AARP, the largest U.S. membership organization for people 50 and over, was accused in a lawsuit of breaching its duty to members who enroll in group-endorsed health care plans.

The group collects hundreds of millions of dollars annually from insurers who pay for AARP’s endorsement of their policies, according to a complaint filed in federal court in New York. Because of the group’s “relentless appetite for royalty revenues,” AARP permits insurers to make excessive increases in the insurance premiums charged to its members, the suit says.

“By 2007, the royalties from AARP-endorsed health care providers generated 60 percent of the revenue of AARP,” according to the complaint. “AARP received nearly $500 million in royalties.”

The suit, by AARP member Lucille Roussin, who lives in New York, seeks unspecified damages and asks to be designated as a class action, or group, lawsuit on behalf of others.

A spokeswoman for Washington-based AARP, which was formerly called the American Association of Retired Persons, didn’t immediately return a call. The not-for-profit group has a membership of 38 million people who are 50 or older, according to the complaint.

The case is Roussin v. AARP, 09-cv-586, U.S. District Court, Southern District of New York (Manhattan).

Tags: aarp, AARP Insurance

A new report shows that Delta Dental maintains the largest network of dentists in the nation, a position the nation’s largest dental benefit system has held for more than five decades. The report by NetMinder, an independent firm that provides data on providers and managed care networks to the healthcare industry, indicates that the Delta Dental network has more than 123,000 dentists, totaling more than 62,000 dentists than the next closest national competitor.

“Having the largest network of dentists in the nation is tremendously important because it offers cost savings to employers and employees through negotiated discounts, as well as convenience to our 51 million subscribers,” said Kim Volk, president and CEO of Delta Dental Plans Association. “Our network helped employers save more than $6 billion in decreased claims costs last year.”

Additionally, Delta Dental’s network is locally developed and controlled exclusively by its member companies, said Volk.

Delta Dental offers comprehensive benefits packages that combine cost-saving managed care features with flexible plan designs. Enrollees realize significant out-of-pocket savings from its “no balance billing” provision. Under this provision, dentists in the Delta Dental network accept negotiated fees as payment in full, and can’t pass costs along to patients for any differences between submitted charges and the charges allowed under Delta Dental’s contractual agreements. Enrollees seeking services from network dentists only have to pay deductibles and copayments required by their plans.

In addition to maintaining the largest network in the country, Delta Dental also regularly audits its network to ensure that all participating dentists meet comprehensive credentialing standards.

The not-for-profit Delta Dental Plans Association (www.deltadental.com) based in Oak Brook, IL, is the leading national network of independent dental service corporations specializing in providing dental benefits programs to 51 million Americans in more than 93,000 employee groups throughout the country.

Tags: delta dental

It’s tough finding health insurance that really suits your needs these days. It’s even tougher trying to find reasonable rates. Lots of people swear that searching for health insurance quotes online is the “cheapest” way to go and the fastest.

Well perhaps it may be fast, but it certainly isn’t the cheapest way to go. If you really want a deal, shop locally. More on that in a moment.

If you insist on shopping online then remember you likely will NOT get the preferred rate that is shown on websites. Why is this? This is because almost everyone has a pre-existing health condition. Since most health insurance rates are determined on your medical history, the minute you tell the insurance agent you have XX condition, your category changes. So don’t fall for what you see on the Net.

Now, about talking to local insurance agents, sure talk to them online if you don’t want to call personally; but definitely, lead local and localize your health insurance needs. Here’s why: local agents have the insider scoop on what is going on in your network areas. They are familiar with the hospitals and what type of service they provide, and they are also well-acquainted with what the area doctors offer. This is good because you know right away what will and won’t work for you.

If you try to get this type of service online at an insurance company in another state, you will only succeed in getting a totally generic package that might not work in your local network area. This is like trying to fix your car on your own – if you have the tools and know how, it usually goes OK, but if you don’t then that’s another story altogether.

Speaking to a local insurance agent will save you endless hours of surfing, comparing, figuring, fussing, worrying and calculations. Your local agent will tailor a plan for YOU to suit your circumstances and do it using local information, so you both know what you’re referring to when you discuss physicians and hospitals. Local agents also provide that valuable one-on-one service that a faceless online insurance company halfway across the nation does not offer.

Author: Ryan Kennelly is a Senior Insurance Consultant at Illinois Health Agents.

Tags: illinois health insurance quotes, illinois individual health insurance, local insurance agent advantages

Health-care spending grew at its lowest rate in nearly a decade in 2007, but it continued to swallow an ever-bigger portion of U.S. gross domestic product and family budgets, a new federal study shows.

Restrained by a sharply slower growth in prescription-drug spending, the nation’s health-care tab grew 6.1% to $2.2 trillion, or $7,421 a person. That’s down slightly from the 6.7% growth in 2006, according to the study being published Tuesday in the journal Health Affairs.

The data, which tally both private and public health spending, hardly represent a reprieve from soaring medical costs. Health-care spending again expanded faster than the overall economy, suggesting its share of GDP will climb as the economy remains mired in a protracted recession. In 2007, health care consumed 16.2% of GDP, up from 16% in 2006.

The findings are likely to add fodder for all sides of the health-overhaul debate expected to take center stage in Washington this year. As health costs continue to mount, some Democratic leaders argue an ambitious overhaul can’t be delayed. Other lawmakers say it would be far too costly, particularly as President-elect Barack Obama and Congress need to contend with a broken economy.

While most health-care services grew at the same rate or faster in 2007 than in 2006, the pace of prescription-drug spending slowed to its lowest rate in 45 years, climbing 4.9%, compared with an 8.6% increase the year before, the study found. The slower growth stems primarily from big shifts in the pharmaceutical landscape.

Generic drugs, which can be 80% cheaper than their brand-name versions, have found wider use as a wave of blockbuster drugs — such as anticholesterol pills Zocor and Pravachol, and antidepressant Zoloft — have lost patent exclusivity in the past three years.

Under pressure after several safety debacles, the Food and Drug Administration has stepped up the number of “black box” safety warnings it issues on drugs, slowing growth in drug spending. In addition, the pace of Medicare drug spending is leveling off some after the initial cost of launching the federal program’s drug benefit in 2006.

Going forward, there are signs the deepening economic slump will compound the prescription-drug slowdown. More consumers — facing steeper copayments and deductibles, or no coverage at all — are cutting back on medicines. The number of filled prescriptions were sluggish last year, and even fell in the second quarter, the first negative quarter in at least a decade, according to market researcher IMS Health.

That’s an ominous sign for drug makers, already struggling to discover new drugs to replenish their pipelines. Pills for such chronic conditions as diabetes and cardiovascular disease are vulnerable, since patients tend to think they can do without treatments for so-called silent diseases more easily than for conditions such as cancer or HIV.

While health-care spending is rising at its slowest rate in years, it still continues to climb much faster than GDP or wages. “Recent history has shown that through the downturns, health spending has remained somewhat insulated from the effects of a slowing economy and has increased as a share of GDP,” said Micah Hartman, the study’s lead author and a statistician with the agency that runs Medicare, the federal health program for the elderly and disabled.

The government also is picking up more of the nation’s health-care tab, according to the study. Federal, state and local governments paid for 46.2% of health-care spending in 2007, up from 45.3% in 2004 and 37.6% in 1970. Public health spending also grew faster than outlays by employers and other private sources in recent years.

The government’s bulging share was partly caused by changes in Medicare, the authors said. The drug benefit, launched in 2006, cost Medicare $40.5 billion in 2006 and $47.6 billion in 2007, according to the study.

Original Wall Street Journal article: http://online.wsj.com/article/SB123120690670756189.html

NY Times — National health spending grew in 2007 at the lowest rate in nine years, mainly because prescription drug spending increased at the slowest pace since 1963, the government reported Monday.

But other types of health spending rose at a brisk pace, pushing the total to $2.2 trillion, or 16.2 percent of the gross domestic product, a record. Spending averaged $7,421 for each person. Total health spending rose 6.1 percent, compared with a 6.7 percent increase in 2006.

The report, published in the journal Health Affairs, offers the most current and comprehensive data on the nation’s health care sector, providing a context for the sweeping changes that President-elect Barack Obama has promised.

In recessions, when the economy contracts, health spending usually continues to increase. So federal economists and statisticians said that health spending probably accounted for an even larger share of the nation’s economic output in 2008. The economy sank into a recession in December 2007, according to the National Bureau of Economic Research, a private group that tracks business cycles.

Retail spending on prescription drugs rose 4.9 percent in 2007, to $227.5 billion, the government said. By contrast, drug spending rose by 8.6 percent in 2006 and by an average of 9.4 percent a year from 2001 to 2006.

The main author of the report, Micah B. Hartman, a statistician at the federal Centers for Medicare and Medicaid Services, listed three reasons for the deceleration of drug spending.

More prescriptions are being filled with generic drugs, Mr. Hartman said. Drug prices are increasing more slowly, and safety concerns have depressed sales of some drugs, he added.

In 2007, Mr. Hartman said, 67 percent of prescriptions were filled with generic drugs, up from 63 percent in 2006 and 60 percent in 2005. Moreover, he said, in 2006, the Food and Drug Administration approved lower-cost generic versions of the allergy medicine Flonase, the cholesterol drugs Pravachol and Zocor, the antidepressant Zoloft and several other widely used brand-name products. In 2007, the sleeping pill Ambien also lost patent exclusivity.

Dr. Robert S. Epstein, chief medical officer of Medco Health Solutions, which manages drug benefits for more than 60 million people, said the approval of generic versions of blockbuster drugs in 2006 and 2007 “had a tremendous influence” in slowing the growth of drug spending.

Over all, the report said, prescription drug prices rose 1.4 percent in 2007, much less than the 3.5 percent growth recorded in 2006. The slower growth results, in part, from generic drug discount programs offered by large retail chains like Walmart, the government said. Consumer groups have found much higher price increases for many top-selling brand-name drugs.

Federal health officials said the trend in drug spending was also influenced by increased safety concerns, reflected in the number of serious alerts, known as black-box warnings, issued by the F.D.A.: 68 in 2007, compared with 58 in 2006 and 21 in 2003.

With the exception of prescription drugs, spending for most other health care goods and services grew at about the same rate as in 2006, or faster. And some of those other categories are more significant in the overall picture. Prescription drugs account for 10 percent of all health spending, much less than either hospitals (31 percent of the total) or doctors (18 percent).

Spending on hospital care rose 7.3 percent in 2007, to $696.5 billion, compared with an increase of 6.9 percent in 2006, the government reported.

Spending for doctors’ services rose 5.9 percent in 2007, to $393.8 billion. That is less than the 6.4 percent increase in 2006, in part because Congress reduced Medicare payments to doctors for imaging services.

Out-of-pocket spending on health care increased 5.3 percent in 2007, to $268.6 billion. Such expenses have been growing more slowly than total health spending, but faster than household income, so many consumers have felt a squeeze on their pocketbooks, federal officials said.

Estimated at costing $54 billion annually, health care fraud increases health care costs for insurance companies, which get passed on to policyholders in higher premiums. Some recent patterns of health care fraud include:

• Billing for “free” screenings and services not provided: The provider is accused of billing for “free” gait testing, office visits and orthotics. The doctor offers these services to unsuspecting individuals and subsequently bills their insurance company at exorbitant rates for these “services.” Individuals usually have no particular health complaints and often “free” items were not medically necessary or ever provided.
• Unnecessary diagnostics: Several scanning facilities, often in collusion with doctors, are alleged to be part of a scheme to artificially increase the number of patients receiving scans, billing for unnecessary services to dramatically increase their income.

Individuals can help avoid unnecessary diagnostics by asking why a specific test is needed, who is providing it, and how results will be used to manage their care. By law, doctors must tell you if they have a business interest in the entity performing the procedure.

Tags: health care fraud, types of health care fraud

All Blue Cross Blue Shield of Illinois Medicare Prescription Drug Plan (PDP) members will have access to the Blue Extras program effective January 1, 2009. Blue Extras is a value-added benefits program that offers discounts on health and wellness products and services.

Members just show their PDP ID card at the vendor and receive the applicable discount. This will be included in each new member’s welcome kit. Since existing members do not receive a new welcome kit each year, they are being notified of the program via the BCBS member newsletter.

On January 1, 2008, the IRS introduced new regulations for debit cards specifically used to reimburse eligible healthcare expenses for Flexible Spending Accounts (FSAs). The Internal Revenue Service mandated that Flexible Spending Account (FSA) debit cards may not be used at stores such as grocery stores, wholesale clubs, supermarkets, discount stores, etc unless those merchants have complied with and participate in the Inventory Information Approval System(IIAS). The IIAS system automatically flags eligible healthcare items and allows those transactions to be automatically approved.

The IRS previously mandated that stores classified as drug stores and pharmacies would also be required to follow the IIAS standards starting January 1, 2009. The IRS recently extended the deadline for pharmacies and drug stores to July 1, 2009. Starting July 1st, debit card swipes at non-participating drug stores and pharmacies will be denied. Participants can use another form of payment and submit a claim form with supporting documentation for reimbursement. We encourage participants to check and see if the stores they use are compliant with IIAS. To find a listing of approved merchants please visit www.sig-is.com.

Tags: Debit Cards, Flexible Spending Accounts, FSA, FSAs, Interntal Revenue Service, irs

The rising rate of unemployment has contributed to an increase in the number of uninsured people because workers who lose their jobs often lose their health benefits, the New York Times reports. According to the Bureau of Labor Statistics, about 10.3 million U.S. residents were unemployed in November, an increase of 36%, or 2.8 million people, since January of this year, and 71%, or 4.3 million people, since January 2001. Public health experts estimate that for every one worker who loses health coverage, at least one child or spouse with coverage under the same policy also loses insurance.

The increasing number of uninsured because of job losses “adds urgency” to efforts by lawmakers who are pushing for universal health care, according to the Times. Sen. Sherrod Brown (D-Ohio) said, “This shows why — no matter how bad the condition of the economy — we can’t delay pursuing comprehensive health care,” adding, “There are too many victims who are innocent of anything but working at the wrong place at the wrong time.”

Harvey Brenner, a professor of public health at the University of North Texas and Johns Hopkins University, said that historically during recessions, with declines in national income and increases in unemployment, “you often see increases in mortality from heart disease, cancer, psychiatric illnesses and other conditions.” In addition, hospitals also are facing pressure, as economic downturns historically mean a decline in revenue and an increase in the number of uninsured people seeking care, especially in emergency departments. Erin Al-Mehairi, a spokesperson for Samaritan Hospital in Ashland, Ohio, said, “We have seen a significant increase in patients seeking assistance paying their bills,” adding, “We’ve had a 40% increase in charity care write-offs this year over the 2007 level of $2.7 million.”

The Times profiled Archway & Mother’s Cookie, which closed its factory in north central Ohio this fall, leaving about 275 people without a job and their “excellent health benefits” (Pear, New York Times, 12/7). The Wall Street Journal also profiled the closing of the company and employees’ resulting loss of health coverage. According to the Journal, “In some cases, people who are laid off can maintain their group health benefits under” COBRA, but “that is not an option for former Archway employees because their group health plan no longer exists” and the employees “generally cannot afford to buy insurance on their own” (Dugan, Wall Street Journal, 12/6).

Small Businesses Cutting Benefits
Many small businesses are cutting employee benefits and reducing or eliminating their contributions to health care insurance and retirement plans in an attempt to remain in business or avoid layoffs, the AP/Bergen Record reports. Some companies also are shifting health care costs by switching employees to high deductible health plans.

Tags: unemployment insurance, uninsured

Based on a report published in June 2008 by Families USA, it’s hard to find a state that does less than Illinois to protect consumers purchasing individual health insurance.

Families USA is an advocate for universal health care and a frequent critic of the insurance industry. But its research is well-respected. Families USA’s latest analysis explores the extent to which consumer protections are available for people who purchase individual insurance. This is the kind of policy people buy when they’re between jobs, working for themselves or employed by a company that doesn’t offer employer-sponsored group insurance.

Illinois has adopted a “hands-off” regulatory policy toward individual insurance, according to the report, which is based on a survey of insurance commissioners in all 50 states. There’s no guarantee here that insurance companies sell coverage to all applicants, a policy known as “guarantee issue.”

Admittedly, this isn’t common: only five states (Maine, Massachusetts, New Jersey, New York and Vermont) require insurance companies take all comers, including those with pre-existing conditions.

Nor are there any restrictions here on companies’ ability to raise premiums based on an applicants’ health status. In other words, even if policies are available in Illinois, the price may be out of sight.

By contrast, Maine, Massachusetts, New Jersey, Oregon, New York, Vermont, and Washington won’t let insurance companies vary premium prices for consumers based on their health. Minnesota and New Hampshire allow premium prices to rise a maximum 25 percent.

Often, insurers will sell policies to consumers with pre-existing conditions but exclude covering for those conditions for a specified period. Many states have regulations that limit how long these exclusions can last, typically requiring full coverage after six months to one year. Illinois doesn’t.

Half the states also limit the period of time that insurers can go back in someone’s medical history looking for evidence of pre-existing conditions that can be excluded from coverage. Illinois has no such limitation.

Illinois is among 44 states that don’t intervene when insurance companies decide to limit or revoke coverage for individual policyholders. The state gets credit, however, for ensuring policyholders have the right to appeal when coverage is revoked. Similarly, Illinois guarantees that consumers’ disputes with insurers will be reviewed by a third party and that reviewers’ decisions will be binding.

For its part, the insurance industry often argues that state regulation tends to drive up the cost of coverage and impair consumers’ access to affordable policies. But there’s growing conviction in health policy circles that individual insurance is ripe for an overhaul.

Families USA doesn’t indicate which states are “best” or “worst” when it comes to protecting individual insurance policyholders in its reports. But high marks go to Connecticut, Massachusetts, which recently overhauled its insurance market and enacted universal coverage, New York, and Oregon, among others.

Tags: illinois health insurance, Illinois health insurance protection, illinois individual health insurance