Thebastidge: Re: Link-a-licious
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    Friday, July 16, 2010

    Re: Link-a-licious

    1 Comments:

    Blogger M said...

    RE: How's that healthcare working out?

    Reading this entry and the comments that follow is such a reminder of how people will make correlations and connections where there of often none. Working in the health insurance (note, NOT health care) industry most of the points made by the OP and the commenters are likely not related to recent health care legislation at all. One thing that is clear to those of us that work in the industry is that whatever you hear about it…it is largely conjecture. The truth is this model is so complicated that nobody really knows what will happen. Should we legislate when outcomes are this uncertain? That is another discussion altogether.

    "Yeah, I retired last year and started paying for my own healthcare immediately. This year my premium went from $260/month to $340/month. Welcome to the obumble's healthcare. "

    Retiree benefits get expensive quickly if you are using the benefit. Depending on the type of benefit (group retiree benefit Vs. Individual) the rating model and underwriting will be different. If it is an individual policy you are lucky to have qualified at all, where I work we have about a 5-10% success rate of even getting an insurance product (at all) for people of retirement age. Assuming that it is a group benefit, which seems more likely, the rates will be predetermined based on tiers of the participants ages. They can and will be changed yearly based on usage factors determined by the insurance regulator for the state. The rates have to be approved based on a rating model that allows for an estimated maximum profit by the company. This is the way that insurance is rated in most states and has been for a long time. It is likely that this commenter’s rates were increased because the pool of retirees that he belongs to are using the benefit to excess based on the rating model. Simple. Nothing to do with recent legislation here.

    “My plan jumped 15% this year. Hooray for free healthcare! (And if you believe it's free, I need to sell you a bridge in Arizona...)”

    There are so many possible reasons for this increase that there is no way to even begin, but assuming that it is related to recent legislation is not a good assumption. The book of business for the company that I work for is considered “very low risk” as we specialize in a few industries (based on SIC codes). Software and technology is the greater part of our business and even these “low risk” groups are seeing an average of 18%/year increase for the last decade. I would, again, liken this to usage. The carriers have a state mandated limit to the amount of profit they can seek so rate increases are going to be tied to people using the benefits more and more, and for more expensive procedures.

    One of the biggest insurance carriers in Oregon and Washington (state) recently confided that the recent Healthcare legislation would amount to a 8% increase in total premium. TOTAL premium. There are entire companies that it is likely to not effect at all. The groups that will see the increases are the ones whose usage out paces its premiums.

    The thing that the debate over healthcare is failing to address is that as long as we continue to grow more unhealthy, insurance will not be a sound institution. The reason rates are going up, is that healthcare is perceived as a right, and as technology and medical science advance, so too does America’s expectation that they deserve this new widget/procedure. At some point, we have to say that No, that is not covered because it is too expensive. Plans that disclude MRI and CAT scans are a GREAT idea for this reason.

    Bah….to much more to write…not sure why I even started this in the first place. This message never gets anywhere. People have already made up their minds on the topic. Vitriol wins out in a sensationalistic society.

    3:30 PM  

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