7 ms·

Only to a degree because policies basically always have an upper limit on coverage. If the payouts are dropping because there's a massive reduction in claims,

by joshAg 5y ago

Only to a degree because policies basically always have an upper limit on coverage. If the payouts are dropping because there's a massive reduction in claims, then there's a pretty decent chance that paying the policy maximum on each claim still won't be enough. Plus, profits don't come directly from the premiums anyway. They come from the investments the insurer makes with the premiums. So sure, they can try to convince policy holders to increase coverage which allows them to charge a higher premium, or they can work on their loss modeling and investment strategy to better predict their actual loss ratio (which means they can have less money in reserve and more money in investments) or get better returns on the investments. And those 2 are usually a better use of resources since increasing coverage means an individual conversation with each policy holder. That's a lot of human-hours compared to the modeling and investing.

monocasa 5y ago
> So sure, they can try to convince policy holders to increase coverage which allows them to charge a higher premium Or they just stone wall and increase premiums anywhere they can until they hit targets. Like at a previous job I had at a 250 employee company where premiums went up $150/m one year because the previous year had two families had a kid get (very different kinds of) cancer out of the blue. You'd think that shopping around would've helped in that case, but the word got out somehow to the other insurance companies and they were giving us similar quotes. The power relationship is very very tilted in the insurance company's favor and they can more or less dictate terms.
- folkhack 5y ago
  > Like at a previous job I had at a 250 employee company where premiums went up $150/m one year because the previous year had two families had a kid get (very different kinds of) cancer out of the blue. It's bad enough that I've heard office gossips complain about other employees leveraging their healthcare turning into higher premiums the year after. Like, as evil as complaining their coworker's kid got cancer. When employees go through big health events it's hard to keep it under wraps in a work environment... especially in this "race to the bottom" society we happen to live in. You can bang on about privacy all you want, but people talk. I guess I'm shocked it happened in an office of ~250 as I've always seen it happen at much smaller places.
  - lotsofpulp 5y ago
    >It's bad enough that I've heard office gossips complain about other employees leveraging their healthcare turning into higher premiums the year after. Like, as evil as complaining their coworker's kid got cancer. That is how it would have to work if the employer wants to restrict the risk pool to the company's employees. After all, money has to come from somewhere. But employers are welcome to participate in healthcare.gov plans where the risk pool is much larger (across the whole state), and where individuals in the company cannot be solely blamed for increases in healthcare costs: It's bad enough that I've heard office gossips complain about other employees leveraging their healthcare turning into higher premiums the year after. Like, as evil as complaining their coworker's kid got cancer.
    - deleted 5y ago
      [deleted]
  - truffdog 5y ago
    Sometimes it's worse than the office gossip- https://slate.com/human-interest/2014/02/tim-armstrong-blames-distressed-babies-for-aol-benefit-cuts-hes-talking-about-my-daughter.html https://slate.com/human-interest/2014/02/tim-armstrong-blame...
- lotsofpulp 5y ago
  >You'd think that shopping around would've helped in that case, but the word got out somehow to the other insurance companies and they were giving us similar quotes. Employers are welcome to purchase healthcare.gov plans that are not allowed to price based on pre existing conditions: https://www.healthcare.gov/how-plans-set-your-premiums/ https://www.healthcare.gov/how-plans-set-your-premiums/ If an employer wants to self insure and restrict their risk pool to only their employees, then they have to pay for it.
  - monocasa 5y ago
    > Employers are welcome to purchase healthcare.gov plans that are not allowed to price based on pre existing conditions: Which are stupid expensive for anyone much above the poverty level. > If an employer wants to self insure and restrict their risk pool to only their employees, then they have to pay for it A 250 person company wasn't self insuring or restricting their risk pool to only their employees. They wouldn't be negotiating premiums with an insurance company if they were self insuring.
    - lotsofpulp 5y ago
      If they were not restricting their risk pool, then how would a couple kids with cancer affect the company's premiums? The costs would be distributed across a much larger population. When I was shopping around for health insurance for my businesses, the premiums were the same as what they would have been individually on healthcare.gov. Kaiser has a good report showing the costs are not that different based on firm size: https://www.kff.org/report-section/ehbs-2020-section-1-cost-of-health-insurance/ https://www.kff.org/report-section/ehbs-2020-section-1-cost-... The cost of healthcare is pretty predictable, and spread over a sufficient population converges to the same numbers. Only option I can think of is people were thinking that the employer reduced their portion of healthcare they were subsidizing, and so people thought premiums were going up since the size of the portion they were expected to pay went up? Most people do not really know to look at box 12 code DD of their W-2 to know what is happening with their healthcare insurance premiums.
      - 5y ago
nradov 5y ago
The Affordable Care Act (Obamacare) eliminated lifetime coverage limits. There are also limits of the minimum medical loss ratio. Unlike property and life insurers, medical insurers generate very little income from investments. Premium revenue comes in at about the same rate as claims are paid out. They don't have large reserves to invest. And most large employers are self insured anyway, so the ”insurance" company just acts as a claims administrator.
- joshAg 5y ago
  The parents in the thread don't specify medical insurance. They're talking about a moral hazard in all forms of insurance.

by joshAg 5y ago

monocasa 5y ago

> So sure, they can try to convince policy holders to increase coverage which allows them to charge a higher premium Or they just stone wall and increase premiums anywhere they can until they hit targets. Like at a previous job I had at a 250 employee company where premiums went up $150/m one year because the previous year had two families had a kid get (very different kinds of) cancer out of the blue. You'd think that shopping around would've helped in that case, but the word got out somehow to the other insurance companies and they were giving us similar quotes. The power relationship is very very tilted in the insurance company's favor and they can more or less dictate terms.

folkhack 5y ago
> Like at a previous job I had at a 250 employee company where premiums went up $150/m one year because the previous year had two families had a kid get (very different kinds of) cancer out of the blue. It's bad enough that I've heard office gossips complain about other employees leveraging their healthcare turning into higher premiums the year after. Like, as evil as complaining their coworker's kid got cancer. When employees go through big health events it's hard to keep it under wraps in a work environment... especially in this "race to the bottom" society we happen to live in. You can bang on about privacy all you want, but people talk. I guess I'm shocked it happened in an office of ~250 as I've always seen it happen at much smaller places.
- lotsofpulp 5y ago
  >It's bad enough that I've heard office gossips complain about other employees leveraging their healthcare turning into higher premiums the year after. Like, as evil as complaining their coworker's kid got cancer. That is how it would have to work if the employer wants to restrict the risk pool to the company's employees. After all, money has to come from somewhere. But employers are welcome to participate in healthcare.gov plans where the risk pool is much larger (across the whole state), and where individuals in the company cannot be solely blamed for increases in healthcare costs: It's bad enough that I've heard office gossips complain about other employees leveraging their healthcare turning into higher premiums the year after. Like, as evil as complaining their coworker's kid got cancer.
  - deleted 5y ago
    [deleted]
- truffdog 5y ago
  Sometimes it's worse than the office gossip- https://slate.com/human-interest/2014/02/tim-armstrong-blames-distressed-babies-for-aol-benefit-cuts-hes-talking-about-my-daughter.html https://slate.com/human-interest/2014/02/tim-armstrong-blame...
lotsofpulp 5y ago
>You'd think that shopping around would've helped in that case, but the word got out somehow to the other insurance companies and they were giving us similar quotes. Employers are welcome to purchase healthcare.gov plans that are not allowed to price based on pre existing conditions: https://www.healthcare.gov/how-plans-set-your-premiums/ https://www.healthcare.gov/how-plans-set-your-premiums/ If an employer wants to self insure and restrict their risk pool to only their employees, then they have to pay for it.
- monocasa 5y ago
  > Employers are welcome to purchase healthcare.gov plans that are not allowed to price based on pre existing conditions: Which are stupid expensive for anyone much above the poverty level. > If an employer wants to self insure and restrict their risk pool to only their employees, then they have to pay for it A 250 person company wasn't self insuring or restricting their risk pool to only their employees. They wouldn't be negotiating premiums with an insurance company if they were self insuring.
  - lotsofpulp 5y ago
    If they were not restricting their risk pool, then how would a couple kids with cancer affect the company's premiums? The costs would be distributed across a much larger population. When I was shopping around for health insurance for my businesses, the premiums were the same as what they would have been individually on healthcare.gov. Kaiser has a good report showing the costs are not that different based on firm size: https://www.kff.org/report-section/ehbs-2020-section-1-cost-of-health-insurance/ https://www.kff.org/report-section/ehbs-2020-section-1-cost-... The cost of healthcare is pretty predictable, and spread over a sufficient population converges to the same numbers. Only option I can think of is people were thinking that the employer reduced their portion of healthcare they were subsidizing, and so people thought premiums were going up since the size of the portion they were expected to pay went up? Most people do not really know to look at box 12 code DD of their W-2 to know what is happening with their healthcare insurance premiums.
    - 5y ago

nradov 5y ago

The Affordable Care Act (Obamacare) eliminated lifetime coverage limits. There are also limits of the minimum medical loss ratio. Unlike property and life insurers, medical insurers generate very little income from investments. Premium revenue comes in at about the same rate as claims are paid out. They don't have large reserves to invest. And most large employers are self insured anyway, so the ”insurance" company just acts as a claims administrator.

joshAg 5y ago
The parents in the thread don't specify medical insurance. They're talking about a moral hazard in all forms of insurance.