News in brief - March 5, 2001

Georgia fines Humana $1 million - Cigna warns of slowing economy - Consumer drug ad spending up - Some firms cover full premium - Three-tier drug co-pays reign - Chiropractors fault managed care

Georgia fines Humana $1 million

In its costliest fine against an insurer, Georgia has ordered Humana Inc. to refund $1 million to more than 4,500 Georgia policyholders in the company's small-employer plans.

Humana overcharged them by improperly calculating premiums based on the health status of employees rather than on actual medical costs incurred, Insurance Commissioner John W. Oxendine said.

Cigna warns of slowing economy

Cigna Corp. said its fourth-quarter profit fell 5% and cautioned that a slowing economy could harm health plans' bottom lines if employers follow through with threats to drop coverage.

The company said it was "just cautioning analysts who had strayed above the high end of projections," but the warning led to at least temporary drops in stock prices for Cigna, Wellpoint Health Networks, United HealthGroup and Humana Inc.

Consumer drug ad spending up

Drugmakers spent $1.9 billion on direct-to-consumer advertising of prescription drugs from January to September 2000 -- the same amount spent in all of 1999, according to Scott-Levin, a pharmaceutical consulting firm in Newtown, Pa.

In 2000, 29% of employers paid all the health insurance premium for individuals and 12% paid it for family coverage as well -- about the same percentages as 1999, said a survey by the Institute of Management and Administration in New York.

Most employers still offer a choice between at least two health care options. The most prevalent combination is the PPO-HMO option, offered by 20% of employers.

Three-tier drug co-pays reign

About 40% of HMO enrollees now pay three-tier graduated co-payments for generic, on-formulary brands and off-formulary brands, according to Health Industries Research Companies in Santa Cruz, Calif.

HIRC predicts the percentage could soon reach 60% and average co-pays could approach $10/$25/$40 for the three tiers.

Chiropractors fault managed care

In a survey by the American Chiropractic Assn., 59% of chiropractors said managed care has cut the number of patient contacts and 41% said it has cut quality of care.