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I worked many years at University of California - 10+ campuses and tens of thousands of employees.
Initially they had 3 premium groups for employees:
-Single
-2 adults
-Family (any combination of adult(s) and children)
In recent years they added a 4th group:
-1 adult and child(ren)
If I recall right, 2 adults' premium was higher than family premiums.
With continual rise in premiums over so many years, with no end in sight, and taking such a chunk of earnings and payroll - and add things like same-sex marriage - changing family dynamics (and added eligible dependents, etc) the complexity and impact of health plan cost is significant.
BTW - it used to be that the "family unit" was highly regarded as a positive and important building block of society, community, citizenry, etc - therefore, it was supported and encouraged, financially and otherwise.
I worked many years at University of California - 10+ campuses and tens of thousands of employees.
Initially they had 3 premium groups for employees:
-Single
-2 adults
-Family (any combination of adult(s) and children)
In recent years they added a 4th group:
-1 adult and child(ren)
If I recall right, 2 adults' premium was higher than family premiums.
With continual rise in premiums over so many years, with no end in sight, and taking such a chunk of earnings and payroll - and add things like same-sex marriage - changing family dynamics (and added eligible dependents, etc) the complexity and impact of health plan cost is significant.
BTW - it used to be that the "family unit" was highly regarded as a positive and important building block of society, community, citizenry, etc - therefore, it was supported and encouraged, financially and otherwise.
That doesn't make sense. Why would a couple choose the "2 adult" plan when they could choose the "Family" plan?
That doesn't make sense. Why would a couple choose the "2 adult" plan when they could choose the "Family" plan?
Because for these plans, the 2 Adults Plan is cheaper than the Family Plan. Why would couples choosing never to have kids, Gay Couples, or Empty Nesters, need or want a higher Premium Family Plan?
You also cannot compare Non-Profits to Profit Employer Plans. They don't insure the same way. About 10 years ago I worked for Non-Profit MR/DD Agency. The PPO Premium for employee, spouse, and child/children was $300/month. Spouse alone was half that. This included Dental, Scripts, and Eye Care. The facility also had an on site Clinic for their "Consumers" which employees and covered dependents could use for free (no co-pays); GP, GYN, Specialists, Dentists, etc.
My husband dropped his employer health insurance (can this still be done?) and I covered both him and our college enrolled daughter in another state. We need PPO for the out-of-state coverage. Cheaper and better coverage.
We had different health insurance coverage companies over the years. We were told that the Head of the Agency would shop around for better rates in order not to pass along the higher rates to staff.
Because for these plans, the 2 Adults Plan is cheaper than the Family Plan. Why would couples choosing never to have kids, Gay Couples, or Empty Nesters, need or want a higher Premium Family Plan?
You also cannot compare Non-Profits to Profit Employer Plans. They don't insure the same way. About 10 years ago I worked for Non-Profit MR/DD Agency. The PPO Premium for employee, spouse, and child/children was $300/month. Spouse alone was half that. This included Dental, Scripts, and Eye Care. The facility also had an on site Clinic for their "Consumers" which employees and covered dependents could use for free (no co-pays); GP, GYN, Specialists, Dentists, etc.
My husband dropped his employer health insurance (can this still be done?) and I covered both him and our college enrolled daughter in another state. We need PPO for the out-of-state coverage. Cheaper and better coverage.
We had different health insurance coverage companies over the years. We were told that the Head of the Agency would shop around for better rates in order not to pass along the higher rates to staff.
Go back and read the original post. It states:
Quote:
If I recall right, 2 adults' premium was higher than family premiums.
For federal employees, there has been a plan for singles and a family plan with the family plan costing about 3x the amount of a singles plan. Recently they added a two person plan (Self plus one?) but the cost is only a little less than the family plan - some reasons have been provided to explain this but I don't remember what they are. Healthcare costs for children average less than for adults. National Health Service 2012 healthcare estimates are $3600 per child, $6600 per working adult, and $19,000 per senior age 65 or older. Perhaps the couples converting from a family plan to Self plus one have primarily been empty nesters who are older so their actual health care costs are higher than two singles since many singles are younger. The federal workforce tends to be a married, aging one unlike Silicon Valley. I'm sure the health insurance companies have this down to a science and are not going to underbid on these contracts.
As a long time single person with no children, my health insurance has been one of the few areas where I feel that I am being charged appropriately and not paying more than my share. Not the case for income taxes, property taxes, social security taxes, etc.
Pre-ACA, when DH and I had small group coverage for our business, it was about $30/month cheaper to insure me with the kids and him as a single employee than it would have been to go as a family. The only disadvantage was that we could not combine his expenses and ours(me and kids) to meet the family deductible. Fortunately that never became an issue.
At that time, all three kids were insured for one low price. When our group coverage was cancelled due to the ACA, we ended up on the exchange very briefly, and then in private policies which all charge for each child individually.
Fed self+1 is sometimes more expensive than family coverage under some plans. It's never much less than family because the demographic skews older - think empty nesters with rising med expenses.
In general pricing oddities like what have been discussed here have two sources: Overall plan prices and scope (single, couple, kids etc) are set under state law everywhere, some with more regulated than others, but there is no free market for health insurance. The second issue is employer insurance. Employees (with rare exceptions) don't pay full cost, and their share of the cost will vary at the whim of the employer. If the employer likes large families (the catholic diocese maybe), then the best deal (lowest employee percentage) might be large families.
Serious question. Why is a couple charged less than double the single rate? Why is family coverage for a family with one child the same cost as a family with 8 kids?
This has never made sense to me.
It's called the Community Rating Scheme. It arose out of the enabling laws obtained by the American Hospital Association during the 1930s when they lobbied State legislatures to enable the AHA to offer insurance without submitting to State insurance commissioners or regulators.
"Under community rating, higher cost groups (e.g., groups made up of older or sicker people) are averaged out with lower cost groups (e.g., groups made up of younger or healthier people). The expenses of all participants are pooled together and then spread out equally across all participants."
"'Adjusted community rating' is a rating method under which an insurer charges a particular group an amount that is derived by modifying the community rate for the group's specific demographic factors (e.g., age, gender, family composition, geography).
Since group plans keep getting mentioned, as an employer, we most certainly have the option of selecting premium plans that charge per person. We can have single, couple, couple plus one, couple plus two, single plus one, single plus two, or three, or six or ten.....and ....... The reason few do it is the added administrative cost plus the plan jumping among family members causes way too many problems. Additionally, as we complete the census, rates are based on that initial data with periodic adjustments but if we have too many options with too many premium levels, adjustments would have to be made so frequently that employers could not keep absorbing the changes so it would mean constant premium changes to the employee as well. Talk about unnecessary confusion.
So, yes there are many plans with rates based on each person being covered and just as many that offer streamline rates.
Serious question. Why is a couple charged less than double the single rate? Why is family coverage for a family with one child the same cost as a family with 8 kids?
This has never made sense to me.
That's how insurance is supposed to work. Everyone pays even when they don't need it, and then when they do, they can get money, but the idea is that most people won't need it. So most people will theoretically be losing and wasting money on health insurance. That's how insurance works.
Also, people with lots of children get lots of benefits as others have stated, because the government subsidizes children. It's why children get free education, free health care, free food, etc.
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