Understanding your premium increase- an almost impossible task

October 3, 2011 in Member Stories

I attempted to find out why my health care premium, purchased through Connector Commonwealth Choice, increased by 30+ percent after one year.

I learned:

  • There is no simple way to get the answer. Customer service employees at Blue Cross Blue Shield of MA (my carrier), The Connector and the Department of Insurance are not trained to answer specific customer questions about rate increases. I believe that is intentional. It leaves all three organizations unaccountable for what is a very complicated, inconsistent and sometimes difficult to defend set of calculations. Ask two senior staff members at BCBS the same question about your premium and you will get two different answers.
  • There is no transparency in the system. The rating factors that carriers use to determine an individual’s premium (and subsequent increases) is not public information, not what the factors are (for example age, where you live, plan usage) or how much a person’s premium can be increased because of any given factor. According to the manager of member services at BCBS, the DOI approves both the rating factors and the percentage “range” a carrier can increase a premium due to any given rating factor. (The DOI disputes this, maintaining that maximum range increases are limited by the law, not set by the DOI.) The single biggest rating factor seems to be age. The DOI (if you go with BCBS’s version of events) gave BCBS of MA approval to increase an individual’s premium up to 15 percent in a given year for age. I received the full 15 percent increase.
  • Base rate increases, a phrase commonly written about in the media, talked about by politicians and referred to by carriers, are misleading indicators of how much health insurance costs are really going up (or being “contained”, as they like to say). Carriers claim that they held base rate increases to below 10 percent this year but what they are technically referring to is an average. Unfortunately I did not fall into the group of people who received the well-publicized base rate increase of under 10 percent. Mine went up by 15 percent.

I believe:

  • Healthcare costs would come down more quickly if there was more transparency in the system. Without that, carriers can continue to mismanage and overcharge. An example of that is Wellness Programs. The DOI (no angel in this mess) has approved discounts for programs like smoking cessation. But not a single carrier has taken advantage of offering those discounts to customers (Nor has the DOI mandated that they do it.), because, according to the DOI, carriers find it “difficult to verify adherence.” Unbelievable!
  • The media could do a better job of reporting on more of the particularly egregious problems/areas of confusion in the system, like the fact that the rating factors that determine how premiums are calculated is not public information, like the fact that a Massachusetts Health Connector customer looking for an explanation of his or her premium increase can’t get an answer, like the fact that these “average increases” being reported for carriers don’t truly reflect what most subscribers see. I think journalists should be pushing back harder on these corporate communications people like Jay McQuaide at BCBS who tells one journalist medical costs are coming down and that’s why we are seeing average rate increases coming down and a few months later tells another journalist medical costs are going up. Which is it? And exactly who are these people who saw their premiums come down?

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