eHealthinsurance is out with its annual report of what premiums are in different cities and they’re still comparing the price of rotten month old apples with sweet juicy, juicy mangoes. And amazingly enough they’re different. Basically some states ban underwriting and therefore have insurance which is more expensive. So what I said last year when they said that prices were going down still applies—
On further review there are more questions than answers. Who got insurance? Was this group more underwritten (i.e. healthier) than the previous year? And what benefits were they getting compared to last year? And were there changes in deductibles, co-pays and out of pocket maximums?
Just saying that the premium went down is a bit like saying the average price of a BMW 3 series is less this year on average because more people are buying them without the fully loaded options. And if it’s really true that apples for apples the premiums went down why didn’t eHealthinsurance.com put that information in the report?
Although last year apparently “prices went down” and this year they didn’t say that, so it’s pretty damn likely that if you compared apples to apples of the stripped-down underwritten plans they’re looking at, prices went up.
Of course in practical terms this report is useless. I’m a great example in that I applied for two identical policies from different carriers on eHealthinsurance—both quotes about $100 a month for a $2500 deductible plan. But when the underwriting was done, one was still $100 a month and the other wouldn’t take me at all and suggested I went in the guaranteed issue pool at $400 a month for a $4000 deductible. So quoting price without knowing what the individuals concerned need to go through to get the insurance and therefore knowing the actual price is useless.
I do note one little thing in their report. They say that St Louis Missouri has the cheapest children’s insurance premiums ($29 a month) and yet there are 119,000 uninsured kids in Missouri. In other words very cheap—or even free given the numbers who don’t sign up for the SCHIP programs—isn’t cheap enough to get kids (and adults) insured. eHealthinsurance seems to be surprised about this.
The only logical conclusion is that health insurance needs to be compulsory and automatic (although not of course free to those who can afford it). And in fact even eHealthinsurance could do OK in such a system, although the logical ramifications of it would be horrendous for many of the plans they broker for.
It doesn’t seem to me that $1348 per year for insurance ($29 per month + $1000 deductible) per child is cheap. That doesn’t even include the 20% copay. I’m not even sure who the market is for kid’s insurance like this. It’s people with (or without jobs) that don’t have access to better group insurance AND who don’t qualify for SCHIP AND who are not able to afford family insurance AND who think that the insurance quoted above is a good deal. (I would probably not insure my child at these “cheap” prices if I fit the profile above.) That seems like slicing the market pretty thin.