Thursday, February 7, 2013

The "Calm" Before The Storm?

 I just returned from Denver after a large gathering of stake holders in the health care business. Calm was not the best description but it will work for a topic of discussion at least. More information continues to surface  regarding the implementation of The Affordable Care Act. Five of the top insurance providers in the State of Colorado were there to provide updates and take questions regarding their progress in compliance with the ACA  It is VERY clear that storm clouds are building that are going to rain down on many people with individual/family health plans.

One of the areas of concern in the meeting was the size of rate increases that are expected in the individual/family health insurance market starting 01/01/2014. Speculation was that those plans could see a 20% increase in new business prices at the beginning of next year. One insurance carrier's response was "20% would be great". "Great" I believe was to try and make us feel good about 20%. It may be higher than that.  To compound that concern was the fact that I just received March renewals for some of my individual/family clients that will see their rates go up 27%. When you add that to the expected 20% for 01/01/2014 it begins to sound like REAL money. 

 What is going on here? For the past couple of years in the Grand Junction area, group insurance plans for the most part have seen very small if any rate increases at all. That's been some good news for sure. The individual/family market however has been priced well below the group market for some time. The reason is those individual/family policies were subject to full medical screening. The insurance company could make those rates more affordable since they were able to see your entire medical history and determine you or a family member were NOT about to blow a gasket and cost a pile of money to treat. Group insurance policies have not had that luxury for sometime. Enter the Affordable Care Act. Now ALL policies are guarantee issue. No medical screening what so ever. The only exception will be tobacco use (even higher rates). 

 Those folks that have  not been covered by an employer sponsored plan will see their rates climb to meet the rates of group insurance policies in the near future.

Get out your umbrellas...Premium showers are ahead.



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