Why Health Insurance Premiums are so Expensive
Monday, March 26, 2012
Not only are we brokers, but we are consumers of health insurance trying to find the best family health insurance plan. Since we are in good health, our ideal plan would contain:
1. $10,000 deductible
2. No prescription coverage
3. No coverage for in vitro fertilization
A plan like this is commonly referred to as a catastrophic health insurance plan. Our main concern is to limit our liability in the event of a major claim. This type of plan, however, would not meet the MCC standards, and would be subject to a penalty of $ 1,260.
MCC Highlights:
1. MCC dictates that annual deductibles can not exceed $2,000 for individuals and $4,000 for families. Our ideal $10,000 dollar deductible plan would be a violation and a fine of $1,260 would be imposed.
2. MCC says there can be no limits or caps on prescription drug benefits, although you can have a separate prescription deductible not to exceed $250 for individuals or $500 for families. Our ideal plan with no prescription benefits would once again be in violation.
3. MCC does not require in vitro fertilization so our ideal plan would be acceptable. The problem is that the State of Massachusetts Mandates in vitro fertilization in the 1-50 small group marketplace. So, once again, we would not be able to find a plan that removes this coverage. (Please note there are other companies like Assurant and TrustMark that do write self-insured plans in the 1-50 marketplace and exclude in vitro fertilization).
Ironically larger companies, who typically self insure, fall under the guidelines of the Department of Labor and are able to exclude mandates required for fully insured plans by the Division of Insurance. In other words employers with thousands of employees are able to exclude a state mandated benefit like in vitro fertilization through self insurance, small businesses, however, are not able to.
Our ideal plan would not meet MCC on both the deductible and prescription levels. Instead of buying a health insurance plan to tailor our needs, we end up buying a plan that has to meet MCC. The Legislature should review and lessen the requirements of MCC, versus spending time on co-ops and setting up insurance exchanges which do nothing to lower rates.
A plan without prescription coverage is estimated to cost 10% less then the same plan with prescription coverage. That is a material amount for all small businesses to take advantage of.
There are still resources for groups that may eliminate Prescription Drug Coverage. Take a look at Walmart, currently they have over 400 generic prescriptions that cost $4 for a 30 day supply or $10 for a 90 day mail order supply. Walmart does not require an insurance card, just a Prescription from your doctor.
In closing tell our State Legislators to focus on giving businesses more choices. Remove prescription coverage from MCC and provide an immediate 10% reduction in health insurance premiums for small businesses.
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