SimplyInsured Forecasts ~20% Increase in Small Business Health Insurance Premiums

SAN FRANCISCO - Oct. 8, 2013 - PRLog -- Employees Under 40 Will See ~20% Increase in Health Insurance Premiums

The opening of the California public exchange has provided the first confirmation that small business health insurance premiums for younger employees will indeed be higher starting in 2014. SimplyInsured’s (http://www.SimplyInsured.com) analysis of the rate curve shows an expected increase of 21% for customers in their twenties and 19% for customers in their thirties. Based on current rates, small businesses will pay $600-$900 more per year to insure younger workers. Workers aged 40 to 60 will see <5% increases while workers over 60 years old will see almost no change to their premiums.

SimplyInsured analyzed the statewide pricing of Covered California and the 5 major insurance carriers (Kaiser Permanente, Anthem Blue Cross, Blue Shield, Health Net, & SeeChange Health) to identify the difference in pricing between age tiers. The five carriers analyzed represented over 80% of the group enrollment market, providing a fairly comprehensive view into the California market.

Based on our findings, carriers have consistent pricing for each major age group. For employees under 40 years old, each of the carriers have essentially the same premium rate relative to their overall rate. Older employee groups (over 40 years of age) did the carriers start to show greater variance in pricing.

- For the 20-29 age group, the age group premium was 40-45% of overall average
- For the 30-39 age group, the age group premium was 49-52% of overall average
- The spread was highest for the older employee groups. The 60-64 age group premium ranged from 130% to 150% of the overall average

Using Covered California Premiums by Age to Forecast 2014 Rate

The Covered California pricing represents plans that will take into effect in 2014, and provides a peek into the future for how each insurance carrier will change pricing in 2014. Comparing the Covered California age group premium with the average private market provides a clear indication on where rates are going in the future:

- The age group premium for a 20-year old was 52% of the overall average, compared to 43% average for private group plans
- The age group premium for a 30-year old was 61% of the overall average, compared to 51% average for private group plans
- The age group premium for older employees were generally flat, as the age group premium for a 60-year old was 144% compared to 145% for private group plans


This suggests that premiums for younger employees will increase significantly, while the premiums for older employees are likely to see smaller or no rate increases.

Small Businesses Will Pay Significantly Higher Premiums for Younger Employees

Consequently, while the premium for an employee in their 20s is currently 43% of the overall average, next year the premium for the same employee will increase to 52% of the overall average. Without accounting for across the board premium rate increases, a 20-year old employee will be 21% more expensive to insure in 2014.

Similarly, while the premium for an employee in their 30s is currently 51% of the overall average, next year the rate will increase to 61% of the overall average. The cost to insure a 30-year old employee will increase by 20% in 2014.

Our Recommendation for Small Businesses

This analysis confirms the expectation that premiums for younger, healthier employees will increase due to the Affordable Care Act. Since health insurers can no longer refuse to provide coverage or charge differentiated pricing for pre-existing conditions, insurers are expecting an increase in enrollment of older, sicker employees. Consequently, insurers are looking to increase rates on their youngest, healthiest covered base to offset the higher anticipated costs of insuring older, sicker enrollees.

Consequently, companies with younger employees should carefully analyze their current healthcare plan to see if they are at risk of facing higher health insurance bills on January 1st. Our recommendations for small businesses are to:

Check SimplyInsured to find the best value health insurance plans today (www.SimplyInsured.com)

If you are planning to start a company health insurance plan - apply for a new company policy before November 15th. Health insurance coverage always begins on the 1st of the month. Shopping for a plan in December will result in coverage beginning on January 1st, 2014 - and higher premiums!

If you have an existing company plan - ask your broker about renewing your existing plan early. Many insurers are allowing companies to renew their existing plans, allowing companies to lock in lower rates for another 12 months and delay the onset of higher rates

For full report, please email info@simplyinsured.com


About SimplyInsured

SimplyInsured is a Y-Combinator backed healthcare startup bringing small business health insurance into the 21st century. SimplyInsured allows small businesses to shop, compare, and purchase health insurance 100% online, saving small businesses both time and money. SimplyInsured’s technology estimates real Out-of-Pocket costs when purchasing health insurance, turning 100+ costs/benefits in health insurance into one, simple, easy-to-compare price.

www.SimplyInsured.com