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Old 10-26-2010, 10:33 AM   #21
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I think your agent may have his tin foil hat on. The claims variation in the small group and individual market is much higher than the large group market. The larger the group, the greater the spreading of risk. The smaller the group, the greater the chance a few claims can have a massive impact on the overall group loss ratio for the year. A group of 5 people with one person having $1 million in cancer treatments will be a big loss for the insurance company. A group of 50,000 people with one person having $1 million in claims won't even make a dent in the loss ratio. Unless you're looking at the 60+ age range, individual market premiums are almost always lower than group.
I get that. The risk of any individual small group of 10 is quite high. Therefore, each group is priced to that high risk.

The risk profile of insuring one million people is similar as one group, one thousand groups or one million groups. Insurance companies can define the groups any way they want to, and then price accordingly. The fact that the large insurers have all chosen the same method with the same pricing structure point to collusion. The fact that there are such large differences between big group and small group policies point to oligopolistic practices. I don't think there is any tin foil here, just insurance companies acting freely in a poorly regulated area.
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Old 10-26-2010, 11:29 AM   #22
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I get that. The risk of any individual small group of 10 is quite high. Therefore, each group is priced to that high risk.

The risk profile of insuring one million people is similar as one group, one thousand groups or one million groups. Insurance companies can define the groups any way they want to, and then price accordingly. The fact that the large insurers have all chosen the same method with the same pricing structure point to collusion. The fact that there are such large differences between big group and small group policies point to oligopolistic practices. I don't think there is any tin foil here, just insurance companies acting freely in a poorly regulated area.
If we got rid of group insurance altogether would be a step in the right direction...fat chance though.
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Old 10-26-2010, 11:32 AM   #23
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Never had a problem with Anthem on the claims side....but your rates for group coverage have nothing to do with rate increases in the individual market.
my understanding is that under the new healthcare reform bill, everyone should have the advantage of accessing insurance at group rates...of course that's if it's not repealed.

I'm wondering whether the reduced premium had something to do with Anthem getting the account. I think we're 80k employees.
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Old 10-26-2010, 11:37 AM   #24
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my understanding is that under the new healthcare reform bill, everyone should have the advantage of accessing insurance at group rates...of course that's if it's not repealed.

I'm wondering whether the reduced premium had something to do with Anthem getting the account. I think we're 80k employees.
Large groups like that are usually negotiated instead of having prices set already. Everyone will have the advantage of accessing insurance at group rates, but that doesn't mean everyone can afford it. Group rates are very expensive compared to individual in most states outside the 60-64 age bracket. Most of my clients would drop their coverage altogether if they had to pay $1000+/month for a family plan. They struggle paying $400-500/month as it is.
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Old 10-26-2010, 11:48 AM   #25
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If we got rid of group insurance altogether would be a step in the right direction...fat chance though.
You mean just one large risk pool? That would make everything a lot simpler. I think that's one of the reforms we're trying to pass, although it seems we're going about it the same way a drunk walks home from the bar - staggering every which way with sudden lurches left and right. We also may end up like the drunk ... in a ditch somewhere.
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Old 10-26-2010, 11:54 AM   #26
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You mean just one large risk pool? That would make everything a lot simpler.
On the contrary; I think he's suggesting we should ditch "group insurance" and all shop around for individual policies. Which is great if you're young and healthy, and not so great otherwise. And those who are young and healthy today will not always be young and may not always be healthy.
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Old 10-26-2010, 11:54 AM   #27
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You mean just one large risk pool? That would make everything a lot simpler. I think that's one of the reforms we're trying to pass, although it seems we're going about it the same way a drunk walks home from the bar - staggering every which way with sudden lurches left and right. We also may end up like the drunk ... in a ditch somewhere.
Basically, yes, but the individual market would be the "one large group." If it were only the individual market with full underwriting and allowing for a national high risk pool would make things a lot simpler. Employers could contribute to some type of health account similar to an HSA to allow employees to buy whatever coverage they wanted and set aside the rest for healthcare. There could be a tax-free exemption level on contributions with the rest taxable. The extra taxes collected would probably be enough to cover the subsidization of a high risk pool for the uninsurable. Anything left over at retirement age could be pulled out of the account or used to pay Medicare premiums. Would work pretty well, but that's just my opinion.

See how I wrote that in one paragraph? Didn't even take me 2700 pages.
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Old 11-03-2010, 06:36 PM   #28
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Just received my annual premium notice and it was up only $4/mo. Same as last year. I thought for sure it would go out the roof with all the changes that have been made, such as unlimited lifetime benefits.

Glad I can still afford my daily med's.
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Old 11-04-2010, 07:53 AM   #29
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Just received my annual premium notice and it was up only $4/mo. Same as last year. I thought for sure it would go out the roof with all the changes that have been made, such as unlimited lifetime benefits.

Glad I can still afford my daily med's.
Good. Here's to hoping you are the first of many!
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Old 11-04-2010, 08:51 AM   #30
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Just found out our share of our Megacorp premium will go from $97 to $146 a month next year. Hardly an amount to complain about compared to many here, but still represents a 50% increase in the employee-paid portion from this year. I think it's mostly because Megacorp is passing most of the increase on to us and not absorbing the same percentage of premium increase as in years past. (Our plan was barely changed by the reform legislation earlier this year.)

That's for the HDHP/HSA option which comes with some HSA employer contribution. The traditional PPO option is going to be over $410 a month for employee plus spouse and about $590 for full family.
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Old 11-10-2010, 06:45 PM   #31
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Just got a notice of premium increase from BC/BS for my $5,000 deductible individual policy. This is my last year on the "open market" before becoming medicare eligible.

I've had the policy for 5 years and it has increased each year: 8%, 7%, 9%, 15%, and this year 28%. Thank goodness Congress passed that health care reform bill. No telling what my increase would have been without it.
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Old 11-11-2010, 12:08 PM   #32
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Just got a notice of premium increase from BC/BS for my $5,000 deductible individual policy. This is my last year on the "open market" before becoming medicare eligible.

I've had the policy for 5 years and it has increased each year: 8%, 7%, 9%, 15%, and this year 28%. Thank goodness Congress passed that health care reform bill. No telling what my increase would have been without it.
Ouch. Notice the trend line there. Hopefully Medicare will still be there for you.
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Old 11-11-2010, 05:45 PM   #33
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Just got a notice of premium increase from BC/BS for my $5,000 deductible individual policy. This is my last year on the "open market" before becoming medicare eligible.

I've had the policy for 5 years and it has increased each year: 8%, 7%, 9%, 15%, and this year 28%. Thank goodness Congress passed that health care reform bill. No telling what my increase would have been without it.
I've also had my policy for 5 years and have averaged a 5% annual increase. Higher the first couple of years, but almost nothing the last 2 years. Of course I'm a young buck who takes his daily med's like a good boy.
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Old 11-16-2010, 07:45 AM   #34
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Lets see. My premium in 2007 $900.89. For the same policy, my premium in 2010 $1933.45.

So, what else is new?
Just got my 2011 increase notice. Another 17.6% to $2274.77. Now in 4 years it is 2.5 times higher.

I can think of many witty and sarcastic comments but I think I'll just go walk the dog instead. That always helps.
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Old 11-16-2010, 07:49 AM   #35
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Just got my 2011 increase notice. Another 17.6% to $2274.77. Now in 4 years it is 2.5 times higher.

I can think of many witty and sarcastic comments but I think I'll just go walk the dog instead. That always helps.
Yikes...of course, if someone had bothered to add to the PPACA bill that you could move from plan to plan within the same company and keep your original risk class (keeping same deductible or higher), you'd probably be paying a lot less. But that would make sense! We can't have that.

One of my clients is paying $3k/month right now, if they could just move to a different plan from the new generation of them and keep the same risk class they could save $15,000/year.
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Old 11-16-2010, 09:03 AM   #36
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I think your agent may have his tin foil hat on. The claims variation in the small group and individual market is much higher than the large group market. The larger the group, the greater the spreading of risk. The smaller the group, the greater the chance a few claims can have a massive impact on the overall group loss ratio for the year. A group of 5 people with one person having $1 million in cancer treatments will be a big loss for the insurance company. A group of 50,000 people with one person having $1 million in claims won't even make a dent in the loss ratio. Unless you're looking at the 60+ age range, individual market premiums are almost always lower than group.
Why don't insurance companies create a group call "INDIVIDUAL" and problem is solved. To me, this logic of spreading the risk does not make sense.

By the way, this new group "INDIVIDUAL" will be created when the health exchange program took place in 2014 (if nothing changes).
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Old 11-16-2010, 09:21 AM   #37
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Why don't insurance companies create a group call "INDIVIDUAL" and problem is solved. To me, this logic of spreading the risk does not make sense.

By the way, this new group "INDIVIDUAL" will be created when the health exchange program took place in 2014 (if nothing changes).
Because nobody would pay the rates for this group....how many families do you know that can fork out $1500/month for health insurance?
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Old 11-16-2010, 10:52 AM   #38
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Because nobody would pay the rates for this group....how many families do you know that can fork out $1500/month for health insurance?
Ones with more than $1500/month in HC costs would sign up. Oooops, that 'solution' creates another problem, doesn't it?


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Old 11-16-2010, 12:19 PM   #39
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Ones with more than $1500/month in HC costs would sign up. Oooops, that 'solution' creates another problem, doesn't it?


-ERD50
I don't know why anyone would pay those outrageous rates when they can get free care at the ER.

Stay tuned for another episode of "When Good Intentions Go Bad"...


But seriously, rates are high, medical costs are high, and both are going higher. It's sort of built into the system. I fully expect my insurance costs for DW and I to cross $35,000 a year by the time we hit 65, and what happens past that point is anyone's guess.
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Old 11-16-2010, 01:12 PM   #40
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Just received my annual premium notice and it was up only $4/mo. Same as last year. I thought for sure it would go out the roof with all the changes that have been made, such as unlimited lifetime benefits.

Glad I can still afford my daily med's.
My employer subsidized retiree coverage went up only $4 as well. But they did raise the deductible and max out of pocket a bit too. Generally, I'm happy it wasn't much worse.

They did point out in the cover letter that retiree plans ARE NOT covered by the changes mandated in the recent healthcare legislation. I didn't know that.
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