Wednesday, February 8, 2012

Penalizing patients

This obviously exposes a glaring loophole in how insurance companies plan their premium rates. After having low increases this year, the insurance companies now say that rates will go up substantially.

"Even as Massachusetts business and government leaders celebrate the most modest premium rate hikes in years for small employers and individuals, speakers at a health insurance seminar here yesterday warned that the main trend restraining bigger increases - fewer people seeking health care in the past year - already may be changing.

“We definitely are starting to see some uptick,’’ said Martha R. Temple, president of the New England market for insurance giant Aetna Inc. “The economy is turning up. And we think we may see, sometime in 2012 and 2013, the utilization tick up to historic levels.’’ That could mean a return to the double-digit annual increases of the past decade.

Massachusetts insurers have been able to limit base rate premium increases - they average 1.8 percent for the period starting April 1 in the so-called small-group market - in part because the weak economy caused many people who lost jobs or were afraid of losing them to delay elective procedures, speakers at the conference said. But as the economy strengthens, they expect more people will return to doctors and hospitals, driving up spending on medical care."

"Insurers said they were able to limit base rate premium hikes partly because they had planned for higher health care use and also because they were starting from a larger premium base after years of hefty increases. Many employers pay more than the base rate because of additional factors such as their location or the age of their workforce."

If I think about this with my non-business, non-medical brain, I would assume if more people are insured that means there are more people paying premiums - not all uninsured people were sick people, they just didn't want or couldn't afford insurance or health insurance was not available to them. You would think this would help the insurance companies - they may be insuring more people and paying more claims but more people would be helping to pay for them.

Also, I would think that insurance companies would know how to manage their costs to account for the fact that people will use their health insurance when they have it. Premiums should not go up because people use their insurance. This is like the company in California, that I blogged about a few years ago, who wanted to increase premiums by as much as 70% because they were insuring sick people who used their health insurance because the healthy people who didn't go to the doctor had left the plan because the rates were so high.

This is penalizing the patients for using their health insurance and going to the doctor. I'm sorry but I think insurance companies need to rethink how they determine premiums. This is the same if you file a claim with your home owners or car insurance and then your rates go up. Insurance is there to help you in case you need it. It is not working if you are reimbursed or covered for something and then your rates go up - meaning you pay the insurance company back for everything they saved for you initially over an extended period of time.

This is a broken system where insurance companies are winning and the patients are losing.

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