It's been a long time since we could say "your rates are going down" rather than "rates are going up and so is your deductible". We have wondered where the tipping point will be for affordability for consumers and profitability for the insurance companies, maybe we have finally reached it. This morning as I watched the news which is full of commercials promoting $5,000 per month medications that are "free" to consumers if you have commercial insurance, I scratch my head and wonder when the madness will stop. Well it's not stopping but at least it may not cost as much next year.
In August, 2018 BCBST reduced their base rates in the middle market for Tennessee group insurance customers by around 15%. This was HUGE and a tremendous relief to hard hit businesses and employees. Now it looks like the small group EHB plans and individuals will see some rate relief for 2019. Those rates are filed annually and can't be changed until January 1st. BCBST is proposing an average decrease of 10.9% and Cigna will reduce costs by an average of 4.8%. We should know what small groups are getting by early August, my fingers are crossed.
Obamacare changed the rules when it forced insurance companies to offer coverage with no exclusions, limitations or pre-existing conditions. The carriers did not really know how to price a policy like this and BlueCross BlueShield of Tennessee came out with some really attractive rates. After loosing hundreds of millions of dollars the incremental increases trippled the premiums. In 2015 rates increased by 19%, 36.3% in 2016, 62% in 2017 and 21% in 2018. Cumulatively, that is a 318% increasing taking a $100 monthly premium in 2014 and costing nearly $318 today.
For the small business owner the increases have not been that extreme but it's still been very painful. I had a group who recently tried to offer a group medical plan to their employees only to have all 10 employees say they could not afford or did not want the plans. The company was going to pay 50% of the cost but still it was unattractive to the employees, that is not a good thing.