Health Insurance and RE

[Sandy]

I haven't posted in a while but I am still around. Lots going on. Anyway, I saw this today as a news release from ther Kaiser Family Foundation, and thought everyone might be interested in this latest development. Hopefully, this is a trend that will grow and is here to stay:

"The HR Policy Association, which represents 250 of the largest employers in the U.S., on Saturday announced the Retiree Health Access program, which is intended to provide affordable health coverage for former employees age 55 to 64, the New York Times reports. According to the Times, "layoffs, employee buyouts and sending jobs offshore" have contributed to a pool of approximately 800,000 early retirees who no longer are eligible for employer-sponsored health insurance, too young to apply for Medicare and unable to afford private insurance.

Under the Retiree Health Access program, no retiree could be turned down for coverage, regardless of prior medical conditions. Specifics of the plans will vary by employer, but a typical plan will have an annual deductible between $500 and $1,100 and a monthly premium between $400 and $1,200, depending on how much an employer chooses to contribute.

The policies will be administered by Aetna, which has agreed to participate because the employee pool created will be large enough to spread the risks and costs of insuring a demographic that is susceptible to major medical problems, the Times reports. Aetna will use "medical management" programs to advise and track the treatment of people with chronic conditions such as diabetes and heart failure, Aetna Executive Vice President Mark Bertolini said. The program will in "many cases cost relatively little for employers," according to the Times.

During the program's first year in 2008, no more than 20 HR Policy members are expected to participate, but other companies are expected to join in 2009, HR Policy President Jeffery McGuiness said. The group acknowledges that the program "can probably not help more than a small fraction of the 800,000 pre-Medicare retirees currently without insurance," the Times reports. However, Aetna CEO Ronald Williams said HR Policy hopes the program will "shape and influence" national discussions about health care reform (Freudenheim, New York Times, 6/23)."

[tomz]

There was a thread on this previously
Keeping Retirees Afloat

I, too, am interested in this. I wonder if they have community rating in addition to guaranteed issue. I don't work for a giant company so I doubt if they are part of the HR Policy Association.

Smart move by the insurance companies to try to proactively do something now before the elections. Most of the better known plans (Wyden, Obama, Edwards, Medicare for All, etc. ) are pushing for major changes in health insurance. If the insurance industry "fixes" the issue of private health insurance and underwriting for early retirees, there will be fewer folks in this demographic pushing for healthcare reform.

[gozzie]

If you remember 1993, the health insurance industry started holding the line on rate increases until Hilary's plan blew up and the coast was clear. The industry will try to make cosmetic changes to "cure" the coverage gap issues until the push for reform abates, which I think may happen again after people see the costs and sacrifices true reform will involve.

[mickeyd]

Seems like an interesting program since COBRA only covers a retiree for 18 months. I did not read all of the details, but what added expense would an employer have under this program? It is my understanding that employers want to spent as little as possible on ex-employees medical care.

[mykidslovedogs]

Quote:

Originally Posted by tomz There was a thread on this previously Keeping Retirees Afloat I, too, am interested in this. I wonder if they have community rating in addition to guaranteed issue.

Tom - Community rating is based on the average age of the group. If the group is entirely made up of retirees, I don't see how community rating is going to be advantageous.

[tomz]

Quote:

Originally Posted by mykidslovedogs Tom - Community rating is based on the average age of the group. If the group is entirely made up of retirees, I don't see how community rating is going to be advantageous.

As I understand it, guaranteed issue means you can get insurance without regard to prexisting conditions. My understanding of community rating is that everyone gets charged the same regardless of age or preexisting conditions. What I meant in my question was, will there be one price for everyone as opposed to a different price based on preexisting conditions or age. You understand the nuances of this since you work with it every day. I'm still trying to figure it all out. Will someone who is 60 with diabetes be charged the same as someone who is 60 and doesn't have diabetes? Under a community rating system, they would be. Right?

[Martha]

Yes. The problem could be an adverse selection problem. Those with health conditions buy into the plan, and the healthy go buy a different, cheaper plan on the individual market. Premiums for the group then become more and more expensive.

[teejayevans]

Quote:

Originally Posted by mickeyd Seems like an interesting program since COBRA only covers a retiree for 18 months. I did not read all of the details, but what added expense would an employer have under this program? It is my understanding that employers want to spent as little as possible on ex-employees medical care.

Less than zero.
Like Cobra, you would pay 102% of the companies cost, the 2% would
cover admin fees, you would be part of a big group, the companies would
benefit because instead of negotiating for 100K employees, together they
have 100 million, I'm guessing they would actually benefit by have lower
rates on their regular employees, and since they have a big bucket of
healthy employees, these cost wouldn't be too bad, like Cobra today,
a younger healthy individual could do better outside the group. If they
adjusted the rates based on age/health for non employees, then maybe
it would be better for all.
TJ

[mykidslovedogs]

Quote:

Originally Posted by tomz As I understand it, guaranteed issue means you can get insurance without regard to prexisting conditions. My understanding of community rating is that everyone gets charged the same regardless of age or preexisting conditions. What I meant in my question was, will there be one price for everyone as opposed to a different price based on preexisting conditions or age. You understand the nuances of this since you work with it every day. I'm still trying to figure it all out. Will someone who is 60 with diabetes be charged the same as someone who is 60 and doesn't have diabetes? Under a community rating system, they would be. Right?

Well, typically, guaranteed issue group plans are age-banded, so two 60 year olds with different medical conditions should both get the same rate, even if a plan is not community rated. Community rating is different, because it is the same rate for everyone, regardless of age, but since the pool will likely mostly be made up of retirees, it wouldn't really help to have community rating (ie...the rate for a 55 year old isn't much different than the rate for a 60 year old.) Community rating works better when the group has a wide range of ages (both very young and very old).