Welcome!

As an insurance agent dedicated to helping my clients, this News Letter is offered as a resource to help you with solutions from the experts in the insurance industry to the difficult questions you and I have regarding the future of health insurance. 

Medical insurance rates continue to increase each year.  This upward spiral is cause for great concern for both employers and employees.  Some of the questions I hear from employers are:   “Are the insurance rates going to increase every year? When will the rate increases stop? Can I afford to continue to offer medical and dental insurance to my employees, or should I just terminate the plan? What other options do I have?   How can I let my employees know the real cost of insurance?”  What is the answer?  What are the options for employers?  How can we reduce the uninsured population? Unfortunately, there is no easy solution.

The above are all excellent questions that I continually hear from my clients, from industry leaders, and from other agents.  They are the topics discussed at industry forums and the questions we are all asking insurance companies.  The truth is, there are no silver bullets, we all need to be a part of the solution, we all need to be involved, not just the insurance companies.

What is Driving Health Care Cost Increases?

1. The Reality of Cost Shifts.  Medicare (federal) and Medicaid (state) comprise two large markets in health care.  In recent years, both programs have been under-funded, often resulting in a cost shift to commercial health plan members having increased rates while the insurance companies struggle to maintain financial viability.
2. New medical technologies cost more than older treatment and diagnostic methods. 
3. Utilization of medical services is increasing.   Estimates are that the number of Americans with chronic medical conditions will increase from 105 million to 120 million in the next decade.
4. Hospital and Physician services cost more.
5. Health Care and insurance marketplaces are catching up with costs.  Malpractice insurance rates have increased sharply, forcing some physicians to leave the industry.  Many states had an average increase of 20%; however, some specialties increased 75%.

How to Handle Spiraling Costs of Medical Insurance

Small employer firms are handling the spiraling costs of medical insurance and a sluggish economy in some innovative ways.  As insurance costs continue to rise, some employers are faced with having to pass these increases on to their employees, and some employers are lowering the benefits to keep the medical costs affordable.  Some firms are creating programs that give employees more incentive to be cost conscious.  Medical Savings Accounts (MSAs) and Health Reimbursement Arrangements (HRAs) can get employees more involved.  These latter two options usually partner with high deductible medical plans, to help the employee understand and share in the real cost of medical insurance.

Developing a Benefits Package

The reasons most employers want a benefits package is to attract and retain the most qualified employees.  To develop a benefits package you may want to consider these aspects:

Design: A benefits package must be competitive, comprehensive and affordable to be effective, and to retain the most qualified employees.

Communication: A well designed benefits package may go unused without effective communication of the benefits to employees so that they are aware of them.

Value:  Benefits need to be of value to the employee.  Find out what employees really need.

Service:  Employers must be able to administer the plans easily and employees must be able to understand and use the benefits.

Long-Term Care Insurance

One of the newest tools for financial stability is long-term care insurance. Long-term care is not covered by medical insurance, or Medicare.  

What is Long-Term Care?  Long-term care is a general term that includes a wide rage of services that address the health, medical, personal care, and social needs of people with chronic or prolonged illnesses, disabilities, and cognitive disorders (such as Alzheimer’s). These services are most typically required by the elderly, but may also be used by disabled people of any age.  57% of people needing long-term care are age 65+, however, 40% of people needing long-term care are ages 18-64, and 3% are under the age of 18.  You usually qualify for long-term care if you are unable to perform two or more activities of daily living: bathing, continence, dressing, eating, toileting, and transferring, (which includes mobility). Or, if you have a severe cognitive impairment such as Alzheimer’s disease or Senile Dementia.

Today, about 35 million people, approximately 14% of the total US population, are over age 65.  Over the next three decades, that number is expected to almost double, rising to 65 million or more – a full 20% of the total projected population in 2030. 

The fastest growing age group, those over 85, has grown six times as fast as the overall population since 1960.  Of the population over age 85, one of two has dementia.

The need for long-term care services will continue to increase in the coming decades. The longer we live, the more likely we are to require assistance.

Articles/Resources:

Two excellent studies available on-line from the Henry J. Kaiser Family Foundation-an independent national health research foundation are an excellent resource if you have questions about long-term care. The articles talk about who should buy long-term care insurance, and how to talk to your parents about long-term care.

“Who Should Buy Long-Term Care Insurance and What Should They Buy?”

The Henry J. Kaiser Family Foundation - an independent national health research foundation approaches the subject for two different purchasers:  1. working age adults, and 2. older purchasers.  The study is available on-line.

Advice on “How to Talk with Your Parents” about long-term care. 

This is a conversation I had with my own mother – and this article would have been very helpful for me.  The article is very thorough and helps you to know the subjects that need to be discussed, and how to talk about them; such as Medicare, who will be your parents’ caregiver when they need help, what kind of care they want, what can they afford, and where they will live when they need care?   Henry J. Kaiser Foundation has an on-line study. 

For more information on Long-Term Care, please contact Cathy Merz.   

Legislative Update:

Flexible Spending Accounts
The Internal Revenue Service  announced a new ruling regarding the use of flexible spending accounts (FSAs).  Individuals may now use FSA funds to purchase over-the-counter medicines such as allergy medication, cold medication and pain relievers otherwise not covered by an insurance plan.  Information on the recent ruling can be found on the IRS website.


EMTALA
Final regulations to the Emergency Medical Treatment and Active Labor Act of 1986 (EMTALA) have been issued.  EMTALA requires Medicare participating hospitals to provide appropriate medical screening and stabilization to any individual seeking care through the emergency department of a hospital.

Medical Malpractice
The Senate is expected to address medical malpractice again later this month.  The House passed H.R. 5, the Help, Efficient, Accessible, Low-Cost Timely Health Care Act (HEALTH), on March 13.  This legislation would cap non-economic damages at $250,000, limit punitive damages to $250,000, and create statute of limitations for medical malpractice suits.  The bill currently pending in the Senate, S. 11, sponsored by Senator John Ensign (R-NV), has had a more difficult reception.  Many Senate democrats are opposed to any restrictions on consumers to bringing lawsuits against physicians and other providers for alleged malpractice.  The newest legislative initiative is one towards establishing some caps strictly for lawsuits involving obstetrics.  The American Medical Association along with many other organizations, including NAHU, continues to advocate the passage of comprehensive medical malpractice reform.  The fate of the incremental legislation for just OBs remains to be seen.

RX Depot
The Department of Justice asked a U.S. District Court to stop Rx Depot and Rx Canada from importing both U.S.-manufactured and unapproved foreign-manufactured prescription drugs into the United States.  Previously, the FDA issued a warning letter asking the company to stop its marketing practices.  Both Rx Depot and Rx Canada told FDA they would not comply without a court order.  Oklahoma, Arkansas and Montana have already taken legal action against the companies.  As an example of the danger to consumers discovered by the FDA, FDA undercover investigators bought a prescription for the antidepressant Serzone that called for 60 pills.  Instead the company sent 99 pills of an unapproved foreign-manufactured version of the active ingredient in Serzone.  The package did not indicate that more than the prescribed number of pills was sent.  The incorrect and unapproved prescription could cause serious harm to the patient, including increased risk of liver failure, according to the FDA.

For more information on health insurance related bills, please look on-line at www.nahu.org.

How to Find Your State Legislator:

Oregon

Washington