Sunday, March 27, 2011

Weekend Update

Odds of a government shutdown on April 9, 2011, are increasing according to the Washington Post. reports that "With the Obama administration officials remaining tight-lipped about their preparations for a potential shutdown, the American Federation of Government Employees is taking a proactive approach in its planning, offering its members a detailed explanation of what the union sees as their rights and protections. According to the AFGE, "benefits provided through the Federal Employees Health Benefit Program should also continue uninterrupted" during a shutdown.

At last week's OPM AHIP Carrier Conference, OPM Director John Berry announced that that 280,000 young adults aged 22 to 25 joined the FEHBP as a result of the expanded dependent children coverage mandate in the Affordable Care Act. The FEHBlog thinks of the FEHBP as being composed of 2 million employees, 2 million annuitants, and 4 million dependents. That’s a 7% increase in dependent children and spouses. Last summer, HHS projected a mid-range take up rate of 1.24 million and a high-range take up rate of 2.12 million for the dependent coverage expansion in the entire country.  The FEHBlog would be curious to know the percentage of this group of 280,000 are in fact stepchildren or recognized natural children under age 22 who do not live with the enrollee and would not have been covered under the FEHBP in 2010.

While on this topic, it's worth pointing out a Business Insurance report that California is the most recent and largest of the states which have passed laws conforming their state income tax laws with the federal tax law permitting an exclusion from income tax for employer premiums paid to cover adult children up to age 27.

The RAND Corporation last week released a study on the efficacy of high deductible health plans in holding down health care costs.
Studying more than 800,000 families from across the United States, researchers found that when people shifted into health insurance plans with deductibles of at least $1,000 per person, their health spending dropped an average of 14 percent when compared to families in health plans with lower deductibles.
Health care spending also was lower among families enrolled in high-deductible plans that had moderate health savings accounts sponsored by employers. But when employer contributions to such savings accounts accounted for more than half of an individual's deductible, savings decreased among families enrolled in these so-called consumer-directed health plans.
However, over the same period, families that shifted to high-deductible plans significantly cut back on preventive health care such as childhood immunizations, cancer screenings and routine tests for diabetes. 
The drop in preventive care puzzles me because high deductible plans are permitted to cover preventive care in full -- outside the deductible.

On a personal note, the FEHBlog notes that the hospital where he was born -- Yale New Haven Hospital (at the time Grace New Haven Hospital) has announced plans to acquire the Catholic Church's hospital in New Haven, St. Raphael's. according to Modern Healthcare.  "Their boards have signed a letter of intent toward a deal that would involve 906-bed Yale-New Haven purchasing the assets of 406-bed St. Raphael [which is the only other acute care hospital in New Haven, Connecticut.] Under the proposal, Yale-New Haven would commit to a capital investment in the acquired facility of about $135 million, according to a news release." The consolidation trend has been spurred by the Great Recession and the Affordable Care Act.

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