Archive for January, 2011

Survey indicates mixed results for workplace wellness programs

January 23, 2011 Leave a comment

Nearly half (about 45 percent) of 850 employers responding to a reader survey by the HR Daily Advisor reported their companies have implemented workplace wellness programs.  Notably, opinion on whether they have actually improved the health of employees is almost evenly split.  Twenty two percent of the respondents indicated their wellness programs have improved the health of their workforces and about 23 percent responded that their employees are no healthier as a result of programs.  This latter data point is particularly critical insofar as the survey showed nearly 80 percent (681 respondents) identifying the growing burden of health care costs and requirements as the top human resource issue of 2011.

Workplace wellness programs can only go so far for office-based jobs where people typically sit eight hours a day and another hour or two commuting to that sedentary position.  Flexible work schedules and telework must be part of workplace wellness programs in order to free up more time time for meaningful amounts of exercise.  Particularly when information technology has advanced to the point information-based work can be done from most anywhere.  A walk in the parking lot and a few stretches are good but aren’t enough.

Plus too many jobs reward people for showing up rather than their work product.  Employers that provide employees a greater degree of control over their schedules and encourage them to use whatever unproductive time that is freed up to hit the gym and engage in sustained aerobic exercise are likely to see better results than from current workplace wellness programs.


State government not immune to health insurance crisis

State government employment was once regarded as one of the best deals going for health coverage, with rich benefit packages intended to compensate for lower salaries than those paid in the private sector.  No more if what’s happening in Nevada is indicative of a broader trend.

Nevada state workers now have health benefits that look like those offered employees by smaller private employers, replete with employer-funded health savings accounts (HSAs). And big deductibles to match.

Nevada state workers will pay annual deductibles of $1,900 for individuals and $3,800 for families in 2011.  The state will offset the deductibles by contributing to workers’ HSAs, $700 in the case of individuals, according to this story appearing over the weekend in the Nevada Appeal.

Individual health insurance market enters death spiral

January 5, 2011 1 comment

More evidence the individual health insurance market segment is entering a death spiral comes from the Los Angeles Times today.  The newspaper reports Blue Shield of California is boosting premium rates in rapid succession, resulting in 193,000 policyholders getting increases averaging 30 to 35 percent as the result of three separate rate hikes since October.  Under a new increase effective March 1, thousands of insureds are could see rate hikes of as much as 59 percent, according to The Times.

The San Francisco-based nonprofit insurer blames rising health care costs and coverage mandates for the increases.  A Blue Shield spokesman says despite the higher rates, the insurer would still lose “tens of millions of dollars” on its individual business segment in 2011.

No surprise there.  When an insurance pool goes into a death spiral, only the highest risks remain in the pool, boosting losses and requiring even higher premiums to cover them. That chases away healthier people who find premiums increasingly unaffordable, leaving behind the least healthy individuals.  And so on goes the unvirtuous cycle.  In the insurance business, it’s called adverse selection and has a terminal prognosis unless reversed.

It’s unlikely the individual market will survive as a viable market segment before the federal Patient Protection and Affordable Care Act (PPACA) requires insurers to end medical underwriting and take all comers in 2014.  That provision combined with the PPACA’s requirement that everyone purchase coverage is aimed at restoring the pool by spreading risk among both healthy and the sick.

However, it appears for the individual market  — with California representing the nation’s largest state market where about eight percent of those 65 and under get their health coverage — the PPACA will come too late to save it.  Whether it the PPACA will provide the foundation for a new individual health insurance market to emerge in 2014 is also an open question if health care costs continue their rapid rise.

More media coverage of weak initial interest in PCIPs

The Washington Post is the latest news outlet in the past few months to report on low initial enrollments in state Pre-existing Condition Insurance Plans (PCIP) established earlier this year under the Patient Protection and Affordable Care Act (PPACA).  During the fall, tepid interest in the PCIPs — referred to in the PPACA as the Interim High Risk Pool designed to provide coverage regardless of pre-existing medical conditions until health insurers must accept all applicants in 2014 — were also the subject of stories by the Associated Press and The New York Times.

The purpose of the PCIP is to help pare down the number of medically uninsured who can’t get coverage under current health insurance medical underwriting guidelines.  The Post reports state PCIPs are proving to have narrow appeal, attracting those needing very costly care and raising the question of whether the $5 billion appropriated by the PPACA to subsidize PCIPs will be enough before 2014 despite low early enrollments.

What’s likely suppressing enrollments are provisions in the PPACA that require PCIP premiums be set at standard market rates based on age.  For the oldest members of the pool, premiums are limited to four times those charged the youngest members of the pool.  That means those most likely to be served by PCIPs — those with pre-existing conditions in their fifties and early sixties — are finding the premiums out of reach, just as are individuals in that age range who are healthy, acceptable risks for individual health plans and insurers.

As federal officials stress it’s too early to draw conclusions, it remains to be seen whether the PCIPs will make any appreciable reduction in the number of medically uninsured Americans.  Early indications are not promising.  They suggest PCIPs will serve a narrow demographic of very sick but relatively affluent people aged 50-65 who are too young to enroll in Medicare and who need coverage for costly conditions as a hedge against medical bankruptcy.

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