California Attack on Self Insured Small Group Plans

[CABenefits]

More regulation coming for self-insured plans. Cigna level funded down to 25 lives targeted. Critics saying unfair for healthy groups to get better rates by not pooling the sick.

California seeks limits on small-business self-insurance trend - latimes.com

Only in CA, well maybe NY too

Mike

 

[ABC]

California is going to lose the carriers for the small group market and Individual.

 

[djs]

Oh, don't get me started about how hypocritical this is...
How dare an insurance company want to insure people? The exchange needs those individuals to make it work.

You want to lower the cost of a few that don't use much? Why? That will raise the costs on those who have high utilization!!!!

Sounds like the government is starting to understand some of the moral hazard that they have created by going down this path. Any seasoned insurance agent or any actuary could have told them this up front and saved us billions of dollars.

Dan

 

[stuy119]

Dan, remember, they didn't want our feedback since we're only in this for the money.

 

[junkman]

$10,000 spec @ 100 members increasing incrementally seems about right. I would go self funded here if I could get a carrier to write it. HDHP is the closest thing there is.

 

[CABenefits]

So to update you all SB 1431 was sponsored by the Senate Health Committee by a vote of 6-3. This is going to be tough to stop.
Strong Consumer Protection Bills Sponsored by Insurance Commissioner Dave Jones Move Forward in California State Legislature

If you are a broker that does group in CA please fight this as it moves to be voted on.

Mike
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My second message to the Senate Health Committee:

To whom it may concern:

Re: SB 1431

My name is Michael Young and I'm a licensed health insurance broker in Visalia, California. I want to thank the 3 members of the Senate Health Committee that voted against sponsoring SB 1431. I have several businesses throughout California that count on me each year to provide the best possible coverage for their workers at the lowest cost for the employer and employee. I have several groups that use their benefits very little but spend $50,000 or more per year. In those instances, the insurance carrier wins and gets to keep all of the premiums paid.

I also have groups as small as 2 employees where a members wife has end stage kidney failure and 1 of her medicines costs $10,000 per injection. That carrier is losing every which way and can not make up for it on premiums paid in. But under AB 1672 all groups of 2 or more are guaranteed acceptance as you know.

It is my belief that regulation stifles innovation. While setting up a fully insured plan is not for every group, it certainly limits profits for the carrier and provides a reason for the employer to promote healthier workers. For groups with an aging workforce, the premiums can be cut drastically and lower costs for the employer and employee.

Again, thanks to the 3 members that opposed this legislation and I will do my part to educate business owners on the hurdles we face in California which are great

 

[leevena]

$10,000 spec @ 100 members increasing incrementally seems about right. I would go self funded here if I could get a carrier to write it. HDHP is the closest thing there is.

You can do much better than that in TN. A 10k spec for a group of 100 (if it were even available) would be so expensive that it would not be worth it. You could do a risk-sharing captive or some other strategy that would be much less costly.

 

[Crabcake Johnny]

BX of Michigan just announced yesterday that's there's no more commission for self-funded.

 

[leevena]

BX of Michigan just announced yesterday that's there's no more commission for self-funded.

In my opinion, this is actually a very good thing. 1. If the payment to the broker is coming from the carrier the employer could perceive (and often does) that the broker's first loyalty is to the carrier, not to the employer. 2. It is less costly. 3. It add more, and easier, transparancy for this issue, and isn't that what we are all asking of the healthcare providers anyway?

 

[sissymary]

The lib government has distroyed California.