ANOTHER 30%+ increase in our insurance rates

[clacy]

My small business, which covers roughly 25 employees and their families just received our rates, which renew in July......

+32% increase

Last year it was +33%

Obamacare doesn't seem to be helping

[MediumTex]

The real question is how much of this cost increase will you pass on to your employees?

[Xan]

The real question is how much of this cost increase will you pass on to your employees?

I would imagine ultimately all of it, of course, in one form or another.  Perhaps most likely by letting some of them go.  Those folks could easily end up being entirely dependent on government (which I have to believe is a goal of the left), while the economy contracts as a result.  A win for everyone!

This is quite a fascinating article about what's going to happen to the health insurance market:
http://www.forbes.com/sites/theapotheca ... by-64-146/

[Pointedstick]

It's a rotten situation to be in. Your options are all bad:

1. Eat the cost. Your profit margin decreases, hurting your business, and ultimately, your family, employees, and customers.
2. Pass on the cost to the employees. This reduces their effective take-home pay, hurting them and their families.
3. Pass on the cost to the employees but give them a raise to offset it. See #1.

[clacy]

The real question is how much of this cost increase will you pass on to your employees?

We will pass about half of that to our employees.  I think it was roughly the same pass along cost last year. 

[moda0306]

How much of these cost increases are Obamacare?

Obamacare is mostly a regulatory framework for the individual market, and not nearly as much in the group market, is it not?  I haven't dug into this stuff in a long time... forgive my ignorance.

[clacy]

We currently only provide insurance for our salaried managers, which is in the neighborhood of 30 or so employees currently.  We have over 200 employees that are hourly and work anywhere from 5-40 hours/wk. 

Many of the employees that currently work above 30 hrs/week, will likely be reduced to under 30.  There simply isn't enough profit margin for us to cover all of our full time employees, which Obamacare will require.  In the eyes of the government, 30 hours = full time.

[clacy]

How much of these cost increases are Obamacare?

Obamacare is mostly a regulatory framework for the individual market, and not nearly as much in the group market, is it not?  I haven't dug into this stuff in a long time... forgive my ignorance.

It's really hard to say, because you have demographic changes to your workforce of course.  But 2 years ago, we had a -5% reduction if you can believe that.

Previously, we had been seeing roughly 10% increases/yearly.

[clacy]

Prior to July of last year, we had Blue Cross and they hit us with a 52% rate increase.  We shopped rates and settled on a different carrier for only a 33% increase.

[MediumTex]

How much of these cost increases are Obamacare?

Obamacare is mostly a regulatory framework for the individual market, and not nearly as much in the group market, is it not?  I haven't dug into this stuff in a long time... forgive my ignorance.

When you are suddenly required to cover children of employees far into adulthood, that alone can drive up costs a lot.

On a somewhat related note, for anyone not currently on a high deductible health plan, you should familiarize yourself with them, because these are the types of plans we will all be on eventually.

Under a HDHP, you basically pay the first few thousand of out of pocket medical expenses (ideally from a health savings account that you or you and your employer fund), and after you have absorbed this cost the plan starts paying 80% or so of covered charges.

It's not as dumb as it sounds.  I've been on one for a couple of years and I actually sort of like it.  With three kids who get sick all of the time, we meet our $3,000 deductible early in the year and then enjoy the 80/20 arrangement thereafter.

For a typical doctor visit that is billed at $80-$100, the 80/20 arrangement results in a significantly lower cost per visit than a PPO with a $35 or $45 copay for a doctor visit.

***

clacy, what types of plans do you offer your employees?

[doodle]

Heres kind of what I think would be a decent start to fixing things.

I think high deductible plans for all Americans with a single insurer (the government) is the best way to go.

Give every American $500 dollars to put towards testing and preventative care on a yearly basis.

After that the next $2000 dollars or so comes straight out of pocket...which gives people and incentive to stay healthy and shop around for services.

Then do maybe an 80/20 until $5000 dollar limit is reached at which time insurance kicks in at 100%.

For people below the poverty line  with extreme chronic conditions perhaps some assistance or aid to help with costs.

Make whatever changes are necessary to get pharm companies and hospitals to be more open and upfront about displaying costs. Allow the marketplace to work!

[Pointedstick]

Make whatever changes are necessary to get pharm companies and hospitals to be more open and upfront about displaying costs. Allow the marketplace to work!

IMHO this is the biggest part. You can't have a market without prices; no other reforms will work within a market context if that market is sufficiently unhealthy that there are no prices.

[doodle]

Make whatever changes are necessary to get pharm companies and hospitals to be more open and upfront about displaying costs. Allow the marketplace to work!

IMHO this is the biggest part. You can't have a market without prices; no other reforms will work within a market context if that market is sufficiently unhealthy that there are no prices.

Im not sure what led to the current mess, but I have never seen such a dysfunctional system.

If the drug and hospital marketplace is functioning, what is the argument for going through myriad insurance companies? Has anyone seen the complexity of hospital billing and the amount of wasted complication involved in the present private insurance system? Cant this mess be designed out by just simplifying the plan options and going through a single insurer (the gov)? The high deductible plan type already discourages fraud and abuse because consumers are paying for that out of pocket.

[doodle]

You know when you think about it, the current health care crisis is as much the fault of a successful capitalistic marketplace as it is the lack of one.

Rampant marketing in the food space and the creation of addictive processed foods by mega-corporations is a huge cause of our high health care costs. This coupled with the sedentary lifestyle that our highly mechanized society has allowed for create a health nightmare.

Humans are lazy and like sweet and salty things. Our society makes these readily abundant. This of course has huge health costs. Theoretically, we should just let this unhealthy behavior cull the herd and let people who cant afford care die off. Unfortunately it isnt that simple or easy.

Either someone has to come in and regulate the food system or we have to ultimately let people pay for their bad decisions. 

My guess is that the solution will lie with a compromise somewhere in the middle.

[Benko]

Has anyone seen the complexity of hospital billing and the amount of wasted complication involved in the present private insurance system? Cant this mess be designed out by just simplifying the plan options and going through a single insurer (the gov)?

because the gov is sooo really wonderful at cost containment?
Have you really thought about what you are saying?

[Benko]

"Either someone has to come in and regulate the food system or we have to ultimately let people pay for their bad decisions. "

We know which you want i.e. to regulate the food system, since you know what is best.

Doodle, since you like spiritual stuff, berhaps you missed this (I posted recently in another thread).  This is from I am That (and the person speaking is on a level with Lao Tsu):

"When you deceive yourself that you work for the good of all, it makes matters worse, for you should not be guided by your own ideas of what is good for others.
A man who claims to know what is good for others, is dangerous."  [bolding mine]

[Pointedstick]

Im not sure what led to the current mess, but I have never seen such a dysfunctional system.

If the drug and hospital marketplace is functioning, what is the argument for going through myriad insurance companies? Has anyone seen the complexity of hospital billing and the amount of wasted complication involved in the present private insurance system? Cant this mess be designed out by just simplifying the plan options and going through a single insurer (the gov)? The high deductible plan type already discourages fraud and abuse because consumers are paying for that out of pocket.

It starts with the historical accident of employers deciding en masse to offer health insurance as a benefit during WWII when wage controls prevented them from offering raises or higher pay. That got lots of people to carry health insurance.

What happened later was that the state and federal government started passing laws mandating that insurance cover this, or that, or some other thing. Every new thing that insurance had to pay for was something that hospitals could obscure the price of, since people no longer needed to shop around or experienced sticker shock since their insurance was paying for it.

Of course, this lead to billers having the near-unlimited ability to raise their prices, which caused insurance companies to need to in turn raise the rates they charge to their customers, pricing some people out of the market and forcing them to pay the sticker price which of course is never visible.

All of this is exacerbated by pharmaceutical patents, a supply-demand imbalance in the number of doctors, liability systems causing the practice of defensive medicine, rising obesity and chronic conditions that western medicine is really bad at dealing with…

[Jan Van]

My guess is they'll fix the health care mess right after they pass gun control legislation.

[Pointedstick]

Either someone has to come in and regulate the food system or we have to ultimately let people pay for their bad decisions.

Gee, we could never have that. 

[Tyler]

Good healthcare summary, Pointedstick.

Don't forget about the laws that forbid insurance companies from selling policies across state lines.  Even with the ACA, that's the reason there are 50+ exchanges to set up and not just one.

Personally, I wish they would just:

1) Do away with the state lines in the medical market and let the insurance providers provide portable national policies like they do in the auto insurance market. 
2) Completely divorce health coverage from employment.  The system of switching health coverage every time you switch jobs is stupid and anachronistic.  Since the days of working at the same company most of your life are a quaint thing of the past, this really puts a strain on individuals in a more mobile work marketplace. 

Note that these two changes would also solve much of the pre-existing conditions debate, since one could keep their personal coverage perpetually even if they (gasp) move out of state or take some time off of work. 

Of course, neither party is promoting either of those things.  -sigh-

[doodle]

Either someone has to come in and regulate the food system or we have to ultimately let people pay for their bad decisions.

Gee, we could never have that. 

That is easier said than done. It is very difficult for a prosperous society to just let people fall through the cracks. There are countries like that. In India you can step over human corpses while you go about your daily business.

I dont know why people find food industry regulation so insidious but find it perfectly natural that massive corporations spend billions of dollars shaping childhood eating habits and custom designing foods to tap into evolutionary pleasure centers.

Seriously, where does the greater evil lie?

[Libertarian666]

There is a very simple solution to this problem. Everyone gets unlimited, high quality, free health care at the government's expense!

Just like all the other free high quality services from the government...

[Ad Orientem]

My small business, which covers roughly 25 employees and their families just received our rates, which renew in July......

+32% increase

Last year it was +33%

Obamacare doesn't seem to be helping

Not a fan at all of Obamacare which seems to interfere with the best of our healthcare system while locking in it's worst aspects. That said and in fairness it must be noted that most of its provisions have not come into effect. Defenders would argue that what we are seeing is the old system still at work.

Color me dubious, but we shall see.

[clacy]

My small business, which covers roughly 25 employees and their families just received our rates, which renew in July......

+32% increase

Last year it was +33%

Obamacare doesn't seem to be helping

Not a fan at all of Obamacare which seems to interfere with the best of our healthcare system while locking in it's worst aspects. That said and in fairness it must be noted that most of its provisions have not come into effect. Defenders would argue that what we are seeing is the old system still at work.

Color me dubious, but we shall see.

Many Obamacare provisions have come into affect actually.  For instance, I'm now required by law to pay for a 26 year old "child" (using that term loosely) of one of my employees. 

In fact, I have an employee how has a daughter who is 24, who is pregnant.  I have to pay for her insurance.  How is that fair?

[Ad Orientem]

There is a very simple solution to this problem. Everyone gets unlimited, high quality, free health care at the government's expense!

Just like all the other free high quality services from the government...

As much as I dislike government programs there is an argument to be made for a single payer system like almost every other country in the industrialized world has adopted in some form. Even Justice Antoni Scalia said as much in his dissenting opinion in the Obamacare case. Indeed a hybrid system that guarantees a minimal level of care while allowing for private health insurance and care such as exists in many countries might have been the best way to go. The issue is not whether to ration health care or not. Rationing is what we do when there is a limited supply of something that everyone wants or needs. The question is on what basis will we do the rationing?

Our current system rations health care primarily on the basis of ability to pay. In the modern world this strikes me as morally dubious. Pure socialized systems (i.e. Canada) ration exclusively on the basis of need as determined by the state. While ensuring basic care this system also condemns citizens to dependence on a government agency that often combines the efficiency of the Post Office with the compassion of the IRS. Hybrid systems (i.e. Costa Rica, Great Britain and France) have elements of both and the problems attendant to both. No system is perfect. But I am VERY RELUCTANTLY coming round to the pov that the pure capitalist approach is economically untenable (take a look at the rate charts for the last 25 years) and immoral.

Our current system is broken beyond repair. Where to go is an open question with me. But I no longer believe that tinkering with the tax code or just getting the government out if it is the answer.