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Confusion over buying health insurance

CriticalThought

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I am embarrassingly confused about the process for buying health insurance. Here is my issue...

My employer offers plans through which they contribute $200 a month and through them I get to choose between 3 plans with varying levels of coverage which also vary in the amount I would contribute.

I went online and checked to see how much a comparable insurance plan would cost if I paid for it on my own.

This is where it gets confusing. I would actually pay LESS for a comparable plan on my own. A comparable plan to the top plan my employer offers would be about $230 a month but if I went with my employer's top plan it would be a $250 monthly contribution from me plus their $200 contribution for a total of $450. How is that possible? Why would a similar plan cost me only $230 a month but I would have to pay $20 more and my employer would have to fork over $200 if I went with their option?

I'm trying to figure out if I am missing something. Do employers usually pay this much more? Is there some sort of vital coverage that I am missing? It should not cost more that twice as much to be insured by your employer.
 

Fisher

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I am embarrassingly confused about the process for buying health insurance. Here is my issue...

My employer offers plans through which they contribute $200 a month and through them I get to choose between 3 plans with varying levels of coverage which also vary in the amount I would contribute.

I went online and checked to see how much a comparable insurance plan would cost if I paid for it on my own.

This is where it gets confusing. I would actually pay LESS for a comparable plan on my own. A comparable plan to the top plan my employer offers would be about $230 a month but if I went with my employer's top plan it would be a $250 monthly contribution from me plus their $200 contribution for a total of $450. How is that possible? Why would a similar plan cost me only $230 a month but I would have to pay $20 more and my employer would have to fork over $200 if I went with their option?

I'm trying to figure out if I am missing something. Do employers usually pay this much more? Is there some sort of vital coverage that I am missing? It should not cost more that twice as much to be insured by your employer.
Because there are high risk individuals in your company insurance pool that get the whole group rated (i.e. raped on their premiums)--things like smoking, obesity, age, heart conditions, prior illnesses/injuries of others work against you in the premium department.
 

Carjosse

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How many of your co-workers are prone to falling off ladders?
 

CriticalThought

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Because there are high risk individuals in your company insurance pool that get the whole group rated (i.e. raped on their premiums)--things like smoking, obesity, age, heart conditions, prior illnesses/injuries of others work against you in the premium department.
So what you are saying is that my company hands over demographic information about myself and my coworkers and the insurance company looks up things like past claims and shoots us back the numbers?

The reason this concerns me is because I work for a private for-profit company contracted by the state and they have had some practices in the past that were a little iffy and I am concerned this might be another one.
 

Fisher

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So what you are saying is that my company hands over demographic information about myself and my coworkers and the insurance company looks up things like past claims and shoots us back the numbers?

The reason this concerns me is because I work for a private for-profit company contracted by the state and they have had some practices in the past that were a little iffy and I am concerned this might be another one.
Yes, you would have to be paying more because someone in your group has had cancer or a heart attack whereas in your private policy it is more based on your risk in relation to all their insureds. It is why the government is concerned young people will pay the penalty instead of getting insurance--insurance companies need young healthy people to be paying for coverage they won't use to offset the cost of other people who use more coverage than they are paying for. It is shared risk.

That said, it may not be your company--it may be your insurance. I posted on another thread about this. I know a small business whose employees premium were really high because supposedly of a rated employee, but HIPPA supposedly kept them from disclosing who that was. The company just dropped the group plan and they all got private policies with the same insurer and it was cheaper combined for them than it was when they were in a group policy and nobody was rated individually. They were then told it may have been related to a prior employee but again HIPPA prevented them from disclosing that i.e. the insurer got caught red-handed and were making excuses for robbing the group.
 

Fisher

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So what you are saying is that my company hands over demographic information about myself and my coworkers and the insurance company looks up things like past claims and shoots us back the numbers?

The reason this concerns me is because I work for a private for-profit company contracted by the state and they have had some practices in the past that were a little iffy and I am concerned this might be another one.

BTW, are you sure you can get an individual policy if there is employer coverage available? I know my policy is only available to me if I do not have group coverage available (I have a high deductible HSA policy)
 

CriticalThought

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Yes, you would have to be paying more because someone in your group has had cancer or a heart attack whereas in your private policy it is more based on your risk in relation to all their insureds. It is why the government is concerned young people will pay the penalty instead of getting insurance--insurance companies need young healthy people to be paying for coverage they won't use to offset the cost of other people who use more coverage than they are paying for. It is shared risk.

That said, it may not be your company--it may be your insurance. I posted on another thread about this. I know a small business whose employees premium were really high because supposedly of a rated employee, but HIPPA supposedly kept them from disclosing who that was. The company just dropped the group plan and they all got private policies with the same insurer and it was cheaper combined for them than it was when they were in a group policy and nobody was rated individually. They were then told it may have been related to a prior employee but again HIPPA prevented them from disclosing that i.e. the insurer got caught red-handed and were making excuses for robbing the group.
We do have one employee in my company who does have a lot of health problems and she has been at the company a lot longer than I have. I am also the youngest person at my company. I imagine those two factors could be the reason for the disparity. I think I will go with my own plan.

One other question you might know that I wanted to bring up to my boss. I heard somewhere that the Affordable Care Act will require that employers offer plans that limit the maximum out of pocket to $6500 and two of the plans my employer offers are maximum out of pocket for $10,000 whereas the third is for $5000. If the $6500 claim is true, will my coworkers who enroll into the 10K plans be forced into the exchanges in a few months? And does anyone yet know whether the exchanges will require my coworkers to pay more?
 

CriticalThought

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BTW, are you sure you can get an individual policy if there is employer coverage available? I know my policy is only available to me if I do not have group coverage available (I have a high deductible HSA policy)
I believe I can. I won't get any employer contribution, and it will be paid for entirely by me. Why would having the option of a group plan at my work inhibit me from going to a different insurance company and buying health insurance on my own?
 

Fisher

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We do have one employee in my company who does have a lot of health problems and she has been at the company a lot longer than I have. I am also the youngest person at my company. I imagine those two factors could be the reason for the disparity. I think I will go with my own plan.

One other question you might know that I wanted to bring up to my boss. I heard somewhere that the Affordable Care Act will require that employers offer plans that limit the maximum out of pocket to $6500 and two of the plans my employer offers are maximum out of pocket for $10,000 whereas the third is for $5000. If the $6500 claim is true, will my coworkers who enroll into the 10K plans be forced into the exchanges in a few months? And does anyone yet know whether the exchanges will require my coworkers to pay more?
My understanding is that sick people and healthy people will have to pay the same comparable to other other factors like age. The sickly person is probably already paying more if you are the youngest because of the age steps in premiums. I understand at 40 and 50 they start to rob you blind because you are then likely to use a lot more medical services than in the younger brackets.

I believe I can. I won't get any employer contribution, and it will be paid for entirely by me. Why would having the option of a group plan at my work inhibit me from going to a different insurance company and buying health insurance on my own?
I am just saying that it is that way. It was very clearly stated on my app and asked if I had other insurance available to me from work. It is all about the money. You need to find out for sure before your enrollment period on the company policy deadline closes for the year.
 

CriticalThought

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I am just saying that it is that way. It was very clearly stated on my app and asked if I had other insurance available to me from work. It is all about the money. You need to find out for sure before your enrollment period on the company policy deadline closes for the year.
I will certainly look into it. It seems odd that a competing insurance company would care if another insurance company offers me insurance through my employer. Or did you mean that your employer made that a term of your employment?
 

Fisher

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I will certainly look into it. It seems odd that a competing insurance company would care if another insurance company offers me insurance through my employer. Or did you mean that your employer made that a term of your employment?
I own my company. Insurance is state regulated so it may be different in your state. If I had insurance available to me otherwise through work, I could not have purchased my policy. I would have had to buy through my employer. I do not know if that was the insurance company rule or a state rule.
 

CriticalThought

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I own my company. Insurance is state regulated so it may be different in your state. If I had insurance available to me otherwise through work, I could not have purchased my policy. I would have had to buy through my employer. I do not know if that was the insurance company rule or a state rule.
Ah, I live in Florida. The insurance regulation in this state is terrible. They allow the companies to cherry pick the healthy populations, which now that I think about it may be yet another reason why I may be able to get a more affordable policy. But I better check on what you are saying just in case. I suspect if I do get an individual plan that I may see my rates go up in 2014. Now that I am getting a better picture of this whole mess, I'm starting to realize all of this is a gamble that millions of other Americans are probably facing with no clear idea of how any of these kinds of choices will pan out.
 

Fisher

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Ah, I live in Florida. The insurance regulation in this state is terrible. They allow the companies to cherry pick the healthy populations, which now that I think about it may be yet another reason why I may be able to get a more affordable policy. But I better check on what you are saying just in case. I suspect if I do get an individual plan that I may see my rates go up in 2014. Now that I am getting a better picture of this whole mess, I'm starting to realize all of this is a gamble that millions of other Americans are probably facing with no clear idea of how any of these kinds of choices will pan out.
My agent doesn't even know. I was told "Well we won't find out for certain until October, so call me in November or December." What I have read is that a lot of people who think they are going to now be getting a great policy will end up on Medicaid instead, which doctors do not like to take. Time will tell. I am convinced the folks in Washington don't even know yet what kind of monster they are creating--"Keep sewing on parts because it is going to be alive January 1 regardless of how many limbs it is missing or how many extra ears it has."
 

CriticalThought

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I think I might have this figured out.

Compared to individual insurance, employer based insurance has been traditionally more expensive because it has mandated benefits and it must be guaranteed issue. No one who works in a group can be turned down for health insurance, even if they’ve had cancer or any other serious disease. In Florida, I could easily buy an individual policy for $250 per month in premiums, but I cannot get pregnancy coverage and the insurance company can deny coverage if I’m not a good risk for them. My current group policy costs about $500 per month with the same deductible, but I’m guaranteed coverage and have great pregnancy benefits. The bad news for me? At age 48, I am past my pregnancy prime but don’t have the choice to turn that coverage down.
Obamacare Is Around The Corner - Where Will You Buy Health Insurance And What Will It Cost? - Forbes

So apparently employers do pay more than I can get on my own.

My next fear is how an individual plan would affect me when we jump over to Obamacare in 2014.
 

Green Balls

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Considering that Florida has the random sinkhole issue going on, you probably expect insurance rates to jack up from that too.
 

MMC

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I own my company. Insurance is state regulated so it may be different in your state. If I had insurance available to me otherwise through work, I could not have purchased my policy. I would have had to buy through my employer. I do not know if that was the insurance company rule or a state rule.



;)......:lol:
 

Fisher

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JumpinJack

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I don't mean to doubt you, but I have been looking at individual policies recently, and there is no way I can buy an individual policy for LESS than what my employer pays. At best, it's about the same. Altho I'm not sure exactly how much my policy costs...I pay $100, employer I THINK pays maybe $200-$300. It's a good UHC plan. A comparable plan from UHC for an individual would be over $400/month.

What state do you live in? I'm in Texas. I don't know if the rates are higher or lower here than the nat'l avg.

But here's a thought: You may get a break in an individual policy because of your age and health and gender. A break that I don't get. I'm healthy, but older. So I would have to pay more than you for the same policy. I'm also female, whereas you are male, which means I would have to pay more than you for the same policy.

When you're grouped with others, it's like all your stats are averaged, so you might end up paying more than on the open market, or you might end up paying less.

Group policies are marketed to companies, and they will go by claims amounts in the past for that company to base their bid on.

My company a few years back had a few people with very serious illnesses (one died of AIDS, two died of brain tumors, one survived a brain tumor). It's no surprise our rates jumped a lot during those years.
 

FederalRepublic

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I am embarrassingly confused about the process for buying health insurance. Here is my issue...

My employer offers plans through which they contribute $200 a month and through them I get to choose between 3 plans with varying levels of coverage which also vary in the amount I would contribute.

I went online and checked to see how much a comparable insurance plan would cost if I paid for it on my own.

This is where it gets confusing. I would actually pay LESS for a comparable plan on my own. A comparable plan to the top plan my employer offers would be about $230 a month but if I went with my employer's top plan it would be a $250 monthly contribution from me plus their $200 contribution for a total of $450. How is that possible? Why would a similar plan cost me only $230 a month but I would have to pay $20 more and my employer would have to fork over $200 if I went with their option?

I'm trying to figure out if I am missing something. Do employers usually pay this much more? Is there some sort of vital coverage that I am missing? It should not cost more that twice as much to be insured by your employer.
What did I tell you?
 

FederalRepublic

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Yes, you would have to be paying more because someone in your group has had cancer or a heart attack whereas in your private policy it is more based on your risk in relation to all their insureds. It is why the government is concerned young people will pay the penalty instead of getting insurance--insurance companies need young healthy people to be paying for coverage they won't use to offset the cost of other people who use more coverage than they are paying for. It is shared risk.

That said, it may not be your company--it may be your insurance. I posted on another thread about this. I know a small business whose employees premium were really high because supposedly of a rated employee, but HIPPA supposedly kept them from disclosing who that was. The company just dropped the group plan and they all got private policies with the same insurer and it was cheaper combined for them than it was when they were in a group policy and nobody was rated individually. They were then told it may have been related to a prior employee but again HIPPA prevented them from disclosing that i.e. the insurer got caught red-handed and were making excuses for robbing the group.
I have my own insurance with the same company as my employers group. My company would pay half, and my half would be considerably more than what I'm paying now (nearly 50%).
 

JumpinJack

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Obamacare 2014. My understanding is that most states will have those state-run exchanges. The working class level of income will now get subsidized and be able to get some sort of insurance, compared with nothing before. So that's good. Even lower middle class might be able to get some subsidy, based on a sliding rule for subsidies, so they will be able to better afford coverage, unlike before. So that's good. People with pre-existing conditions can get health care, so that's good, too. But nothing's free. Those things cost.

I live in TX, which will not have state run exchanges. So individuals will have to buy privately, just like before Obamacare, or use the federal-run exchange which will offer I think limited plans through the fed govt.

Costs could go up OR down, so I'm taking a wait and see attitude. They could go down because Obamacare has caps on premiums now (a % of amount paid for claims). But there are required coverages (birth control pills, maternity), so for people who wouldn't need those, costs may go up on the private/exchange market. For women, costs may go down, because women were charged more before 2014 just for being female (even though birth control wasn't covered, but viagra was). But if you're an older woman, costs could go up, because you can still be charged more based on age.

So it could go either way. I suspect for healthy 35 year old males, costs could go up, because they were given price breaks before that they won't now be given. But that's just a guess.

Just like before, though, here in my state, I believe that you cannot buy on the private or exchange market if you get some sort of policy through your employer.

The reason for the required coverages in the policies, though....I understand the reasoning, although the end result is unfair to some. The reason is that some insurance companies were selling policies with limited coverage to people who thought they had comprehensive coverage...and they were charging comprehensive rates. Insurance is complicated, so some people just don't understand what they're getting. This may be one of those things that gets tweaked later...allowing the selling of some policies w/o maternity or whatever.

This is a new program, and health insurance is pretty complex. So this is a program in progress that will need tweaking in future years, I believe. It will never be perfect, but I hope it helps some people without hurting others. Because something definitely needed to be done. Health and insurance costs were spiraling out of control and crippling our economy. Billions of dollars were being sucked out of our economy, going to ins. cos., who hired special employees to find ways not to pay claims (now there's a requirement to refund premiums if amount of claims paid isn't at least 80-85% of premiums). And millions unable to get health insurance were sucking money out of our economy in emergency rooms because they hadn't been able to afford preventive care or medications.
 

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I believe I can. I won't get any employer contribution, and it will be paid for entirely by me. Why would having the option of a group plan at my work inhibit me from going to a different insurance company and buying health insurance on my own?
don't forget to look at your deductible when pricing plans..... those cheap plans usually come with a high deductible and cover less of a percentage.

right now, I can get a plan for 120 bucks a month online... if i wanted a $7500 deductible, 70% coverage,$30 co-pay, and 30% coinsurance and nothing in the way of "freebies" ( free checkup, etc).


but good luck getting answers.... everyone is in the dark about how this is all gonna pan out, even the people who are charged with sorting it all out.
 

winston53660

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Obamacare 2014. My understanding is that most states will have those state-run exchanges. The working class level of income will now get subsidized and be able to get some sort of insurance, compared with nothing before. So that's good. Even lower middle class might be able to get some subsidy, based on a sliding rule for subsidies, so they will be able to better afford coverage, unlike before. So that's good. People with pre-existing conditions can get health care, so that's good, too. But nothing's free. Those things cost.

I live in TX, which will not have state run exchanges. So individuals will have to buy privately, just like before Obamacare, or use the federal-run exchange which will offer I think limited plans through the fed govt.

Costs could go up OR down, so I'm taking a wait and see attitude. They could go down because Obamacare has caps on premiums now (a % of amount paid for claims). But there are required coverages (birth control pills, maternity), so for people who wouldn't need those, costs may go up on the private/exchange market. For women, costs may go down, because women were charged more before 2014 just for being female (even though birth control wasn't covered, but viagra was). But if you're an older woman, costs could go up, because you can still be charged more based on age.

So it could go either way. I suspect for healthy 35 year old males, costs could go up, because they were given price breaks before that they won't now be given. But that's just a guess.

Just like before, though, here in my state, I believe that you cannot buy on the private or exchange market if you get some sort of policy through your employer.

The reason for the required coverages in the policies, though....I understand the reasoning, although the end result is unfair to some. The reason is that some insurance companies were selling policies with limited coverage to people who thought they had comprehensive coverage...and they were charging comprehensive rates. Insurance is complicated, so some people just don't understand what they're getting. This may be one of those things that gets tweaked later...allowing the selling of some policies w/o maternity or whatever.

This is a new program, and health insurance is pretty complex. So this is a program in progress that will need tweaking in future years, I believe. It will never be perfect, but I hope it helps some people without hurting others. Because something definitely needed to be done. Health and insurance costs were spiraling out of control and crippling our economy. Billions of dollars were being sucked out of our economy, going to ins. cos., who hired special employees to find ways not to pay claims (now there's a requirement to refund premiums if amount of claims paid isn't at least 80-85% of premiums). And millions unable to get health insurance were sucking money out of our economy in emergency rooms because they hadn't been able to afford preventive care or medications.

Hey Jack I'm in Dallas too. You can go here and sign up for a notification for when our fed exchange opens:

https://www.healthcare.gov/
 

Mr X

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lol. The US health system is retarded.
 

CriticalThought

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I gave up and went with my employer's insurance. It has a 10K deductible and a maximum out of pocket of 10K. I figure it is better than nothing. Thanks to those who offered input.
 
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