Last Saturday morning the wrong newspaper was delivered to our home. The same carrier delivers three separate daily papers, and it seems the wrong one got tossed our way. Fortunately, the one we received also carries a “comics” section, so not all was lost!
The paper we received is much smaller than the one to which we subscribe, so in no time at all, I read my way to the “Letters to the Editor” section. There was a letter from a local reader regarding the coming increase in health insurance premiums and blaming the insurance coverage mandates of the new health insurance reform law passed under the Obama administration for it. The increase in the reader’s premium is to be 9 percent.
The letter struck a bell with me. I’ve worked as an agent in the insurance industry for almost nine years, selling personal and business lines as well as health and life insurance. Additionally I’ve worked as a consultant in the health care industry for over 30 years. Projects have included design of clinics, comparison of profit margins between freestanding and hospital based surgery centers, management of a Preferred Provider Network, and many others. I also served as a translator of health care materials into Spanish for the Kaiser Foundation Health Plan.
I’ve seen the development of the challenges we face today as they’ve developed over the past 30+ years. The increases in cost of health insurance the writer of the letter described are not new, nor are they the result of the efforts of Congress and the Obama administration to address the challenges we face.
In an unfortunate coincidence of timing this year, the rate increases for group health insurance policies are arriving in the mail just as voters are preparing to go to the polls for mid-term elections.
Let’s be clear about this. Rate increases occur every year. I’ve never seen a year in which health insurance cost less for the same policy. The increases this year are expected to be lower than the ones last year, according to the regional sales manager of one major health insurer. This manager holds regular meetings with agents to let us know what is coming before our clients get their renewal materials. Of course, the question is one of averages. On average the increases are lower. That doesn’t mean they are all lower, but some will be.
Most people with health insurance receive it through their jobs or the job of a spouse. These are group policies and have different benefits and limitations than individual policies do.
Group health insurance policies typically have an open enrollment period once each year. October is a popular month for such periods. At least one large health insurance company has all of its renewals of group policies set for October 1. On that date, types of policies offered change, as well as the benefits offered and the price of the policies.
Why do rates go up? Why do they go up for everyone, even for people who haven’t had any health issues in the previous year? Who pays for insurance? Why do companies drop some types of insurance policies and offer other types? Why do employees increasingly have to pay more of the cost of their insurance? What effect will the new regulations have on premiums and benefits? Would it just be better to dump the whole system and start over?
These are all questions worth asking. Their answers are all factors contributing to the challenges we face as a nation in dealing with the increasing cost of health insurance, health care, uncompensated care (the care of those who have no insurance) and the productivity toll that results from illness.
In future posts, I’ll address some of these issues, starting with the question of why rates go up every year, with or without changes in national policies.
To your health!
