TOPDOG08.COM

« Braveheart it's not | Main | Copyright Tool Will Scan Web For Violations »

December 12, 2006

Health insurance costs top median income

$44,000 is higher than the median national income!

Real median household income remained unchanged between 2002 and 2003 at $43,318, according to a report released today by the U.S. Census Bureau. At the same time, the nation’s official poverty rate rose from 12.1 percent in 2002 to 12.5 percent in 2003. The number of people with health insurance increased by 1.0 million to 243.3 million between 2002 and 2003, and the number without such coverage rose by 1.4 million to 45.0 million. The percentage of the nation’s population without coverage grew from 15.2 percent in 2002 to 15.6 percent in 2003.

$44,000 a year for health insurance?

By Julie Appleby, USA TODAY

Wed Dec 6, 6:59 AM ET

Hundreds of entertainment industry workers in California and New Jersey who buy health insurance as a group are being hit with a rate increase that will raise some family-plan premiums to more than $44,000 a year.

Insurer Cigna will raise rates for members of the group, which includes some in the Screen Actors Guild, an average of 82% in California and 65% in New Jersey next year.

Under the new rates, the most expensive plan in California will cost a family $3,685 a month, $44,220 a year. Less-expensive HMO plans will cost families $24,624. In New Jersey, an HMO will cost $10,260 a year for a single person and $30,372 for a family.

The rates illustrate the tremendous range of price increases that can hit a business, association or individual, even when the average national premium increase is just over 6%.

"Sadly, this happens to medium-sized businesses all the time, but they don't make the news," says Peter Lee, head of the Pacific Business Group on Health, a coalition of large employers.

Affected by the Cigna rate increase are about 1,100 members of 30 different guilds and associations who buy insurance through the Entertainment Industry Group Insurance Trust, a Clifton Park, N.Y.-based multiple-employer insurance broker. The trust offers the group insurance policies to association members, a mix of small businesses and sole proprietors.

"It seems very clear that the aim of such a large increase is not to get more money out of us, but to eliminate us," says Steve Rosen in Los Angeles, whose wife, Victoria, gets coverage through the program.

Cigna spokeswoman Gwyn Dilday says the insurer recently discovered it had been charging the group incorrectly for the past 10 years. She says the rate increase is needed because the group's costs are double that of similar-size groups, and Cigna has lost money on it during the past few years.

"These rates that we're offering are market competitive," Dilday says.

Health insurers are generally free to set prices as high as the market allows, although most states limit increases for policies covering small groups, those of two to 50 people. There are no limits for larger groups.

"This shows there are inadequate mechanisms in place around the country to review rate increases and protect the public from extreme rate increases," says Drew Altman, head of the Kaiser Family Foundation, a non-partisan research group. The average cost nationally for a family plan offered by employers was $11,480 this year, the foundation says.

State regulators concluded that the trust members do not qualify under the state's small-group rules, says Denise Schmidt, spokeswoman for the California Department of Managed Health Care. Nor does the increase appear aimed solely at causing members to terminate their policies, she says.

"In looking at those rates, they don't appear to be outside the norm, given the average age of the group, the (generous) benefit structure and the group's claims history," Schmidt says.

David Rubin, who along with his wife, Alice, oversees the trust, says many members won't be able to afford the policies. "We are getting people who are dropping out, and we're getting people who are telling me they wish they could drop out but know they cannot get (other) insurance," Rubin says.

Siri Feeney, a children's textbook artist in Ventura, Calif., says her $425-a-month rate is set to nearly double: "This is really hard for me. Some years, I only make that much a month."

Posted by Mike at December 12, 2006 11:28 AM

Trackback Pings

TrackBack URL for this entry:
http://www.topdog08.com/cgi-bin/mt-trackback.cgi/1012

Comments

Post a comment