Health insurance rate increase

[DallasGuy]

Originally Posted by SC

Switching isn't an option because other carriers won't cover some (very minor) pre-existing conditions. For example, my wife saw a chiropractor for a few months to help with a sore back, and that caused two carriers to permanently exclude coverage for anything related to her spine and related areas. The third carrier merely excluded coverage for five years, so we went with them.

I never thought the minor (and in my mind, fairly typical) health issues we've had in the past would be considered "pre-existing conditions" and cause us problems in obtaining coverage, but here we are.

It sort of makes a person think twice about going to the doctor for anything because it may result in a new pre-existing condition. Pretty sad. The health insurance system in the US is in need of an overhaul.

I had a bleeding ulcer back in 1994....a one time occurrance. No insurance company will cover me for that type of ailment, even 14 years later.

[rogersteciak]

Originally Posted by REWahoo

Yikes! Your experience reinforces what probably lies in store for us.

Here are some numbers. In 1996, I took out a medical and dental plan for $400 a quarter, or $1600 a year (I signed up for the maximum deductibles possible). By 2004, the premium had increased to $2225 a quarter, or $8900 a year. I never used the medical, but did use the dental. The two types of coverage were separate line items on the bill, but the total increased five-fold over an 8 year period (the CAGR is around 24%). The insurance was obtained through a company that was contracting with the National Association for the Self-Employed (nase.org).

Then in 2004, I got a medical-only high-deductible plan for $158 a month, or $1900 a year (maximum deductibles possible). During 2006, the premium went from $190 a month at the beginning of the year to $246 a month at mid year to $316 a month by year end. Earlier this month, I received notice the premium would go from $341 a month to the new value of $421 a month (effective in July), or $5,050 a year. I've never filed a claim on this policy, but there was a 2.5x increase over a four year period (the CAGR is around 27%). The insurance company is Blue Shield of California.

Only one of these increases since 2004 was to due to age bracket change. The rest were due to higher costs for the insurance company. I wonder how one could hedge against these increases. One approach might be to buy a basket of health care stocks (theoretically, at least, it's worth looking into), but requiring a CAGR in excess of 25% is a high hurdle rate to overcome (Warren Buffet's track record over the past 40 years is a CAGR of 24%).

[Alan]

All these stories are scary. Like W2R I am hanging onto my current job for 20 months to get the retiree medical benefits, but I work for a Megacorp who is currently being bought by another Megacorp and retiree benefits are a big concern for everyone so I may be still be disappointed and have to do my own thing.

I am already at the stage of being afraid to go to the docs for things like back ailments in case that screws me for life should I have to go it alone. I had back surgery 18 years ago and even though I have never been to the docs with back problems since then I expect that will rule me out of coverage for spinal problems should I need to find my own coverage.

[Want2retire]

Originally Posted by Alan

All these stories are scary. Like W2R I am hanging onto my current job for 20 months to get the retiree medical benefits, but I work for a Megacorp who is currently being bought by another Megacorp and retiree benefits are a big concern for everyone so I may be still be disappointed and have to do my own thing.

I am already at the stage of being afraid to go to the docs for things like back ailments in case that screws me for life should I have to go it alone. I had back surgery 18 years ago and even though I have never been to the docs with back problems since then I expect that will rule me out of coverage for spinal problems should I need to find my own coverage.

The idea of working for 20 months to get medical benefits and then not getting them would make me really, really furious! I hope that doesn't happen to you. I am already trying not to be resentful that I have to work that long for medical when, a few years ago, early retirees could just get private insurance for a reasonable price and didn't have to wait. It seems like health care in the U.S. is in limbo and unpredictable at this time.

Not going to the doctor for fear of getting screwed out of future coverage isn't healthy, though. Yet the whole point of coverage is to keep you healthy. You're stuck between a rock and a hard place, as they say.

[Alan]

Originally Posted by Want2retire

The idea of working for 20 months to get medical benefits and then not getting them would make me really, really furious! I hope that doesn't happen to you. I am already trying not to be resentful that I have to work that long for medical when, a few years ago, early retirees could just get private insurance for a reasonable price and didn't have to wait. It seems like health care in the U.S. is in limbo and unpredictable at this time.

Not going to the doctor for fear of getting screwed out of future coverage isn't healthy, though. Yet the whole point of coverage is to keep you healthy. You're stuck between a rock and a hard place, as they say.

It's not just the health benefits that we are concerned about, there is a very good chance that the pension benefits will be seriously messed with. We are the only business in the existing Megacorp where early retirement can be taken at 55 (if you have at least 25 years service at 55) - the rest of the businesses it is 60. It is expected that the new Megacorp will, at minimum, change our business to be in line with the rest. So far the SEC has delayed the buyout by 6 months over monopolies concerns and I'm hoping it will be delayed more while new Megacorp sells some of its sites before it is allowed to conclude the deal.

I'm leaving at 55 regardless. If an ER pension is not available and no health insurance then it will cost me approx. $500k in lost pension income plus whatever extra I'll have to pay in health insurance over the years. So, yes, I'll be really ticked for a while, but that's life and I'm not going to bear any grudges, I have been extremely blessed and fortunate so far in life.

[Want2retire]

Alan, I guess that's the only thing you can do and still maintain sanity! If I were in your position, I don't know if I'd be as strong. Good luck and let's hope that you get out of there at 55 before any major downgrades of your retirement/health benefits package.

[Alan]

Originally Posted by Want2retire

Alan, I guess that's the only thing you can do and still maintain sanity! If I were in your position, I don't know if I'd be as strong. Good luck and let's hope that you get out of there at 55 before any major downgrades of your retirement/health benefits package.

I'll keep you up to date on developments. Keep your nose to the grindstone - only 18 months for you

[Want2retire]

Originally Posted by Alan

I'll keep you up to date on developments. Keep your nose to the grindstone - only 18 months for you

So far, so good! One day at a time, 519 to go. Just about 17 months, 3 days.