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2010 Medical Renewals


Observations as of 02.01.2010

We are seeing certain carriers with very high 2010 renewals, while others are running lower than normal.  For the high side carriers this would seem to be the results of either poor past underwriting, higher and more costly utilization, initial reaction to perceived action coming from Washington, shifts in group demographics (due to the shift in employment) or our favorite new tool - predictive modeling (this is where they predict coming claims and charge for the unknown now).   We are seeing small groups (<150), experiencing increases from 0 to 82%.  Concerning medical trend we are tracking it at about 12.8% which is about 1.5% higher than last year.

Larger groups are experiencing renewals in line with their medical experience.  The carriers will reward bad experience with a bigger and quicker hit to premium than in the past years.

We are seeing more employer considering higher deductibles.  Some deductibles are running $2,500 with a few employers starting to consider $5,000 deductibles.  Out of pocket limits are approaching $6,000.  Employers for the first time are considering the removal of office visit copays and some looking at pharmaceutical cards.  We caution restraint in the removal of the drug cards.  It's in the interest of the employers cost to help employees with their medication as the consequences could be costly treatment due to the missed Rx.  We do believe cutting the card dependence can result in significant medical savings.  We believe the process need to synced with reality due to dependence on them.

Consider encouraging your employees to take advantage of the generic drug programs run by the big box retails such as Costco, Wal-Mart, Target, etc.  The retailers provide a 30 day supply of generics for $4, and a 90 days supply for $10.  Good deal, cost efficient, and it is a step towards weaning employees from the cards.

Consider better employee communication, health awareness programs and employee incentive programs as the big winner for long term positive results providing improved claim control, better return on employee cost, a overall healthier and more active workforce.  We can provide access to all these products.

  01.29.2010


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