Understanding health insurance premiums

Read the following. Do you think this is a gotcha for the insurance company? Not really. They used an assumption that was challenged, but only time will tell who was right and if the insurer was correct, the following years premiums must make up the loss.

Now you may say, they were only trying to make more money, but why do that and make your plans less competitive?

But what is really important and what reflects the real problem for Obamacare and other insurance faces is the 37.3% premium increase that was improved. Yikes‼️

The California Department of Managed Health Care challenged Anthem’s estimates for future medical costs, in particular its prediction of a 30 percent jump in pharmacy expenses for the individual market — nearly double the estimates of two other big insurers and out of line with industry trends nationally.

As a result of the department’s intervention, the nation’s second-largest health insurer shaved 3 percentage points off its 2018 rate increase for individuals and families, still leaving a hike of 37.3 percent. That increase is the second-highest — after Molina Healthcare — among the 11 insurers that sell in the Covered California exchange. Anthem also cut its rate hike on small businesses by more than half, to 2.5 percent. Source:Kaiser Health News


  1. When are the patients going to wake up and stop demanding a pill to fix a health condition that in many cases can be helped by a better diet. I was on a high blood pressure medication for edema (swelling in my legs and feet), I had let my weight get up to 285 pounds. Now at 235 pounds, I am off the meds with normal blood pressure and no more swelling. We all need to be smarter about our life choices, to live a better life without high cost medications. The side effects of most medications are worse than what they are trying to fix, never my first choice in treating any medical condition.


  2. Percentages are deceiving in the first place. The question is; did the insurance underestimate what they were expecting to pay for drugs in the last few years and are adjusting their numbers or did they get stuck with more customers trying to avoid Obamacare penalties? Maybe as part of their state rate filing they have some kind of pill per patient breakdown that justifies their request. I agree that the overall percentage increase is a red flag to look closer but how far apart are they from the other insurance dollar amount? The article doesn’t say. Maybe they had to raise their pricing 30% to be the same, maybe they are willing to take the heat this year and someone else will take the heat next year. Maybe they want to lose customers that are unhealthy.


    1. Could be several of those reasons, but that strategy will not lose unhealthy customers, but the opposite. You are far less likely to pay more for insurance you feel unlikely to use.


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