Today, the Department of Health and Human Services announced that, "Trustmark Life Insurance Company has proposed unreasonable health insurance premium increases in five states—Alabama, Arizona, Pennsylvania, Virginia, and Wyoming. The excessive rate hikes would affect nearly 10,000 residents across these five states."The HHS statement continued, "In these five states, Trustmark has raised
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Posts filed under Health Care Trend
Inconvenient Facts for Both Republicans and Democrats—Neither Side’s Health Care Proposals Are Supported By Past Performance
I call your attention to Ezra Klein’s column in the Washington Post this morning.In it he cites data that has been out there for a long time but Ezra puts some perspective on it that never occurred to me before.Examining the Kaiser Family Foundation brief, “Health Care Spending in the United States and Selected OECD Countries” he points out, “Our government spends more [as a percentage of GDP] on
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Small Business Health Insurance Coverage: A Sobering Report From the Trenches
One of the things I enjoy the most about my travels across the country is meeting benefits brokers and health plan sales reps--they have the best feel for the real market and what their customers and their employees are up against.This very sobering and, from what I independently hear, accurate report about the small group health insurance market comes courtesy of Brian Klepper. Please note the
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Underwriting Cycle or Medical Trend Rate Cycle?
Analysts trying to predict the future of the health plan business who are looking for an underwriting cycle will miss the real turns in the market.Recent health plan earnings issues have once again raised the question, do we still have an underwriting cycle, and are we entering one?In my mind, anyone trying to understand the profitability of the health plan business who concentrates on whether or
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"Wall Street Comes to Washington"
The event I look forward to every year is "Wall Street Comes to Washington," Paul Ginsburg's (Center for Studying Health System Change) annual merging of Wall Street and policymakers in a lively discussion of health care from both perspectives.The last few years I have gotten to participate on the health insurance market panel. The session also had a panel concentrating on hospital, physician,
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What Do We Need to Do to Fix the Medicare Physician Payment Problem?
Whenever the subject of Medicare physician fee payments comes up on this blog, the reaction from physicians, particularly primary care docs, is predictable: "You can't cut us, we haven't had a Medicare raise in years, we are already dramatically underpaid, and if Medicare cuts our payments we are going to stop taking Medicare patients."There is no doubt that doctors have a point--particularly the
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Coventry Health--Another Reminder That This Isn't an Easy Business
Here are some comments from a first quarter earnings call Coventry management would sure like to take back.Yesterday, Coventry reported that its Medicare private fee-for-service business will miss its second quarter medical cost ratio projections by more than 300 basis points and that it will miss its prior second quarter estimates for its commercial medial cost ratio by a whopping 200 basis
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Wall Street Continues to Be Disappointed in Managed Care--Just Where Did They Think It Was Headed in the First Place?
United Health's earnings and revenue grew by 7% this quarter year over year and the stock fell by almost 10% yesterday.I'd hate to see them really screw up.United is the first to admit that they have some service and persistency issues but the fundamentals of their business continue on track.Wellpoint followed with another disappointing report today.Wall Street finally seems to be figuring out
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Health Plan Stock Prices Hard Hit Recently--Then There is John McCain
The recent hit HMO stocks have taken in the market has come because Wall Street has the jitters over revised earnings outlooks. Many health plan stocks have fallen by 50% in recent weeks.The Street is right to worry that the health plans are going to have difficulty pumping out more of the great and predictable earnings we've seen from them in recent years. But they also continue to miss a very
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Today's HMO Carnage on Wall Street
Maybe times have been just too good for so long that people have forgotten just what a challenging business this can be.After easy profits for the industry during a multi-year period when trend rates fell, today Wellpoint let us know nothing can be taken for granted.When the trend rate is steadily falling a monkey can make money. If an employer sees their claims go up by 9% the year before, it's
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A Slowing Economy--What Impact Will It Have On The Health Care Sector?
Health care is considered a business that tends to be resistant to economic downturns. Brian Klepper returns with a post asking just what the impact of a slowing economy will have on the health care sector. He specifically points to changes in real wages and home prices.Health Care and The Gathering Stormby Brian KlepperHere are two very interesting and frightening charts that my good friend
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The Lifetime Benefits Cap on Health Insurance Policies Often Needs Updating
In today's Washington Post, Chris Lee has a story about lifetime maximums in health insurance policies. Sometimes, these caps are as little as $1 million--particularly for individual health insurance polices.As health care policy goes, this is not a widespread issue. The number of people who incur medical costs over $1 million or $2 million is quite small and most health insurance coverage is at
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Four Big Trends Toward Better Health Care Cost and Quality
Brian Klepper joins us again today and calls attention to four key trends in the marketplace, all targeted on improving both the cost and quality of care.Four Big Trendsby Brian KlepperSeveral events and trends emerged over the last year that will reverberate throughout the health care marketplace in 2008 and going forward. While none of these dominated the trade press like some other issues--
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An Important and Disciplined Review of the Health Care Marketplace--The Latest Site Visit Report From 12 Markets
Good health care market intelligence is hard to come by. Information tends to come in the form of detailed and narrow, often backward looking, surveys that give us little texture for what key players are thinking. Or, at the other extreme, market information is often based on a relatively few almost random anecdotal impressions by "experts" as they do their work in the market.The highly respected
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Health Insurance Premiums Rose Only 6.1% in 2007--But This May Be The Last Year the Trend Rate Will Fall
According to the annual Kaiser Family Foundation survey of employer health benefit plans, the average employer premium rose 6.1% in 2007--the lowest increase in four years of successively falling trend rates.The increase was 13.9% in 2003 (the recent peak), 11.2% in 2004, 9.2% in 2005, and 7.7% in 2006.The average cost of family health insurance also rose to an incredible $12,106 while the
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Commercial Health Care Cost Trend—Finally Hitting Bottom?
Commercia health insurance cost trend peaked in 2003 when costs hit 13.9%. On the same basis, health care cost trend fell to 7.7% in 2006 (Source: Kaiser Family Foundation Survey).Will medical cost trend keep falling in 2007 or are we near the bottom?The health insurance business tends to benefit from falling trend rates. Employers and benefit consultants tend to look backward when health care
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Wall Street Comes to Washington--A Fascinating Discussion Between Wall Street Analysts and the Washington Health Policy Community
Paul Ginsburg, of the Center for Studying Health System Change, has been hosting a conference for 12 years where he brings some of the leading Wall Street analysts following the health care sector to Washington and puts them in a room with 400 Washington health policy people.The interchange, and the different perspectives, between the Wall Streeters and the Washington policy people is
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Why Does Health Insurance Cost So Much in New England?
I guess the easy answer is because health care itself costs so much in New England.As I travel around the country, I continue to hear that plan sponsors and insurers are all frustrated by the comparatively high health care (and insurance) costs in New England. For example, according to CMS, health care spending for Massachusetts residents exceed the national average by more than $1,500, or 33% in
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Humana Caps Annual Increases on Consumer-Driven Plans--Too Bad it Isn't a Real Guarantee
Humana says it will cap annual increases on self-insured consumer-driven plans for three years.Two problems:Humana is capping the costs of its "SmartResults" self-insured plans and only putting 40% of their fees at risk. If they were really putting their money where their mouth is they would be capping the cost of fully insured plans--and if they are so confident on their self-insured product,
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Health Care Trend Falling
According to a CMS report published in the latest issue of Health Affairs, health care spending increased 6.9% in 2005--the third consecutive year it has fallen.Given that medical cost trend, as reported by the health plan industry, fell again in 2006, I fully expect CMS to report a 2006 trend rate of around 6.5% when they do their calculation again next year. And, given that trend looks to be
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