The LAT reports, Anthem Blue Cross dramatically raising rates for Californians with individual health policies:
Anthem Blue Cross is telling many of its approximately 800,000 customers who buy individual coverage — people not covered by group rates — that its prices will go up March 1 and may be adjusted "more frequently" than its typical yearly increases.
The insurer declined to say how high it is increasing rates. But brokers who sell these policies say they are fielding numerous calls from customers incensed over premium increases of 30% to 39%, saying they come on the heels of similar jumps last year.
[…]
Individual policies are often the only option for those who are uninsured, self-employed or do not receive health coverage through employers.
The story struck we as noteworthy, because it underscores the odd system of paying for health care we have in the U.S.: most people on employer-based policies, many buying their own, others with government-provided insurance, and yet other uninsured altogether. And, depending on which group on is in, the pricing structure for services can be substantially different (whether it be for insurance itself, as in the article, or the cost of a specific service if one is uninsured).
Sphere: Related Content
February 5th, 2024 at 4:20 pm
it underscores the odd system of paying for health care we have in the U.S
If we think of the fact that health care is treated as a commodity in the US, then this practice doesn’t seem so odd.
Other products–like hotel rooms or airline seats–have variable pricing where bulk purchasers are given price breaks.
Rewards cards and their ilk are also examples of flexible pricing. Sellers neogotiate based on demand and supply and hence, it makes perfect sense that large institutions can get preferable rates from the insurers since they are purchasing more as a group.
Since health care is a commodity, it would actually be odd if the companies DIDN’T negotiate in their interest.
February 5th, 2024 at 5:46 pm
I agree that it makes sense to negotiate prices in bulk. By “odd system I mean the pretending like its a market when its not and specifically the multi-tiered system: government-provided for some, job-provided for others, self-provided for other and not provided for yet others. And the compensation for the given service depends on which category you fall in (e.g., I pay one rate, the Medicare patient another, the guy who has no insurance yet another, and so forth).
February 8th, 2024 at 1:51 am
Now this part of the system is indeed broken. It’s not so much the amount we spend on health care that concerns me, but the fact that portions of the system appear almost designed to do the most amount of harm.
I have health insurance through my employer. Who knows what medical coverage my family is likely to need? My family. Who knows how my family ranks the importance of that medical coverage? My family. Who decides what the insurance will cover, and how the fees will be structured? My employer and the insurance company’s sales team. Who has the least amount of information to make that choice? My employer and the insurance company’s sales team.
Of course it gets worse. When I do go to a doctor, who knows what treatment I need? The doctor. Who knows how important that treatment is to me? I do. And who decides what treatments will be covered at what prices? The insurance company does its best to guess what I, my doctor and the insurance company would have decided if we had all sat down to a roundtable meeting.