Health Care Cost Increase in Double Digits
According to an article on Insurancenewsnet.com, Health Care Costs in the US will rise 10 percent over the next 12 months. These projections were taken without calculating the effect that any type of Health Care Reform would have on rates. Surprisingly, these projected increases are down from last year’s rise in premiums. The article explained further that HMO and POS (Point of Sale) plans were expected to have the largest rise in premiums, with PPO and EPO estimated lower.
This is of course horrible news for small businesses already struggling to pay for employee benefits.
What advice can be offered when a national insurance broker like Aon is predicting 10 percent across the board increases in health insurance premiums?
The advice is NOT sit-back, auto-renew and wait for a Public Option. Because there is a very honest chance the Public Option never materializes. As a small business owner what you should be doing is actively working with your insurance broker to find available solutions (See High Deductible Plans). The days of 100 percent employer pay health plans is all but over. Provide your employees with multiple options for their health plan and look into voluntary benefit programs. Find ways to offer your employees benefits that don’t effect the business’s bottom line. A quality insurance broker will be willing to sit down and an insurance project plan with you.
Basically, like all things small business, complacency is the Devil. Become complacent and you’ll have larger issues than your Health plan.
“If you’d like to talk about your Insurance Risk, contact me today. We can talk about your exposure, and begin our relationship!”
Thank you,
Ryan H.
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I agree. We are not going to feel the full effect of this PPACA for several years. If MassCare is any indicator of where we are headed, we may be in trouble. I don't not agree with the legislation as it stands. However, I believe some of the ideas have merit. From what I know, actuaries have agreed that computations on children with Pre-Ex can be added to the carrier risk pools with minimal negative rate movement (as an example)
I think the key to bringing down premiums falls to true catastrophic plans (like HSAs) and allow the consumer to self insure up to a $5K level or greater. At the end of the day, Insurance companies DO NOT control the cost of healthcare.
I will not be surprised if we see $20K and $50K deductible plans being introduced to the market in late 2011 and 2012.
Lance,
Thanks for the kind words. Your insight is fantastic. Mainstream news of the Health Insurance Bill has calmed down but we have not felt the effects yet…
And I agree with your 40% assessment.
Ryan
Lance,
Thanks for the kind words. Your insight is fantastic. Mainstream news of the Health Insurance Bill has calmed down but we have not felt the effects yet…
And I agree with your 40% assessment.
Ryan
Ryan, good post and you make an excellent point that I share with folks as well. Now is the time to engage the process of buying solid health insurance. Either you step in and take control of the process now or the process will dictate your actions later. My sources at several of our carriers are saying that the increases will be in the 40% range on individual and small group policies. I think insurancenewsnet is a great resource. However, I have to go with intel from our carriers.
At the end of the day, its time to get moving. Get a solid agent and get a plan in place. No plan? You are at the mercy of the clowns in Washington DC. Who's a better decision maker in regard to your insurance? You or Congress?
Make it happen now! Ryan is right
Have insurance brokers and providers reviewed their balance sheets and their cost of operations to help reduce *their* costs prior to advocating premium increases? Have these same organizations provided an internal review to ensure that they’re absolutely in need of increasing premiums which, at today’s CPI rates, is usurious. How about recommending a 3% increase? Frankly, that sounds more reasonable. Nonetheless, any premium increase recommendations should be the result of such internal reviews across the board.