Saturday, October 24, 2009
One last slop at the trough?
In advance of a health insurance reform bill that might kill their monster profits and associated bonuses, the health insurance companies are implementing large premium increases on small businesses and individuals, those unable to negotiate with the extortionists.
Insurance brokers and benefits consultants say their small business clients are seeing premiums go up an average of about 15 percent for the coming year — double the rate of last year’s increases. That would mean an annual premium that was $4,500 per employee in 2008 and $4,800 this year would rise to $5,500 in 2010.It may well be the last year of unbridled profits and the bonuses that go with them, so they are going for the max. The worst is yet to come, just imagine how many claims they will have to deny to maintain their level of profit.
The higher premiums at least partly reflect the inexorable rise of medical costs, which is forcing Medicare to raise premiums, too. Health insurance bills are also rising for big employers, but because they have more negotiating clout, their increases are generally not as steep.
Higher medical costs aside, some experts say they think the insurance industry, under pressure from Wall Street, is raising premiums to get ahead of any legislative changes that might reduce their profits...
..But benefits consultants say there is no doubt that premiums are soaring for many small businesses. Edward Kaplan, a consultant with the Segal Company, said his clients were seeing renewals for coverage at prices 15 to 23 percent higher this year. Last year, he said, they typically faced increases of 7 to 12 percent.
The brokers and consultants say the price jumps seem hard to justify. “Frankly, I’m mystified by the size of the increases,” said one broker, Charles J. Newman, who works with small employers in the New York area.
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