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CPBJ Extra Blog

Scary numbers, not-so-scary results

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“Talking about upcoming health insurance renewals, local brokers have started using terms like 'tsunami,' 'scary math' and 'significant increases.'”

That's the opening line from a story I wrote a year ago, titled "Plan for the worst, health insurance brokers warn: Businesses could face hefty increases."

I mention that story because of another one I just read. Its title is long but instructive: "Health Plan Premiums Are Skyrocketing According To New Survey Of 148 Insurance Brokers, With Delaware Up 100%, California 53%, Florida 37%, Pennsylvania 28%."

It's also a little misleading, because the 28 percent referenced for Pennsylvania is in the individual insurance market. For the small-group market, which is where many businesses fall, the story says Pennsylvania's average increase is a whopping 66 percent.

For purposes of comparison, the story says the national average increase was 12 percent in the individual market and 11 percent in the small-group market. I would also like to note here that the story was based on that bane of reporters, the proprietary survey — this one by Morgan Stanley — which is why I wasn't able to report on it directly.

So anyway, 66 percent. That's major. When they get hit with something like that, people don't take it quietly.

But I haven't really heard much screaming lately. Looking back at an October article by a colleague, "As premiums increase, companies bite bullet on insurance," there's definitely distress, but no mass report of companies dropping benefits. Corroborating that is the newly released RAND report that says the uninsured rate among 18-64-year-old adults in the United States fell 23 percent between September 2013 and March 2014, with gains in employer-sponsored insurance driving that reduction.

"An estimated 8.2 million took up employer-sponsored plans, and most of them were previously uninsured," says this excellent look at the report.

At this point, you might be asking yourself what gives. It's a good question for which — surprise! — I don't have an ironclad answer. But I do have some educated guesses, as follows.

First, a lot of small businesses haven't started offering plans that comply with all of Obamacare's requirements, even though we're way past Jan. 1, 2014. That's because many of them sidestepped the issue by simply re-upping their existing plans early — a tactic whose lifespan was recently extended a couple of years, if insurers choose to play along.

Second, businesses are considering new health insurance options, such as defined-contribution plans and self-insurance. I keep hearing that it's happening, or going to happen, and while I haven't yet found hard numbers, the fact that insurers and brokers have been going crazy developing new options over the past few years tells me that they really do expect that companies will be making some big changes in how they do insurance.

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