Thursday, October 14, 2010

The (Premium) Stuff is Hitting the Fan

Many companies are on calendar year contracts for health insurance. New quotes are often delivered in October, decisions to keep or switch policies are made, and an open enrollment period (sign ups for new coverage and changed coverage) takes place in November so paperwork can be in place by January 1.

It is no secret premiums are going up, and some are going to way, way up. This will likely induce recession-battered employers to pass more costs on to employees, effectively a cut in net pay for employees. The memos will be passed through organizations in the next few weeks, and employers will have meetings with grumpy employees.

PPACA (Obamacare) requires more lives covered in the group and more services (especially preventative) covered by the plan. This plus the usual issues of utilization and cost are driving up premiums.

This was all very predictable.

Some day these changes may start to bend the cost curve, but probably not soon enough for President Obama.

Do not stand in front of the fan.

No comments: