Today was the meeting for the larger company. The size of our group is 17 people. Some people have single coverage, some have family coverage. Some opt for a PPO plan and some participate in a Health Savings Account Plan (HSA).
Several years ago, when HSA's were first invented, the health insurers priced those plans lower because they thought that their insureds would be more discriminating consumers and would spend less (since you essentially self insure until you meet your deductible).
This year, for the first time, the cost of the HSA premiums rose more than the premiums for the PPO. Apparently the actuaries have determined that people in HSA's aren't spending less, and once they hit their deductibles, the coverage is 100%.
So, welcome to today's meeting. Here's what we learned.
If we want to keep the coverage we've got (i.e., the same coverage as last year), the premiums are increasing 28.2%. Remember the President's line about health care reform--"if you like the coverage you've got, you can keep it?" Well, you can, if you want to pay 28.2% more this year.
It wouldn't be "renewal time" without the annual "other options" that the insurers always provide to us. It's always the same. They tweak the deductibles and "out of pocket" expenses, in at least one or two other "lower-priced options"--lower priced in terms of monthly premiums only. And when I say "lower-priced" please know that one is an increase of 4.3% in annual premiums, and the other is an increase of 11.5%. However, the true shell game is played with the increased deductibles, co-pays, etc.
By the way, in this shell game, "out of pocket" expenses are not to be confused with "co-pays"--which although they are indeed paid out of your pocket in the literal sense, they are not, in the insurance company's contractual mind, counted toward your deductible. In other words, "out of pocket" means one thing to the patient and something quite different to the insurance company.
Of course, the actuaries are the only ones who know the exact claims paid experience of our group. That information is right at their fingertips when they give us their annual quotes. They know how much our group paid for prescription drugs, surgeries, and emergency room visits, and how often we used doctors in the network or out of the network, etc.
On the other hand, those of us who have to choose the best coverage option for our ourselves and our employees don't have access to any of that information because it is all "confidential." So, for example, we don't know how many people in our group were very close to reaching their deductibles last year and might actually benefit from a plan with the lower deductibles (in the total amount they pay annually for their health care), even if it costs more in monthly premiums.
I'm convinced that today's premium increase of 28.2% was specifically designed to try to drive our decision so that we will not keep the same coverage as we had last year and will instead choose one of the other plans with higher deductibles, which appear--at first blush-- to be a better deal. But, I'm equally as convinced that the insurance companies' actuaries know exactly what the score is, and that no matter which option we choose, they will end up with more money in the insurance company's pocket at the end of the year.
Because they can. They will.
There is no competition. There is no anti-trust regulation of insurance companies. Why?
This system only exists because we allow it.
If you like the insurance coverage you have, it's probably because you don't understand it.
The cops break up shell games of "3-Card Monty" on the street.
However, all across America (and no where else in the world) in Board Rooms and in offices, large and small, we welcome these shell games into our workplace every day.
Because we let them.
When are we going to stop letting them?
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