The lesser of two evils is still evil
Today was the rate filing deadline for insurers planning on participating in Colorado's new health insurance exchange, or "marketplace." For months, the media has been anticipating "rate shock" as insurers raise premiums to meet new requirements, such as not sell junk insurance.
When the filings are released publicly by the Division of Insurance in a few days we will know the scope of the "rate shock," but will we really be shocked to see yet another double-digit increase in premiums?
As a small employer, I have navigated the stormy waters of health insurance plans with my broker since 2008. Every year, premiums jump another 10% on average. At the same time, the benefit design of available plans across all carriers gets worse. Small employers are forced every year to try and pick the lesser of two evils.
Do employers keep their existing plan and absorb a huge premium increase, or do they trade off the higher premiums for reduced benefits and higher cost sharing, forcing their employees to shoulder more of the health care burden?
My company's annual renewal date is July 1st and I just got this year's renewal package prepared by my broker.
I am looking at an 18.4% increase in premiums on July 1 if I simply maintain my current benefits. That's nearly twenty percent before any additional "rate shock" due to 2013 Exchange rate filings.
The alternatives presented by my insurer to reduce premiums all increase my High Deductible to an even higher deductible. Plus, all of the new plans cleverly add a "specialty drug" tier that imposes a costly $250 copay per prescription. These are drugs that are the most innovative and most essential to life for people afflicted with life-threatening illnesses such as cancer, arthritis, and multiple sclerosis. Nearly one in 5 Americans rely on such specialty drugs, so the creation of this fourth tier with high cost-sharing will have a profound impact on many – forcing the insured to pay incredible amounts for drugs that they literally cannot live without.
My own son frequently uses specialty drugs, so shifting to one of these lower-premium plans would actually increase our total spending considerably. Since I select the plan for my company, I can run the numbers and pick the lesser of the two evils (18.4% premium increase) to try and fit my family's needs.
But most people don't have that luxury, and have to go with the plan selected by their employer.
We are all facing a no-win situation. Do we accept higher premiums that we cannot afford or do we reduce our benefits considerably, putting us at higher risk for catastrophic losses and a strong financial incentive to avoid getting the care we actually need? Granted, the Affordable Care Act provides a lot of protections that we didn't have before and will help a lot of people. However, it will also accelerate the extremes of this no-win situation. Eventually, most Americans will find themselves with expensive health insurance that doesn't cover much more than an ill-fitting hospital gown.
When all your option are bad ones, it's time to create a new choice.
We can do that in Colorado by putting single payer on the ballot in 2014 and voting for a lower-cost, higher-standard universal health care system for all Coloradans. Then we would all be winners.
You can help us achieve our goal.
Buy tickets to our benefit concert at Lannie's Clocktower Cabaret on May 21, 2013.