CIGNA Shows an Intergrated Medical & Disability Program

Individuals covered by CIGNA's integrated medical and disability programs who have taken a short-term disability leave are more likely to return to work, according to newly released research by CIGNA. In fact, the study shows marked improvement in return-to-work rates for these claimants of at least five percent and up to 37 percent, as compared to their counterparts in non-integrated, disability-only plans.

Dr. Woolf said that based on these findings, CIGNA has extended the discounts it offers to employers who purchase both medical and disability programs from CIGNA. The discounts include savings on both disability and health care coverage when these programs are purchased together.

CIGNA's analysis demonstrates that employees with disability claims make up only a small percentage (five percent) of the total employee population yet represent 37 percent of total employee medical costs. Further, 80 percent of employees with disability claims also fall into the top 20 percent of health care spenders. This highlights the need to assist employees with disabilities, or potential disabilities, as a means to contain health care costs.

"Essentially, we are seeing a small percentage of the employee population - disability claimants with chronic- or lifestyle-related conditions - contributing to a large portion of medical expenses," said Jeff Kang M.D., chief medical officer for CIGNA HealthCare. "Our early identification of at-risk employees, and proactive outreach to these employees, leads to a healthier, more productive workforce and also reduces costs."

More than 80 percent of employees included in the analysis who were disabled had chronic and/or lifestyle-related conditions. The most expensive and frequent conditions driving both medical and disability costs included musculoskeletal problems and heart disease. In this analysis, participants in CIGNA's disease management programs for heart disease and low back pain had a lower rate of occurrence of disability and shorter duration for disabilities that did occur.

"Our goal at CIGNA is to prevent chronic illness from occurring by helping people learn about and modify the health risks that contribute directly to the development of these illnesses," said Dr. Woolf. "But when these illnesses do occur, our disease management programs help our members better manage their condition, lessening the impact on their health, well-being and productivity. These programs are showing a positive return on investment and have proven to be effective in improving health outcomes and lowering medical costs for our customers."

Findings from the analysis also suggest that use of Family Medical Leave (FML) may help predict future disability claims. Employees on FML were five times more likely to have a subsequent short-term disability claim than those not on FML (24 percent vs. 4.5 percent). Further, those on FML for a family reason were 50 percent more likely to have a subsequent short-term disability claim for behavioral illness than those on FML for other reasons.

"Understanding the drivers of absence and disability can lead to cost savings and productivity improvements," said Dr. Woolf. "In fact, more than 60 percent of company chief financial officers see a strong link between health, productivity and the bottom line.(1)"

"Our integrated programs allow us to analyze the various facets of an individual's health and uncover clinical predictors early in the process to help us identify those at risk for a disability claim," explained Dr. Woolf. With that information CIGNA is able to match at-risk individuals to health and wellness programs that are designed to prevent or manage conditions and achieve better outcomes and shorter disability durations.

For example, when an individual files a disability claim, a referral is automatically sent to CIGNA's disease management program if applicable. In addition, all new disability claimants are offered a referral to CIGNA's employee assistance program, if available. This interaction across the various behavioral, disability and health care programs at CIGNA helps to ensure that the most appropriate resources are provided to the individual at the right time to achieve the best outcome possible.

"Employers have the opportunity to increase productivity and reduce absenteeism while providing their employees with a more comprehensive health benefits package through an integrated offering," said Dr. Doug Nemecek CIGNA national medical director for behavioral health programs. "CIGNA's approach to furthering the health and wellness of its members extends beyond the narrow view of just addressing a medical situation. Our programs are designed to help members address all their needs whether they are medical-, behavioral- or disability-related."

The analysis included claim data from 40 accounts, comprising 300,000 employees, over a two-year period. The 40 accounts included those that had integrated medical and disability benefits, those that had both medical and disability coverage through CIGNA, but who did not integrate the programs, as well as CIGNA Group Insurance- and CIGNA HealthCare-only accounts.

Bush Decides to Leave a Legacy...

For just the fourth time during the Bush administration, the president put to use his veto powers, rejecting a bipartisan bill to provide government health coverage to millions of low-income children.

In a statement sent to the House of Representatives, Bush said he vetoed the bill "because this legislation would move health care in this country in the wrong direction." He said it would have expanded the program too much to cover children from wealthier families and would have displaced private insurance for many.

In vetoing the bill to reauthorize and expand the State Children's Health Insurance Program, the president turned an otherwise routine exercise _ the renewal of a popular and effective program _ into a heated political struggle over the direction of American health programs.

In doing so, the president isolated himself politically from many members of his own party, 43 Democratic and Republican governors and more than 300 child advocacy, health industry, religious and civic groups that support the measure. He also provoked what could become one of the nastiest domestic policy fights of his presidency.

The SCHIP program was established in 1997 to help cover children whose families earned up to twice the federal poverty level. Medicaid and SCHIP have helped cut the uninsured rate for low-income children by about a third, but some 9 million youngsters remain without health coverage. The bill Bush vetoed would cover an additional 3.8 million uninsured youths by 2012 and increase overall program enrollment from 6.6 million youngsters to more than 10 million.

The vetoed legislation would have boosted SCHIP funding by $35 billion over five years, to $60 billion. The money would have come from steep tax increases on tobacco products, including a 61-cent hike to $1-per-pack for cigarettes.

Bush proposes increasing SCHIP funding by $1 billion a year over five years, to $30 billion. That's about 36 percent of what the nonpartisan Congressional Budget Office says is needed to preserve current program levels.A temporary funding agreement keeps the program afloat through Nov. 16, but Democrats plan to keep pushing their version of the legislation until the president changes his mind or until they can persuade a two-thirds majority in the House of Representatives to override his veto. A two-thirds majority already favors the full-funding measure in the Senate.

The House isn't expected to attempt to override Bush's veto for at least two weeks.The House approved the bill 265-159 last week, with 45 Republicans voting for the measure. To override Bush's veto, about two dozen Republicans must switch their votes and join the 265 lawmakers who favored the measure.On Tuesday, House Minority Leader John Boehner, R-Ohio, said, "We feel very comfortable that we have the votes to sustain" the veto.But mounting political pressure could change all that by mid-October, when the Democrats are expected to try an override vote.

This is exactly what went wrong over the last eight years, there were so many times in which our president could have done something right but instead made the completely wrong decision. On October 9th, I did everything I could to try and analyze the problems with the American health care system and the privatization that is going on within it. After the bill was passed by congress, Bush sent his veto citing "the direction of the American Health Care System." I believe the issue here is our president's state of mind, and the fact that he can not think socially in the least. With all this being said, here's to you Mr. President, for all those memorable little things you did for this fair nation, Thank you and God Bless.....

The Terrorism Risk Insurance Act: a Look at Who's Benefiting

Taxpayers save money and businesses are better protected with the Terrorism Risk Insurance Act (TRIA) in place than if the act is allowed to expire, according to a recent study by RAND Corp.

The analysis found that TRIA, authorized by Congress following the attacks of Sept. 11, 2001, allows the insurance industry to play a larger role in compensating losses caused by smaller -- and presumed more likely -- terrorist attacks by transferring some of the risk for the largest attack to the government.

The study, which is the first to consider the effect of TRIA on government assistance for uninsured loses after an attack, shows that taxpayers are better served if TRIA remains in effect rather than being allowed to expire by Congress.

The study also says that taxpayers and policyholders could also benefit if the law were expanded to better address nuclear, chemical, biological and radiological (NCBR) attacks.

The study was conducted by the RAND Center for Terrorism Risk Management Policy. RAND is a nonprofit research organization.

Legislation is currently being considered by Congress that would extend and modify TRIA. The proposed legislation would require insurers to offer coverage for NCBR attacks and includes several additional provisions that transfer some of the risk for attacks on the scale of 9/11 or larger to the government.

The RAND study compares the performance of the current TRIA program and several alternative government interventions in the market for terrorism insurance over a wide range of scenarios.

The RAND study also claims that TRIA, as currently configured, has positive effects on the insurance market for conventional terrorist attacks. The proportion of property insurance policies with terrorism coverage is higher and uncompensated losses are lower for conventional attacks with TRIA than without TRIA.

For conventional attacks resulting in less than $40 billion in property and workers' compensation losses (which is larger than 9/11), TRIA typically reduces taxpayer cost because government outlays through the program are more than offset by reductions in government compensation for uninsured losses after an attack, according to the study. TRIA also increases the role the insurance industry plays in providing compensation for such attacks, as opposed to the role of insurance without TRIA in effect.

Because the probability of a large attack is assumed to be far lower than the probability of smaller attacks, that is, those below $40 billion in damages, TRIA can offer benefits while reducing average annual taxpayer costs, RAND reports.

"Overall, TRIA improves the functioning of private insurance markets and ultimately saves the taxpayers money because it transfers risk for the largest terrorist attacks to the government," said Lloyd Dixon, a RAND economist and study co-author. "In return, the insurance industry is able to play a larger role in compensating losses caused by smaller, and more likely, attacks."

Dixon said a gap remains in the nation's ability to manage terrorism risk because the coverage for nuclear, biological, chemical, and radiological attacks is rarely available even with the current TRIA program. Thus, the RAND study examined possible changes to TRIA that would require insurers to offer policies that cover losses due to both conventional and NBCR attacks.

The study, "The Federal Role in Terrorism Insurance," finds that increasing assurances that insurers will not be liable for insured losses over the current $100 billion TRIA cap and lowering the amount that insurers would have to pay before government support would be available (the so-called "deductible") could improve outcomes for a program requiring insurers to offer policies that cover both conventional and NCBR attacks.

"Hardening the cap and reducing the deductible are both important to getting the best result from a TRIA program that includes NCBR coverage," said study co-author Robert Lempert. "It's a robust strategy that effectively addresses the existing insurer uncertainty over how exposed they are to losses over the cap."

Other authors of the RAND study include Tom LaTourrette and Robert T. Reville.

Source: The RAND Center for Terrorism Risk Management Policy, check them out at http://rand.org

Heath Plans Expect Increase in Premium Pricing

Health plans are expecting premium rate increases in 2008 of 7.4%, 0.8 percentage points lower than last year's expectation of 8.2%. This is the fourth consecutive decline in the rate of premium growth.

Sherlock Company conducted this survey in September of 2007. The survey contained 76 responses, comprising 20.7% of health plans serving commercial members nationwide.

Separately, the survey notes that the East South Central region is expected to have the highest premium rate increases and the Pacific region is expected to have the lowest. Also, the survey indicates that plans expect to post increases before buy-downs of 9.4%, down from 10.4% in 2007. This implies an increase in consumer cost sharing of 16.2%. Health benefit ratios are expected to increase by 0.5 percentage points on average, and health care costs are expected to increase by 8.0%.

So, what can be done for a health care system that has become almost completely privatized? The answer, is nothing. The economy, which, especially under the current administration, has pushed towards more pure capitalistic ideals, is the reason for this rise in heath care premiums. With states like Massachusetts forcing all people living in the commonwealth to have some form of health care, the health care providers are cashing in. Health care is not a national issue, but rather one of global concern. Many countries are not giving adequate care to citizens that can not afford these premiums. It is disheartening to say the least, but something needs to be done, with presidential hopefuls speaking of all of the pressing issues, one thing that needs to be on the forefront of the 2008 elections is that of health care.

How To Mitigate Disaster Risks

A natural catastrophe commission bill scheduled for consideration today by the Senate Banking Committee would provide for an important examination of how best to mitigate disaster risks and deal with the after-effects of these events, according to the Property Casualty Insurers Association of America (PCI).

The bill establishing a commission to look at the various aspects of natural disasters and insurance includes evaluating whether there may be catastrophe exposures that are beyond the capability of the private market and individual state catastrophe funds to address. PCI believes that there is a need to encourage new capital to enter property insurance markets and facilitate innovative ways to cover difficult risks through enacting greater regulatory flexibility and lower regulatory costs. The commission's duties, as outlined in the bill, include looking at these issues as well as enactment and enforcement of tougher standards for building codes, property development and other loss prevention and mitigation requirements that are also vital when looking toward the future and evaluating this issue.

“PCI believes that developing and enacting effective public policy to address future natural catastrophes is one of the most significant issues facing the insurance industry,” said June Holmes, PCI’s interim CEO. “Experts agree that the nation faces the prospect of more frequent and severe natural disasters in the coming decade. Moreover, significant property development, population growth, and rapidly rising real estate prices in areas prone to natural disasters exacerbates the potential for increasingly larger human and economic losses as a result of such disasters, requiring stronger mitigation as well as greater financial resources to fund future recovery and repair efforts.”

PCI believes that it may be necessary for the federal government to offer liquidity protection to state catastrophe funds at the highest level consistent with the maintenance of stable markets and avoidance of widespread insurer insolvencies. It is also essential that any federal program include measures intended to promote freedom for markets to respond to these exposures, including meaningful limitations on the ability of participating states to control and/or suppress property insurance rates or to maintain other unnecessary restrictions. PCI is pleased to see that the bill includes an evaluation of federal and state regulatory issues as well.

Furthermore, PCI believes that insurers should also have the ability to establish voluntary, tax-deferred pre-event catastrophe reserves for purposes of funding all or part of their exposure to catastrophe risks. Policymakers should consider ways in which further development of the private catastrophe bond market can be encouraged by removing regulatory or accounting impediments to the use of such vehicles and by other steps which may foster development in this market and the commission is charged with looking at these issues.

“The commission bill, as currently drafted, includes a thorough examination of these issues that are very important to consumers, PCI and our property and casualty insurer members, and the nation, and we support legislation that will fairly evaluate these issues,” Holmes said.

PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write over $194 billion in annual premium, 40.1 percent of the nation’s property/casualty insurance. Member companies write 51.3 percent of the U.S. automobile insurance market, 39 percent of the homeowners market, 32.1 percent of the commercial property and liability market, and 38.7 percent of the private workers compensation market.

National Insurance Act - Why it Won't Work

A bill calling for optional federal charters for insurers would make consumer protection optional, according to the National Association of Professional Insurance Agents. The National Insurance Act of 2007, introduced this week in the House, would create a massive new federal insurance bureaucracy and then permit insurance companies to opt out of state consumer protection laws.

“This bill is bad for consumers, bad for the insurance business and bad for American taxpayers,” said PIA Executive Vice President & CEO Len Brevik. “It is being pushed by special interests that want to establish a duplicative federal insurance regulatory regime for their own benefit and weaken consumer protections in the process.”

The bill introduced on Wednesday July 25 by Rep. Ed Royce (R-Calif.) and Rep. Melissa Bean (D-Calif.) is companion legislation to S. 40, introduced by Senators Tim Johnson (D-S.D.) and John Sununu (R-N.H.) on May 24.

Last time anything like this was approved was in the mid 80s. It gave banks the option of choosing between both state or national chapter. When an option like this is open, it is impossible to try and predict what the market will go for, and because of this there can be negative reproductions. In the 80s, this is exactly what happened and Americans were left with a $150 billion bill.

State charters did not want to lose state money to the federal government, and they began to try and match what the federal charters were. This lead to a capitalistic mindset between state and federal governments over investment and banking. Standards were changed and the race to give the best price left banks with less coverage than they needed.

This is the same thing that would happen if the National Insurance Act passed. In business, whether it is on Wall Street or in Washington, no one wants to loose money or the chance to make money. State Insurance Companies and National Insurance companies would undercut each other until people were not fully covered.

This is a touchy subject, health insurance is one of those things that no one can quite put a finger on. Private companies have taken over something that should be available to all citizens and it is going to be a long road if government is going to try and regulate.

Life Insurance Purchasing Increases

Over the past year, life insurance has grown dramatically. Life settlement-backed securities have seen tremendous growth in the past 12 months. The life settlement market expanded in 2006 to approximately $12 billion. While this number is still a fraction of what some predict will be the size in 10 years, it still represents a significant increase over the prior year. The market for life settlements grows as financial institutions become involved in unprecedented ways via securities of life insurance policies or other new synthetic structures.

For the second year, Institutional Investor Journals and the Life Insurance Settlement Association (LISA) have published a special section on life settlements in the Summer 2007 issue of The Journal of Structured Finance.

"As the secondary market for life insurance draws greater interest from institutional investors and becomes more widely known among senior consumers, we see an increased need for authoritative information on this topic," stated Doug Head, Executive Director of LISA. "This special section of The Journal of Structured Finance is written by industry experts explaining the secondary market supply chain, product flow constraints, operational challenges of providers, minimizing portfolio risk of investors, market inefficiencies, and an analysis of the value to the consumer." LISA is the life settlement industry's largest trade association and regarded as "the voice of the industry."

Over the next ten years life insurance rates are expected to continue to grow do the the aging of a generation, the "baby-boomers" are settling into that well deserved vacation and with the nagging Social Security issues it seems only right to take out life insurance, in case sometihng does happen.