Comments on: EXPAND COMMONWEALTH CARE?

By: Brian Rosman

Brian Rosman — Mon, 12 May 2008 02:32:40 +0000

Different insurers do their price breaks at different ages. I don’t know why they make big jumps rather than smoothing increasing prices as people age.

Massachusetts law limits the age differential to a 2:1 ratio, for individuals and small groups. In other words, the oldest people can’t pay more than double what the youngest pay. This is called “modified community rating,” or “rate bands.” This results in a fairly substantial subsidy of the old by the young. On average, a 64-year old spends about 6 times in medical costs what a 21-year old spends. So constraining the age difference to just 2 to 1 is a benefit for the seniors.

However, if we are in an environment where everyone is required to have insurance, than it might make sense to forbid all age discrimination – “pure community rating.” New York and Vermont already do this for small group and individuals. NJ and PA do this for some plans. In 2003, NH dropped its pure community rating for small groups. The political furor caused by firms with older workers, who saw big premium increases, led to NH to reinstate community rating in 2005.

By: Bill Randell

Bill Randell — Mon, 12 May 2008 00:43:02 +0000

PJ:

For what it worth, all the carriers base the rates on age. In other words the loss of the younger employees really hurt the average for the small groups and whether it was Fallon or any other carrier the same thing would have happened. What else can the carriers base the rates on, however, when there is no medical underwriting?

PJ, if you are in good health you should really consider Fallon HSA compliant options.

Bill

By: PJ

PJ — Sun, 11 May 2008 11:50:19 +0000

Martha, thank you, you are so nice!

By: CommonHealth

CommonHealth — Sun, 11 May 2008 03:17:51 +0000

Hi PJ – there is a lot of frustration about the cost of health insurance for small businesses. Jon Hurst, from the Retailers Ass. of MA and Charlie Baker from Harvard Pilgrim went back and forth on the issue in March:

http://www.letstalkhealthcare.org/employer/small-large-business-health-insurance-costs/

Nothing resolved…but perhaps some insights.

I’ll try to find someone else who can talk about the price jump at age 40.

Martha

By: PJ

PJ — Sat, 10 May 2008 13:55:22 +0000

Hi Martha,
Thank you so much for replying. I am frustrated with the fact that small companies cannot negotiate a reasonable rate (and the age rating!)
Actually, my company just closed and I will be starting a job with the small business that bought a lot of our equipment. However, the owner wants me to subcontract for eight weeks before he’ll add me to his payroll. (This self employment income will enable me to claim my health insurance expenses on my tax return.)
I purchased my plan through HSA insurance in Braintree, MA. They had decent rates for both Fallon and Neighborhood. I opted to go without prescription coverage even though I know I will be forced to have it starting in January. The plan to which I subscribe is Fallon Premier Select Care. It is a great plan and I would love to be able to continue to afford it on my own. I am paying $286.00 per month ($350.00 with prescription coverage).
I haven’t talked to my “new” employer about all the details and benefits yet. My previous employers will be working there also as commissioned salesmen. They are the now on Commonwealth Care and while I really like them a lot, (I worked for them for nine years) it makes me sick that they have the best of everything and are now paying $0 for healthcare while I would be grateful to be able to continue paying in the $300.00 range. (which won’t happen!)
I believe the age rating is unfair as it doesn’t seem to be “gradual” enough.
I hypothetically priced insurance plans for many different ages. I found that there is little difference in price from 20 years old to 39 years old. However, there is a drastic increase from age 39 to 40.

Martha, I really appreciate you taking the time to respond and your comments are helpful.
Thanks so much,
PJ

By: CommonHealth

CommonHealth — Sat, 10 May 2008 03:30:38 +0000

Hi PJ – you raise a lot of good questions and issues. I can help with a few responses.

1)”why this issue was not addressed?” Do you mean the age rating?
2) On subsidies “beyond what they think is affordable?” I believe the answer would be that the state can’t afford that.
3) Did you buy a plan through the Connector?
4) Does your employer offer a Section 125 plan(that would let you pay for health insurance on a pre-tax basis)?

Thanks for your comment.

Best, Martha Bebinger

By: PJ

PJ — Sat, 10 May 2008 01:38:42 +0000

Another problem with employer sponsored insurance is that small businesses don’t get to negotiate rates with these greedy insurance companies. I happen to work for a small company and our monthly premium for an HMO with Fallon (Fallon seems to have the most reasonably priced plans available) went from $346 per month to $439 per month. A sales rep at Fallon confirmed what I thought: small group rates are calculated based on the average age of the group. There were only six of us buying the insurance and one of the thirty somethings left the company, raising the average age.
My company canceled the health plan, leaving me to purchase my own. I needed to purchase my coverage before May as I turn 40 during that month and purchasing after would have meant a huge cost difference.
I feel that this is terribly unfair. There is no way I can afford to renew my currrent plan next May. Unfortunately, the industry in which I am skilled is made up of mostly small companies.
Can anyone tell me why this issue was not addressed? Also, since the Connector Board went through all the trouble of creating their Affordability Schedule, why don’t they subsidize premiums beyond what they deem affordable? The Connector’s “bronze” products are a joke and I feel shouldn’t even be offered unless they were deeply discounted. I would consider one of these high deductible plans if they were inexpensive enough to allow me to contribute $50.00 per week or so to an HSA. They are not reasonably priced at all.
This mandate is a joke. I agree with another poster on this board that there should be some sort of asset test. I know it would be complicated and unfair, but I know several people who are better off financially than I am who show limited income and therefore are covered by Commonwealth Care. I am just about 40 and I make around $40,000.00 per year. Next year, I believe there will be no health plans available within my “affordability” range. I can only hope.

By: Peter

Peter — Fri, 09 May 2008 09:13:46 +0000

Mr. Lord,

We could be in a position to consider seriously making Commonwealth Care available to lower-income workers who can’t afford their employer-sponsored insurance if the many employers in Massachusets that don’t make a truly fair and reasonable contribution to insurance were required to do so.
Instead, we are letting these employers off the hook, leaving these workers uninsured, and making other employers who do the right thing help pay for the care of these other employers through the assessments for the uncompensated care pool, and cost-shifting to their insurance premiums. I don’t understand why most of your members think this makes sense.

Peter