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High State Group Health Insurance Costs

Sat, 01/22/2011 - 10:58am | thechampaignlife

According to https://nessie.uihr.uillinois.edu/cf/benefits/index.cfm?Item_ID=974&rlink=55, a family of 3 making just over $45k with Health Alliance HMO pays $187.50 per month for health insurance which isn't too bad.  However, looking at the state contribution amounts provided in the part-time employees cost section (used to determine how much of the state's cost a part-time employee must pay in addition to his or her own contribution) puts the state paying $1256.42 per month!  So the total cost is $1443.92 per month.  The highest cost plan available from myhealthalliance.org for that same family is just about $600.  Granted, there are some differences between the plans but am I missing something or is a group-discounted rate that is over twice the cost of the most expensive private plan ridiculous?  We could save $84M per year by switching all ~100,000 state employees to a health plan rate available to any old Joe off the street.

These are the places taxpayers want to see smart cuts with big benefit before agreeing to a tax increase.  Taxing state worker's retirements benefits would also help...

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bluegrass wrote on January 22, 2011 at 3:01 pm

It is impossible to compare

It is impossible to compare the the state group plan to pricing for individuals. When one purchases an individual plan, it is rated for male, female, age, nicotine use, health conditions, height, weight, and so on. Group plans don't rate for age, health conditions, nicotine, or anything else. A 60 year old 300 lb female smoker with diabetes pays the same as a 25 year old healthy male non-smoker.

If things aren't changed, in 2014 when insurance companies are required to take every person regardless of health conditions, all of these individual premiums are going to be raised to similar levels you see on the Health and Dental Rate tables from the website you linked. Not only that, the changes are going to drive many private plans right out of business, and force us to buy from one or two massive companies, or from the government. Which, of course, is exactly what the government wants. For proof, all one needs to do is look at individual plans for children. At this time, insurance companies have been told they cannot deny coverage to children based on their health conditions. So what did almost every single company do? They stopped selling individual plans for children.

Yatiri wrote on January 22, 2011 at 10:01 am

And how much does the

And how much does the employer pay Health Alliance?

Granted there are differences in the plans but you don't think that matters? Comparing oranges to apples here?

I just don't believe you can buy private insurance for a family of 3 for 187.50 a month. That is ridiculous and must be an error.

thechampaignlife wrote on January 22, 2011 at 3:01 pm

There is no employer portion

There is no employer portion for the $600 family plan I mentioned. Those are retail plans sold to individuals and families that don't have an employer that provides insurance. There are differences but they do not amount to a doubling of cost. You could easily compare the differences yourself (https://healthalliance.org/state_benefits.asp vs www.myhealthalliance.org) but there is an ~$400 family plan that is quite comparable except for a $3000 annual deductible. The most expensive prescriptions are $50 vs $48 in the state plan. Doctor visits are $20 vs $15 in the state plan. Emergency room is $175 vs $200 in state plan. I could go on but you get the idea and can check out all the details yourself if you like.

The $187.50 is how much a state employee making just over $45k pays out of their gross pay for a family of 3, not how much the plan would cost if the employee was buying it on their own (that was the $600 plan I referred to). The state pays an additional $1256.42. What I'm saying is that I as a state employee could continue paying my $187.50 and the state pay ~$212.50 (to total the $400 plan cost) per month for my plan and save over $1000 per month. They could even pay my deductible (max $3000 per year but likely much less on average) and save at least $9000 per year just on me. Multiply that by the roughly 100,000 state employees and that's over $90 million saved with minimal effort and with no significant loss of benefit.

Like I said, I'm probably missing something because this sounds so outrageous that I don't know how someone wouldn't have caught it before. I was hoping someone could point out a reason for the significantly higher cost my healthcare costs taxpayers than I could obtain myself. Perhaps the $400 family plan is for those without pre-existing conditions or smokers and the state's cost is far higher because smoking and pre-existing conditions are allowed (although the smokers part doesn't appear to be the case - PersonalCare has a checkbox in their quote pricing and it doesn't seem to increase costs that much and definitely not double)?

Yatiri wrote on January 24, 2011 at 7:01 am

I followed your links and

I followed your links and found that you are very mistaken in your figures. The 187.50 is not true, the cost i got was more like 800-900 for 2 children and wife, no pre existing conditions.

Which brings me to the topic of dissembling and lying. It really annoys me when political activists lie, when FOX news lies, when our government lies.

You gave false information in your writing to make a political point. Isn't honesty and truthfulness important in our public discourse anymore?

thechampaignlife wrote on January 24, 2011 at 9:01 am

I don't know how I can be any

I don't know how I can be any more clear. You seem to really be focusing on that $187.50 number as if I claimed that to be the total cost of my insurance, and you seem to indicate that you think I'm saying that is the cost of a potential alternative plan to the one I have through the state. As I said before, the $187.50 is how much I pay towards the cost of my family's current state health plan and the state pays the remaining $1256 such that combined we're paying over $1400 per month. You can view all this on the NESSIE link using the part-time employee information since it gives you the employee and state portions. The myhealthalliance.org link was given to show you that a competitive plan is available to a 3 person household for around $400 without any employer match. The other Health Alliance link was given to show that the plans aren't significantly different except for the deductible, at least in my opinion. I then went on the say that I must be missing something because at face value the state appeared to be overpaying.

I'm sorry if this is confusing you but I urge you to carefully read my posts and the relevantly linked authoritative sources before accusing me of deliberately lying. I have no hidden agenda and, as a state employee, any potential change in health plan (such as tossing around the idea that we taxpayers might pay less if us employees were on a retail plan) would likely negatively affect me, although by how much is somewhat subjective. Both Democrats and Republicans say we need to reduce state spending and I was asking if this might be an area where that is done without much harm. If I had an agenda, I'd say that we poor state employees deserve every expensive benefit we currently get (and woe is us for our expensive copays), Democrats are the devil because they increased our taxes and are wasting them by overpaying health premiums in sweetheart deals, or Republicans are the devil because they'll cut our benefits and wouldn't increase taxes to pay for more of us poor state employees' benefits and well deserved fat cat pensions. But I'm not saying that. I'm saying quite the opposite. I'm saying our state employee benefits are very generous and I could even see lowering them some. I see no party to blame if we are overpaying, feel we have to cut more in costs, and feel the tax increase was necessary. If you call me wanting to cut state expenses, especially where we're simply overpaying, at a personal cost to myself, sign me up for having an agenda but I think it's a noble one, am proud to have, and in no way try to hide. Unless you like paying higher taxes on wasteful expenses, I'd hope you feel the same.

Again, I'm not saying something is amiss but just pointing something out that seemed to not add up at face value. Bluegrass's comment that the applicant's attributes significantly affect the premium makes sense. The state does have a pre-existing condition exclusion which would negate something like diabetes (and smoking doesn't appear to significantly increase a young person's cost) but perhaps age and weight are very significant. A quick check of a 60 year old couple's premium including a small child (to better compare to the original family premium I mentioned before) does show it more like $1127 which is more in line with the state plan's cost after factoring in the deductible. So, I guess for every cheap healthy person like me, there must be a really old sick person that my high premium (factoring in the state's contribution) is helping subsidize. That is somewhat surprising to me, having not had to look at the cost of healthcare in the past because my portion of the cost is so small, but I suppose not unreasonable given how expensive the last few years of life can be. The only truly good way to judge the appropriateness of the cost would be to price the premium for everyone on the plan which of course would require lots of data that isn't publicly available. Guess we just have to trust our leaders on this...

bluegrass wrote on January 24, 2011 at 2:01 pm

I'm pretty certain Yatiri

I'm pretty certain Yatiri didn't understand what you were getting at.. Hopefully he will with your recent explanation. I really like the idea that people are searching for ways to cut down on costs. I think a big part of the problem is that most people don't understand the way the medical system works, and the way that health insurance works, and unfortunately that includes many of our elected representatives. I think perhaps one of the only ways to educate people would be to pass on more of the true cost of health insurance and care to the end users, as opposed to insulating it all within this cloak of secrecy. Maybe instead of paying the bulk of the insurance cost, the state should be paying none of it, and instead paying that money to the employee and letting them decide how to spend it. Of course I have a feeling that this idea would not go over to well with unions, since the money would then be taxed as income, which at present time it is not. But let's say your power bill really costs $1000 a month, but you only have to pay $100. Do you really care if you leave all the lights on all day long, or run the AC when you're not home? But if you had to pay the whole $1000, wouldn't you be more likely to keep a closer eye on things in the house? Same with health insurance and medical care.

There was a nice article in Sunday's News Gazette with some realistic ways to reduce the cost of care, and the cost of insurance.

thechampaignlife wrote on January 24, 2011 at 4:01 pm

I agree. Pay me the $1200 in

I agree. Pay me the $1200 in wages and let me choose where to spend it, even if I'm taxed on it. Even if I'm still forced to choose from a predefined list of plans, seeing that $1400 total cost figure would surprise a lot of people and maybe we'd get around to doing something about it.

Here's a timely article on this subject: http://www.chicagotribune.com/health/ct-met-illinois-retiree-health-insu.... They throw around some figures in that article which muddy the picture even more such as $488M spent per year on 81,400 retirees/spouses which works out to $484/person/month, far less than the current employees' rate. You'd think older people would be more expensive to insure...unless I made a mistake in my calculations.