A couple of years ago, I received notice of a 41%premium increase from my insurance company. Two weeks later I received notice that the company was canceling the policy since it was terminating the joint venture between Guardian and HealthNet under which the policy had been issued in New Jersey. In HealthNet's annual report for that period they noted that they had been able to increase profits by 20% on a 12% growth in revenues. They also gave a bonus of $25,000 to the employee who came up with a legal way to cancel small business policies in NJ that were less profitable (including mine), saying that the cancellation saved them tens of millions of dollars. To make matters worse, they did not provide an invoice for the new premium amounts despite telephone calles asking for an invoice. When they canceled the policy the cancellation was made retroactive "because payment had not been received". By the time we found out we had been canceled we had been without coverage for six weeks. When calls were placed questioning the action, we were told that the joint venture had been terminated and there was no one to talk with. I actually ended up terminating health benefits for all of our employees because no other insurance company would cover us. Instead, I purchased insurance for myself through the Chamber of Commerce and worked with my staff to help them move to other plans individually. Ultimately there was a class alaw suit about this and HealthNet was ordered to pay unreimbrsed medical costs incurred by people during the "transition" period but that did not help us.
As an aside, the premium requested following the increase by HealthNet was $24,000/year for family coverage and $10600 for individual coverage. I purchased an equivalent Blue Cross policy for about half that amount but could not purchase coverage for my staff.
The problem is that people want something for nothing. People have been conditioned to going to the doctor and paying very little. Insurance should be for serious diseases and accidents. Imagine how much car insurance would be if it covered oil changes and new tires.
My company has high deductible coverage and a health savings account. This is great for me because it's not year to year, but the balance grows minus what I use.
If the insurance companies do not want small claims they should change their policies to pay for less. Premiums are based on their past and expected loss experience. I doubt seriously if people will pay high premiums and not use the coverage.
It's a viscious cycle. Premiums are sky high, policies cover everything, so people go to the doctor. Doctor's bills are high so people have to use their insurance that covers everything.
When you are self employed all you ca afford is high deductible insurance so you don't go in for every little thing. You still can go for years and not use your insurance and your premiums will go up because you are still paying for those that have expensive illnesses.Quote:
Premiums are based on their past and expected loss experience. I doubt seriously if people will pay high premiums and not use the coverage.
But isn't that the very definition of insurance and spreading the risk. I have had one small claim on my HO ins in my entire lifetime. However, my premiums keep going up. Why, because others have claims and I don't want to take on the risk myself if I should have a big claim.