[quote=bearishgurl]
Well, air_ogi, how else do you explain this huge YoY increase?? I started with this plan in 2004 and it has NEVER increased this much YoY. The “form letter” I was sent in August implementing the 10/1/10 increase stated that they were complying with the new HCRA. It gave me the “option” of giving up my plan for a lesser plan ($10,000 co-insurance for hospitalization) for the same premium I had but I would lose my “grandfathered” benefits and my *newly chosen* plan would be subject to be “reworked” to comply with their new requirements under HCRA.
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If you haven’t had these sorts of YOY increases in the past you’re unique. I don’t even consider it huge. My premiums increased 311% over the last 9 years (for a policy year beginning 7/1/10). Three times over that period, premiums increased by more than 25% in a single year. My experience was only slightly higher than most because of my particular employee census. That you’ve never had those kinds of increases is almost shocking. Twenty percent a year has been pretty typical and any argument, on the part of the insurance companies is disengenuous at best, and outright lie at worst. The only significant part of the new law that will affect this policy year is insurance companies inability to cancel coverage, and mandatory of allowance of children up to age 26 (though there are certain extensions on the applicability of that part of the law.) And that’s a part of the law that insurance companies LOVE. There are no better customers than 22-26 year olds, they don’t get sick and they don’t go to the doctor.
The reason for the increase this year is the same as it has been over the last 15 years. To increase profits. Certainly the possiblity exists that increases were accelerated in anticipation of some price controls under the new law which won’t take effect for a few years.
United Health just came out with their earnings. Beat the street by a huge margin. Came in with an 80.9 loss ratio, which they brag about. At the same time, complaining that the new law requires at least an 80% loss ratio. (And their 80.9% was on ALL policies, the will be allowed as low as a 75% loss ratio on individual policies.)
Insurance companies make money when they can. I don’t suspect the new law will do much more than slightly slow the increases in premiums. And the insurance companies won’t make less under the new law, they’ll make more. Afterall, they wrote the law.(Who do you think insisted on mandatory coverage? That was not an idea borne in the halls of congress.) But we certainly weren’t promised any declines in premiums, before the law even takes effect. Anyone that was expecting that wasn’t paying attention.
(As an afterthought….did you move into a new age bracket? Comanies have different brackets, but if your age now ends in a 5, a 6, 0, or a 1, that may explain the increase. Particularly moving from the late 30’s through the early 60’s, the increases are stunning.)
[quote=bearishgurl]Unfortunately, the loss of full-time jobs will continue to be the fallout from the HCRA. I see many firms with just over 50 employees begin to pare down their workforces to <49 employees before 2014 to avoid being mandated to offer health coverage.[/quote]
That makes no sense. Why would any company intentionally shrink now, because of costs that may rise 3 years from now? I'm not disputing that you're seeing it, but I'm in contact with a few dozen businesses every month in that same size range, and not a single one has moved in that direction. Some of those currently under 50 employees are ecstatic with the new tax credits that will help them pay their employees insurance, beginning this year.
I'm not, by the way, in favor of that mandate. I think it's a huge mistake to link health care with employment, and this law strengthens that link. Insurance companies love it. De-linking is a part of the long term solution. With the undue influence of the insurance industry (and in a broader sense, the entire finance industry, of which insurance is a part) on both parties in congress, the likelihood of that happening any time soon is slight.
