Anthem huge rate hike

[free4now]

My Anthem individual health insurance just rose 33%. According to this article, my hike was less than average.

Anthem Blue Cross raises premiums

 

[dgoldenz]

I posted before about Maine telling Anthem to shove it when they asked for a rate increase in that state. Maine determined that since Anthem was making so much money in other states, they didn't need to make a profit in Maine anymore. Guess who gets to subsidize those profits in other states? You.

On that note, Anthem is still the lowest priced carrier even after the rate increase for most demographics in California....but the news doesn't tell you that.

 

[tryan]

free4now - when was the last increase?

We're Anthem in NH ... rates have been increasing 10-12% per year.

 

[Notmuchlonger]

Seems to me there is basically nothing protecting the individual health care consumer. Eventually this ride is going to end.

 

[shotgunner]

I have wondered if large increases to health insurance and possibly a rapid increase in doctor and hospital charges this year were a response to the ongoing legislative attempts in '09. Is this an industry response i.e. get while they can before a possible change limits future profits?

 

[Martha]

I posted this in another thread, but what I read is that the Anthem rate hikes may be in large part due to adverse selection. A number of healthy people have dropped their individual insurance during this recession. The unhealthy people are less likely to take that risk. A couple of links that discuss the issue: Sticker Shock | The New Republic Center for Business and Public Policy » Blog Archive » Adverse Selection — California Style

 

[ziggy29]

I posted this in another thread, but what I read is that the Anthem rate hikes may be in large part due to adverse selection. A number of healthy people have dropped their individual insurance during this recession. The unhealthy people are less likely to take that risk. A couple of links that discuss the issue: Sticker Shock | The New Republic Center for Business and Public Policy » Blog Archive » Adverse Selection — California Style

That would make some sense. Many Megacorp group plans are also going up by double digits, but because they (a) tend to be highly subsidized and (b) are used by people who are employed (or in some cases retired), you won't see as many healthy people dropping out of them. And their rate increases are (overall) much less than I'm hearing from individual plans.

More evidence of a broken system, methinks.

 

[TromboneAl]

My Anthem individual health insurance just rose 33%.

It's in part because you turn 40 this year, right? DW's also went up by a similar amount (she turns 55):

http://www.early-retirement.org/forums/f38/health-insurance-premium-from-286-to-386-a-48458.html

 

[dgoldenz]

That would make some sense. Many Megacorp group plans are also going up by double digits, but because they (a) tend to be highly subsidized and (b) are used by people who are employed (or in some cases retired), you won't see as many healthy people dropping out of them. And their rate increases are (overall) much less than I'm hearing from individual plans.

More evidence of a broken system, methinks.

Individual policies are usually a fraction of the price of group policies, most people just don't know it.

 

[ziggy29]

Individual policies are usually a fraction of the price of group policies, most people just don't know it.

Yes, IF you are healthy AND you are relatively young AND your employer (or former employer for those lucky few who have employer-subsidized retiree health insurance) isn't paying for most of your group benefit.

The bottom line is that most of us would not be well-served to opt out of our employer-subsidized group plans and into our own individual plan. And that's one of the facts that grossly distorts and fractures the individual health insurance market, making it much more dysfunctional than it would probably be if there was no link between health insurance and employment.

 

[dgoldenz]

Yes, IF you are healthy AND you are relatively young AND your employer (or former employer for those lucky few who have employer-subsidized retiree health insurance) isn't paying for most of your group benefit.

The bottom line is that most of us would not be well-served to opt out of our employer-subsidized group plans and into our own individual plan. And that's one of the facts that grossly distorts and fractures the individual health insurance market, making it much more dysfunctional than it would probably be if there was no link between health insurance and employment.

I understand that, but that doesn't mean there's any less money going to the insurance company under a group plan. Having insurance tied to employment is probably one of the worst ideas anyone ever came up with. Why isn't life insurance, long term care, car insurance, homeowners insurance, etc tied to employment with the employer subsidizing cost too? Makes no sense.

 

[ziggy29]

I understand that, but that doesn't mean there's any less money going to the insurance company under a group plan. Having insurance tied to employment is probably one of the worst ideas anyone ever came up with. Why isn't life insurance, long term care, car insurance, homeowners insurance, etc tied to employment with the employer subsidizing cost too? Makes no sense.

I agree, but it is what it is, and when you offset the cost of my share of the premiums with the $1000 annual contribution my employer puts in my HSA, the "cost" of the insurance itself comes to about $15 per month for both my wife and me.

I'm not going to turn it down just because I think the employer-based health insurance model is stupid and possibly a significant part of the cost containment problem. It's not like my employer is going to pay me an extra $650 a month to decline coverage or put the $1000 HSA match into my 401K instead.

 

[dgoldenz]

I agree, but it is what it is, and when you offset the cost of my share of the premiums with the $1000 annual contribution my employer puts in my HSA, the "cost" of the insurance itself comes to about $15 per month for both my wife and me.

I'm not going to turn it down just because I think the employer-based health insurance model is stupid and possibly a significant part of the cost containment problem. It's not like my employer is going to pay me an extra $650 a month to decline coverage or put the $1000 HSA match into my 401K instead.

And that's exactly the problem. Everyone complains about how expensive health insurance is, yet nobody wants to give up their gold-plated benefit plan that they pay little to nothing for (at least in comparison to the total cost), which results in the highest amount of claims, and further drives up premium increases.

 

[ziggy29]

And that's exactly the problem. Everyone complains about how expensive health insurance is, yet nobody wants to give up their gold-plated benefit plan that they pay little to nothing for (at least in comparison to the total cost), which results in the highest amount of claims, and further drives up premium increases.

Tragedy of the commons.

 

[REWahoo]

After an audit of the numbers behind their proposed huge California rate increase:

Oops: Health insurer nixes big premium hike, cites bad math

LOS ANGELES (AP) — Insurance giant Anthem Blue Cross withdrew plans to raise health insurance rates for Californians by as much as 39% after an independent audit determined the company's justification for raising premiums was based on flawed data, state Insurance Commissioner Steve Poizner said Thursday.

Anthem said separately it will file a new application for a rate increase with the California Department of Insurance and the Department of Managed Health Care, perhaps as early as next month. It added that any errors in its original application were inadvertent.

Anyone care to wager the new increase will be "only" 15%? Desensitized the same way we were when gas went down from $4+ per gallon...

 

[free4now]

Bad math, yeah right. That's what bugs me so much about the insurance companies is they never admit when they are wrong. I had a half dozen or so incidences where my insurance company granted my grievances, but every time they explained it as "we didn't make any mistake but as a one time accomodation we're paying what you say we owe".

 

[wildcat]

I posted this in another thread, but what I read is that the Anthem rate hikes may be in large part due to adverse selection. A number of healthy people have dropped their individual insurance during this recession. The unhealthy people are less likely to take that risk. A couple of links that discuss the issue: Sticker Shock | The New Republic Center for Business and Public Policy » Blog Archive » Adverse Selection — California Style

Martha is correct. Anthem individual markets lost money last year in the CA markets due the recession as pointed out (CA was really whacked). The price increases we are seeing now are an attempt to reflect what the pool is now, not what it was in good times. Govt already monitors the health insurance industry very closely so to me it's hard to imagine a company making high margins on policies.

This part I understand and accept b/c that is how insurance works. The part I don't understand and don't accept is corporate waste which is a factor in pricing policies. Just about any big company has a lot of waste, unfortunately in this case the waste is really felt by many people.

 

[chinaco]

After an audit of the numbers behind their proposed huge California rate increase:

Oops: Health insurer nixes big premium hike, cites bad math

Anyone care to wager the new increase will be "only" 15%? Desensitized the same way we were when gas went down from $4+ per gallon...

Yes those actuaries are often poor at math. That is why the insurance companies retain legions of them.


If the increase would have been accepted do you think the insurance company would have later refunded the money when they discovered their "Error"?

 

[dgoldenz]

By "inadvertent calculation mistakes" they really mean "bowing to political and public pressure." Anthem's rates increased in Virginia 25-35% across the board last year. Why is there no media outrage over here? Gimme a break...

 

[chinaco]

By "inadvertent calculation mistakes" they really mean "bowing to political and public pressure." Anthem's rates increased in Virginia 25-35% across the board last year. Why is there no media outrage over here? Gimme a break...

You said the reason in your post... Political pressure! In the case of VA, the lack of it.

You might ask your governor whey there was no pressure on the Insurance Companies?

 

[Red Rover]

I got the notice of the big rate increase too. What was so strange about it was that just a couple of months earlier Anthem had actually reduced my rates. I'm not sure what the new increase will be but I'm sure there will be one and it will be more than I want it to be.

 

[ziggy29]

I got the notice of the big rate increase too. What was so strange about it was that just a couple of months earlier Anthem had actually reduced my rates. I'm not sure what the new increase will be but I'm sure there will be one and it will be more than I want it to be.

IMO, they might be throwing a tantrum over the recently passed legislation. They may be hoping to convince people that it proves the new reforms are a bad idea, but it could backfire and just move more people into the camp seeking the public option.

Then again, maybe the law really was that screwed up, at least between now and 2014.