mattpegher
Platinum Member
Why do we continue to let the health insurance companies swindle us with the group rate scam?
Even on this forum, it has been argued that group rates are necessary for health insurance companies to average out the risk. Yet every other insurance product sold today seems to survive without it. Car Insurance, Life insurance, Home Owners. All these products seem to be able to average risk without locking people into policies that they dont want.
The biggest thing that propegates this scam is the coupling of insurance to employement.
One of the companies that I worked for, would give a stipend of $1250/month to full time employees. This money would offset the cost of insurance which they would deduct pretax. Being young I chose a "facilities only" high deductable plan, they would pay routine care, and any lab or xray done at an in network free standing center (lab corp or Quest), but I would be responsible for the first 5000. That 5000 was put into an HSA, instead of giving it to the insurance company, and the whole thing still cost me 3.2K less, ( 10,800 ins + 5000 HSA = 15800 vs 19000 (18000 ins + 1000 ded) and I was lucky enough not to use the 5000 for a few years.
The effect of this was I knew exactly how much was being paid to the insurance company as well as having a choice of up to 8 different plans to choose from. American are fixated on the idea that health insurance is some sort of "benefit". When in fact it is money you earned, but for most employees, it is an amount that is hidden from you. Not to mention, if you opt out (you get almost nothing).
The Group rate scam is just another way for the insurance companies to prevent competition.
I know this doesnt answer all the problems, but I just wanted to attack this one issue.
Even on this forum, it has been argued that group rates are necessary for health insurance companies to average out the risk. Yet every other insurance product sold today seems to survive without it. Car Insurance, Life insurance, Home Owners. All these products seem to be able to average risk without locking people into policies that they dont want.
The biggest thing that propegates this scam is the coupling of insurance to employement.
One of the companies that I worked for, would give a stipend of $1250/month to full time employees. This money would offset the cost of insurance which they would deduct pretax. Being young I chose a "facilities only" high deductable plan, they would pay routine care, and any lab or xray done at an in network free standing center (lab corp or Quest), but I would be responsible for the first 5000. That 5000 was put into an HSA, instead of giving it to the insurance company, and the whole thing still cost me 3.2K less, ( 10,800 ins + 5000 HSA = 15800 vs 19000 (18000 ins + 1000 ded) and I was lucky enough not to use the 5000 for a few years.
The effect of this was I knew exactly how much was being paid to the insurance company as well as having a choice of up to 8 different plans to choose from. American are fixated on the idea that health insurance is some sort of "benefit". When in fact it is money you earned, but for most employees, it is an amount that is hidden from you. Not to mention, if you opt out (you get almost nothing).
The Group rate scam is just another way for the insurance companies to prevent competition.
I know this doesnt answer all the problems, but I just wanted to attack this one issue.
