<p>I believe I posted about Blue Shield’s intended rate increase weeks ago. This really isn’t news. (Except to the extent a company doing exactly what it said it will do, when it said it would do it, might be “news”). I used the info to basically guestimate what my rates would be under the old plan that I had, if that plan had continued. So I think the discussion on this thread was something along the line of the problem of comparing apples to oranges (2013 insurance rates vs. 2014 insurance rates) … I was using the publicly available info to try more of an apples-to-apples comparison.</p>
<p>The news is the increases look like somewhere between excessive and unwarranted and nothing can be done about it.</p>
<p>Also…that is a heck of reserve. I am not sure what the reserve covers so I dont know if the reserve is out of this world or if this is another case of poor journalism. :)</p>
<p>These are the exact 9.8% (average) increases that were requested months ago. Whether they are “excessive” or “unwarranted” is an opinion (apparently based on the idea that health care expenses only increased 4% last year and that Blue Shield had to refund money last year to customers because of the 80% rule). </p>
<p>However, Blue Shield’s risk pool on the old policies are shrinking because of their grandfathered status. One incentive for people to stick with the older plans is desire to preserve access to a broader network – but that is significant mostly to people who plan to use those. So BS can reasonably anticipated that the grandfathered plans are going to to grow more costly because they are serving a smaller number of people, who are growing older and who have more expensive tastes in health care providers. </p>
<p>Also, the Blue Shield refunds last year were very small – I know that my refund was far less than a single month’s premium – so it’s not as if the policies have been wildly overpriced. If I were running a company, I’d rather be in the position of refunding money because we collected a little bit more money than we needed, then being caught short because we were collecting less.</p>
<p>Again, not news. (And as to the articles clicked – not journalism either. You do know that you are citing a press release from an advocacy organization, right? )</p>
<p>Well, I guess I am one of the 20%. I have no intention of buying one of these ACA-compliant plans in the individual market.</p>
<p>A 9.8% increase in the grandfathered plans is heck of a lot better than the 50 to 100% increase many of the subscribers are getting who lost their grandfathered status. You would have to be nuts (if you don’t qualify for subsidies) to voluntarily give up your grandfathered plan.</p>
<p>Calmom, I could have picked another link. The story was also on KCBS or KGO.</p>
<p>Here is another link.</p>
<p>[LA</a> Times](<a href=“http://touch.latimes.com/#section/-1/article/p2p-78805543/]LA”>http://touch.latimes.com/#section/-1/article/p2p-78805543/)</p>
<p>The story comes from state regulators.</p>
<p><a href=“http://www.kgoradio.com/common/page.php?pt=Blue+Shield+Called+Out+for+Excessive+Rate+Hikes&id=62983&is_corp=0[/url]”>http://www.kgoradio.com/common/page.php?pt=Blue+Shield+Called+Out+for+Excessive+Rate+Hikes&id=62983&is_corp=0</a></p>
<p>Dstark, how can you be trusted for reliable information sources? We all know you’re such an ultra conservative.
:D</p>
<p>:)…</p>
<p>I wish you had posted to the LA Times article in the first place. </p>
<p>I’m tired of reading right-wing propaganda. I’m tired of reading left-wing propaganda. </p>
<p>I prefer to read my news from sources that practice real journalism – you know, the kind where facts are presented objectively with an attempt to explore multiple perspectives on an issues and to give some background. The LA Times article passes that test --the other links don’t.</p>
<p>Well…I would have posted the LA Times link but the LA Times is annoying because they ask the reader to subscribe or sign up or whatever. </p>
<p>Calmom, I dont like the politics either. I try not to post political links. This story was mentioned in multiple places and the link I posted was what I saw first.</p>
<p>I have questions about the story. </p>
<p>“Blue Shield of California has amassed a total net worth of $3.86 billion. At the end of 2012, Blue Shield of California had excess surplus of about
$3.39 billion – an amount that is 1561% more than the state requires.”</p>
<p>Is the above really true?</p>
<p>And it looks to me that most of BS’s income is derived from investments. If the surplus is cut, investment income decreases.</p>
<p>Also, why are general and adminstrative expenses rising so much compared to Net Premiums?</p>
<p><a href=“https://www.blueshieldca.com/bsca/about-blue-shield/corporate/financials.sp[/url]”>https://www.blueshieldca.com/bsca/about-blue-shield/corporate/financials.sp</a></p>
<p>Those general and administrative expenses include the multimillion dollar salaries by the top executives of this so-called non-profit. Non-profit in this case means absolutely nothing.</p>
<p>“I dont like the politics either.”</p>
<p>Yeah, you’re both apolitical. :)</p>
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</p>
<p>You can ask that question in reverse: why aren’t premium levels keeping pace with rising general and administrative expenses? If you ask it that way, that’s would support an argument in favor of raising premiums - though Blue Shield ultimately is bound by the 80% rule.</p>
<p>I really don’t know how much the various ACA reforms have impacted administrative costs. I would assume that the actuarial work required to develop ACA-compliant policies and the administrative and legal paperwork necessary to participate in Covered California has been a significant cost over the past few years. Percentage-wise, I don’t know – maybe there’s someone else on CC who has more insight into the process. (I’m envisioning a whole slew of actuaries, accountants, health benefit administrators, lawyers…)</p>
<p><a href=“I’m%20envisioning%20a%20whole%20slew%20of%20actuaries,%20accountants,%20health%20benefit%20administrators,%20lawyers…”>quote</a>
[/quote]
</p>
<p>I work in Accounting/Financial Reporting for one of the major health insurers. You wouldn’t believe the impact, on all of the categories above, and the some. It’s been going on for a few years and feels like it’s never ending. And yes, PPACA has created many new administrative costs.</p>
<p>Justamom,
Do you know how payment of the subsidies to the insurance co works? Does the insurance co get paid the subsidy only <em>after</em> the subscriber pays his share of the premium each month?</p>
<p>If you’re talking about the Cost Share Reduction, from what I can gather (I’m more on the reporting end, not on the recording side), it looks to me like HHS pays monthly based on membership, not paid premium.</p>
<p>^ and presumably has a way to recoup monies paid for policies that are ineligible, for one reason or another. (Before we go off thinking this will be a one-way shoveling into insurers’ coffers.)</p>
<p>Calmom, premium increases and medical expenses are tracking at similar rates over two years. </p>
<p>The outlier is general and administrative expenses. </p>
<p>JustaMom5465, that is cool that you work for Accounting/Financial Reporting in a major health insurance. </p>
<p>[Thousands</a> Of Consumers Get Insurance Cancellation Notices Due To Health Law Changes - Kaiser Health News](<a href=“http://www.kaiserhealthnews.org/stories/2013/october/21/cancellation-notices-health-insurance.aspx]Thousands”>Thousands Of Consumers Get Insurance Cancellation Notices Due To Health Law Changes | KFF Health News)</p>
<p>Blue Shield has about 200,000 individual policy holders in California. That is somewhere around 7 percent of who Blue Shield covers in California. (Blue Shield doesnt underwrite everybody they cover). </p>
<p>Are general and administrative expenses higher in the individual market compared to the employer market? I am talking pre and after ACA passed. </p>
<p>Is ACA impacting the expense side of small and big employer policies in a big way?</p>
<p>
</p>
<p>Well, that certainly seems like it could be a wasteful, time-consuming process which would add to administrative overhead I presume. Gov’t pays insurer based on “membership,” (not sure I know what that means, exactly), then after insurer discovers that subscriber isn’t going to pay premium (is it a 3-month grace period?), it credits gov’t back for subsidies already received. Someone is going to have to audit all this, as well, which adds more costs.</p>
<p>Yes, there is a periodic reconciliation process to true up the $ received.</p>
<p>Fear not, there are more controls around this than I care to think about. You can’t just recognize revenue 'cuz $$ comes in the door. It all has to be accounted for (hence:accounting)</p>
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</p>
<p>Retail vs. wholesale. They’ve got to be higher in the individual market. And that’s why the MLR rule is 80/20 in the individual market and 85/15 in the group market: because individual sales cost more.</p>