Hits & Misses – 2009/4/30

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  1. Ron Greiner says:

    This is not true – “according to the Kaiser Family Foundation, the average individual health plan costs about $400 a month, and a family policy costs more than $1,000.” This is pure propaganda.

    That’s the cost of over-priced, non-portable employer-based health insurance. Just go to ehealthinsurance and you will find that a 30-year-old male can get HSA health insurance for $60 a month in most states.

    The Kaiser Family Foundation sould check their facts. They do use a lady from NJ. Of course, use NJ where the competion is so limited and the premiums are so high.

    MIT used to display their COBRA premiums for former employees and family coverage was as high as $1,500 a month. So I wouldn’t pay too much attention to Dr. Gruber. MIT is not on the cutting edge for their own employees health insurance.

  2. Linda Gorman says:

    The rates for an individual policy for a 48 year old woman in New Jersey are available at http://www.state.nj.us/dobi/division_insurance/ihcseh/ihcratepage_be.pdf. $233 or so per month is the lowest. Plans are guaranteed issue in New Jersey.

    In states that haven’t destroyed their individual insurance markets, individual plans are available for $130 a month or just slightly more than the 5 percent that the left thinks is reasonable to pay. Per capita annual adult (not elderly, not disabled) Medicaid payments in New Jersey were $2,928 in 2006 according to StateHealthFacts.org.

    In terms of overall cost, private health insurance looks like a better deal even in New Jersey. Vouchers anyone?

  3. Bart says:

    The existence of a $60 ehealthinsurance plan does not refute Kaiser’s claim about average cost, whether Kaiser’s figure is accurate or not.

    I’m all for HSA and high-deductible plans, but deductibles alone don’t account for the difference between the $60 policy and Kaiser’s $400 figure. The 2008 cost of a Blue Cross small group HSA-compatible plan for a 52 year old male in California was around $315. The average across all age bands and across all companies may be a little lower, but I wouldn’t expect it to be that much lower.

    The $60 premium is obviously for a bare-bones policy for a 30 year old male with no pre-existing conditions. There is simply no meaningful comparison between that and a national average.

    The $233 New Jersey figure is a more realistic snapshot of costs for a population. The cost is close enough to the Medicaid average that more details would be needed to determine whether it’s really a better deal. Although when you consider that cost-shifting likely hide much of Medicaid’s true costs, I suspect it would be.

  4. Ron Greiner says:

    Bart the $60 premium could be from Humana with inpatient, outpatient and Rx covered to $5 million max. A 30-year-old male in Tampa is $57 a month. This includes $0 deductible for preventative care.

    If you strip Rx out the premium it is below $50 a month.

    Your example is a group plan from the Blues. We are talking about Individual Insurance like the article was talking about.

    You are correct Bart employer-based insurance is very expensive.

  5. Bart says:

    Ron, you miss my main point. The $50 and $60 premiums you cite are for young males with no pre-existing conditions. There is no possible way that this represents the average of risk-rated premiums that could be offered to an entire population.

    My Blue Cross example was for a $2400-deductible HSA-eligible plan, not for a first-dollar Cadillac plan. So why else would there be a huge difference in cost? Maybe Humana has much lower overhead than Blue Cross, but this would be surprising since the Blue Cross plan doesn’t have the expense of underwriting.

    Perhaps California mandated benefits are higher, but in that case Humana would have the same problem in the California market.

    If Humana had to quote for the same individuals in the same market that the B.C. group plan covers, my guess is that the average for Humana individual plans would be close to the average for B.C. high-deductible group coverage.

    My point is that in order to be meaningful, the comparison needs to be average-to-average, not best-case-to-average.

  6. Ron Greiner says:

    Bart, the article said the average cost for individual insurance is $400 a month for single coverage. That is not true. That’s what I said.

    I never said that $60 “represents the average of risk-rated premiums that could be offered to an entire population.”

    I would agree that taxpayers are paying over $1,000 a month for city and county workers with family coverage to Blue Cross. The taxpayers suffer. Yet, in the free and open market a 30-year-old couple and 2 children can get HSA insurance for $207 a month in Lansing, MI. This is TIME Insurance, America’s oldest insurance company. The HSA One Deductible “decreases” until it’s $3,000 for the entire family. Plus, a 24 month rate freeze. Maybe the UAW should consider not using BCBS.

    Got the BLUES, feeling bad, paying way too much for health insurance?

    It’s TIME for your HSA.

  7. Bart says:

    Ron, you say that the Kaiser $400 average is not true, but you don’t offer a more accurate average figure. Instead you advertise a number of “best case” quotes that have nothing to do with the topic, and don’t refute the Kaiser statement.

  8. Ron Greiner says:

    Another accusation Bart? You said, “The $60 premium is obviously for a bare-bones policy for a 30 year old male with no pre-existing conditions” That’s not true.

    Now I’m “advertising” a number? Bart, The AHIP just reported that “Employer-Based Health Insurance” costs $400 a month for single coverage and $1,000 a month for family coverage in 2008. I really thought you knew that.

    Who are you going to believe, AHIP or Kaiser?

    Forgive me.

    Remember, if you want to go tax free with a Medicare MSA, none of the Blue Cross plans in America have one, figures. Blue Cross was really slow with the MSA in the under-age population too. Bunch of lathargic Blue Cross tax gobblers.

  9. Bart says:

    Obviously the NPR reporter used the terms “individual coverage” and “single coverage” interchangeably. There’s no reason to think the reporter intended to exclude employer-based coverage from the aggregate $400/$1000 figures. Otherwise, your objection could only be to the $400 “individual” number, and not to the $1000 “family” figure.

    It makes perfect sense that the intent would have been to quote an all-inclusive average, of both group and non-group policies, or even to use group-only averages as a proxy for both. There can exist no useful “average” for existing individually-underwritten policies, for several reasons. First, the underwritten market is artificially thin because of competition from tax-subsidized forms of insurance. Second, non-group insurers only quote for lower-risk individuals and families. And third, even if high-risk individuals were offered coverage, the premiums would be so high that many wouldn’t be able to purchase it. So any average for underwritten policies would be greatly biased, and meaningless where public policy is concerned.

    As far as I can tell, the AHIP figures were for small-group coverage, which I would expect to be much cheaper that that offered to, say, UAW workers. Small businesses are under price pressure the same as individuals, and deductibles and co-pays have been trending upward for some time. So I believe the policies tallied by AHIP are indeed comparable to what an individual would purchase. The figures attributed to Kaiser may well have originated with AHIP, but that doesn’t make them “pure propaganda.”

  10. Linda Gorman says:

    The NPR article specifically states that “the average individual health plan costs about $400 a month.” The reporter is either confused about health insurance definitions, ignorant of the fact that people can purchase health insurance on their own, or pulling the common trick of using employer provided insurance premiums as a proxy for all insurance because its high cost makes the story fit the template. In any case, the story misleads.

    The 2007 AHIP individual market survey gives an average individual premium of $424 a month for people aged 60-64. That was the highest. The overall average was $2,613 a year, or $218 a month. On the low end, the 18-24 year olds paid an average of $113 a month. The survey is for policies sold in the individual market. As far as the AHIP can tell, an average of 89 percent of those who applied were offered coverage. No one knows how much pre-screening was done. The policies include all comprehensive plans that are guaranteed renewable and HIPAA compliant.

    The 2008 AHIP census for HSA plans reportes that the average annual premium for large group employer provided HSA qualified HDHPs was $3,185, $265 a month, still considerably below the premium quoted in the story.

    The Kaiser survey draws its sample from Dun & Bradstreet. It gets about a 50% response rate to the survey it sends out. The final sample is around 2,000 responding firms–ok for a homogeneous sample, not great for a heterogeneous one. The sample is very heavily weighted in favor of larger firms. Of the 2,122 firms that responded to the survey in 2006, 324 had over 5,000 workers and 188 had 3-9 workers. This is very different than the actual firm size distrubution in the US, Kaiser uses survey weights to correct for it.

    Still, when one considers that the establishment size census from BLS shows that in 2005 there were 6,306,056 establishments with fewer than 10 workers and 5,437 establishments with 1,000 or more workers, one can see that Kaiser samples more than 5 percent of large firms and less than .003 percent of small ones.

    Are these data solid enough to give an overall view of the health insurance market? Probably not.