for Zocor, the cholesterol-reducing drug that reaped $3 billion in U.S. sales in 2004, will expire this year.
"Given the significant generic opportunity in front of us, the research points to co-pay differentials as a key driver for increasing generic fill rates," Cedergreen remarks.
Article provided by BenefitNews (2-23-06).
Healthier Bodies Support A Firmer Bottom Line
Wellness programs are becoming more elaborate as companies try to control benefit costs by building a healthier work force.
Instead of offering smoke breaks, some companies are encouraging employees to pump some iron, go for a long walk or run - even on company time.
Laura Rees, president of the Human Resources Association of Central Ohio said that companies are recognizing that poor physical fitness is linked to a number of health issues.
The Department of Health and Human Services reports that 75 percent of health-care costs are spent on chronic conditions such as obesity, cardiovascular disease and adult onset diabetes, that are preventable.
If companies can save money on health-care costs through prevention, it pumps up the company's bottom line, she said.
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Bizjournals.
Cutting The Fat Won't Cut It
A major new study discounts the protective benefits of a low-fat diet
Sticking to a low-fat diet isn't easy: It means salad dressing with more vinegar than oil, ballgames but no peanuts, and summer afternoons without any ice cream.
Yet for years, many people have been forgoing such pleasures in the belief that cutting fat automatically cuts the risk of heart disease and cancer, too.
Not so, says research published last week in the Journal of the American Medical Association. Women who trimmed the fat from their diets were just as vulnerable to colon cancer, breast cancer, and heart disease as women who did not.
The message? A low-fat diet isn't equivalent to a healthful diet, says Marcia Stefanick, a physiologist at Stanford University's Prevention Research Center, who helped run the government-sponsored study.
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U.S News and World Report.
President Endorses HSA Expansion
President Bush's State of the Union speech hailed some old ideas to reform health care, but didn't break much new policy ground.
As in years before, the president called for expanded health savings accounts, electronic medical records and medical malpractice reform. He proposed allowing HSA-users and employers to make tax-free contributions to cover all out-of-pocket costs, not just their deductible. He wants to let employers provide higher HSA contributions for chronically ill workers than for healthier workers, and offer a portable HSA that employees would take when they leave the job.
"We must confront the rising cost of care, strengthen the doctor-patient relationship, and help people afford the insurance coverage they need,” Bush said. “We will make wider use of electronic records and other health information technology to help control costs and reduce dangerous medical errors." Notably, he did not mention Medicare Part D, a domestic hallmark of his administration.
Critics feel Bush's ideas won't fix the problems causing worrisome health care inflation. House Minority Leader Nancy Pelosi (D-Calif.) comments, "The President’s health care plan fails to reduce health care costs, fails to increase access to quality health care for the 46 million Americans who do not have health insurance, and adds to our enormous deficit."
Article published by BenefitNews.com
Consumer-Driven Health Shifts Into Higher Gear
Now that early adopters have blazed the trail into consumer-driven health plans, the movement is gaining momentum, according to year-end figures from Mercer Human Resources Consulting.
Businesses of 20,000 or more employees jumped from 12% CDHP adoption in 2004 to 22% in 2005. About 19% of businesses with 10,000 to 19,999 workers and 10% of those with 5,000 to 9,999 employees had adopted a CDHP for 2005.
The cost of CDHP coverage in 2005 averaged $5,480 per employee, including employer contributions to HRA and HSA accounts, compared to $6,518 spent per employee under a PPO, Mercer reports. The median amount for employee contributions was $57 per month for single coverage and $206 per month for families, as compared to $78 and $290, respectively, for the same coverage under a PPO.
HRAs appear to be cheaper than HSAs for most patients. HSAs carried a median deductible of $1,200, but employers contributed a median of only $100. For HRAs, the median employer contribution was $750, and the median deductible was $1,250.
Meanwhile, A Cigna HealthCare analysis of 42,200 first-time users of consumer-driven health plans finds that these consumers generated an 8% reduction in medical costs. The CDHP-users showed a significant increase in usage of medications to control diabetes, asthma and high cholesterol, but the cost per day for the medications decreased, suggesting that CDHP-users made more cost-effective decisions, but did not skip medications.
Article published by BenefitNews.com
Can Boss Insist On Healthy Habits?
A year ago, the Weyco medical benefits firm in Michigan made news nationwide by sacking employees who refused to try to quit smoking.
But that was just the beginning. Now, the company is working even harder to force its workers to take better care of themselves.
In 2006, Weyco employees who refuse to take mandated medical tests and physical examinations will see their monthly health insurance premiums jump by $65. By next year, their annual insurance bills will grow by more than $1,000 if they still fail to follow instructions.
"The cost of healthcare is frustrating everybody, and we believe at Weyco that we have to heal ourselves," says Howard Weyers, company president and founder. "We think it's vital."
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Healthy Habits.
President Tells Insurers to Aid Ailing Medicare Drug Plan
With tens of thousands of people unable to get medicines promised by Medicare, the Bush administration has told insurers that they must provide a 30-day supply of any drug that a beneficiary was previously taking, and it said that poor people must not be charged more than $5 for a covered drug.
The actions came after several states declared public health emergencies, and many states announced that they would step in to pay for prescriptions that should have been covered by the federal Medicare program.
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Medicare Drug Plan.
Inhaled Insulin For Diabetics
Diabetics are getting an alternative to the regular needle jabs of insulin they've endured since the discovery in the 1920s of the hormone that controls blood sugar levels. Pfizer Inc. hopes to begin selling Exubera, the first inhalable version of insulin to win federal approval, by midyear.
Use of rapid-acting inhaled insulin will not replace the need to inject the hormone occasionally, the Food and Drug Administration said. It approved Exubera on Friday, a day after the multinational European Commission did so. Diabetics also will have to continue pricking their fingers to test blood sugar levels. But Exubera will provide an option for adults with type 1 or 2 diabetes who are reluctant to use the syringes, pens, and pumps currently needed to inject insulin, Pfizer said. In clinical trials, Exubera managed blood sugar levels just as well as injected insulin.
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Diabetics.
Integrating Health, Disease Management A Matter Of Dollars And Sense
As conclusive research pours in every day on the effectiveness and cost-effectiveness of health and disease management programs, more employers are asking: Why not combine the two?
Fueled by economics and common sense, the idea is, in fact, de rigueur among a growing number of health managers. Integration of health management and disease management into a single continuum of care seems to be gaining traction. The topic has dominated the industry conference circuit and is shaping the creation of new health products such as integrated health assessment tools.
Employee Benefit News checked in with four industry leaders to get their perspective on this trend.
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Employee Benefit News.
Exercise Helps Delay Onset Of Dementia
Older people who exercise three or more times a week are less likely to develop Alzheimer's and other types of dementia, according to a study that adds to the evidence that staying active can help keep the mind sharp. Researchers found that healthy people who reported exercising regularly had a 30 to 40 percent lower risk of dementia.
The study, published this week in the Annals of Internal Medicine, reached no conclusions about whether certain types of exercise helped more than others, but researchers said even light activity, such as walking, seemed to help.
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Alzheimer's
