Earlier this month, I received another rate increase notice from my health insurer. It was for their second rate hike in six months. Taken together, the two increases add up to almost 10%. In just six months. That works out to 20% a year.
The letter that the insurance company sent me noted increased "healthcare related costs" as the reason for their rate hike. But I'm not buying it. A slightly edited version of my rate hike rejection notice appears below the orange squiggle...
To: The Mega Life and Health Insurance Company, 9151 Boulevard 26, P.O. Box 982010, North Richland Hills, Texas 76182-8010
From: Arizonaslim
Subject: Rate Hike Rejection Notice
Your December 27, 2011 letter to me announces a monthly rate hike. This is your second rate increase in less than a year. Coupled with your September 2011 increase, you're now asking me to pay almost 10% more for health insurance, which includes a substantial deductible. You cite continuing increases in "healthcare related costs" as your reason, but I find it hard to believe that those costs have gone up by almost 10% in less than a year. I reject your reason for this increase.
Looking back through my records, I found that my monthly premium was 31% less back in January 2005. Considering that many of your customers are self-employed people who are struggling through the recession, I don't understand why you keep increasing premiums. After all, our incomes aren't going up.
However, 2005 was a notable year for your company. That was when regulators from 35 states launched an investigation into your business practices. That investigation resulted in your having to pay $20 million to those states in 2008. More recently, your company has been barred from selling policies in Massachusetts, and it is also being sued by the City of Los Angeles. I imagine that all of these legal actions are getting to be quite expensive. Could they be the real reason why my health insurance premium is increasing by almost 10% in less than a year?
Then there are your two majority owners, Blackstone Group and Goldman Sachs. Is their insatiable Wall Street greed behind your latest rate hike?
I look forward to learning the real reason for your rate increase. So are the following elected officials.
Hon. Paula Aboud, Arizona State Senate
Hon. Steve Farley, Arizona State House of Representatives
Hon. Raul Grijalva, United States House of Representatives
The Mega Mistake -- and How I Made It
If you're wondering how I found myself with such a dubious policy, it all happened via the Southern Arizona office of the Arizona Small Business Association (ASBA). I was a member up until mid-2004.
In 2003, there was a guy attending ASBA meetings asking if people were being mugged by their insurance company. The solution to this mugging? An organization he represented, the National Association for the Self Employed (NASE). It offered something that a lot of us needed: affordable health insurance. The insurance was (and is) through Mega Life and Health, which was purchased by Blackstone Group and Goldman Sachs Group in 2006.
The NASE/Mega insurance sales guy had done a great job of ingratiating himself to the people who ran the southern Arizona ASBA office. And even though southern Arizona ASBA didn't give this guy an official endorsement, it looked to all the world like an implicit endorsement.
Unfortunately, I fell for his sales pitch. The insurance was one of those things that was a lot cheaper than any other thing on the market for individuals. Since I was pushing 50, it was unlikely that I'd find anything else with a premium that didn't look like a mortgage payment.
A few years after I signed on with NASE/Mega, I tried to get on the Arizona state plan for small business people, the Healthcare Group, but guess what? Our legislature passed a law that excludes sole proprietors from this plan. Thanks a lot, legislature.
So, looks like I'm stuck with NASE/Mega. But let me tell you, if and when a public option goes into effect, I will cheerfully kick that NASE/Mega policy to the curb.
Actions You Can Take
If you're self employed or are a freelancer, recognize that your options in the individual health insurance market are very limited. Which leaves you vulnerable to outfits like the insurance company whose rate hike reasoning I'm rejecting.
Not to mention organizations like the National Association for the Self Employed. It isn't so much an association for self employed people as it is a front for selling junk health insurance.
So, the first thing you can do is be aware -- and beware -- of the Mega-traps that could snare you. Educate yourself. Here are three links that may help:
1. Ripoff Report: #131154
2. Bloomberg Businessweek: It's Enough To Make You Sick - Scams are proliferating as more families scramble for affordable health coverage
3. AttorneyPages
Second thing to do: Does your health insurance keep going up, up, up, and up? Well, it's time to send your health insurer a rejection notice.
After all, they send us rejection notices when they don't want to pay claims. Or when they don't to cover us because of a pre-existing condition. It's time for us to turn the tables on them. Feel free to use my rate hike rejection notice as your template.
In your own letter, you could note such things as what your health insurance company's CEO is making and compare it with your own salary. Or you could note their campaign contributions in recent years. Whatever works for you. The point is to compare their riches with our struggles to make ends meet.
Third thing to do: Copy your elected representatives in on your health insurance rate hike rejection letter. I've heard that each constituent letter represents the sentiments of 1,000 people. So, write.
Fourth thing to do: Advocate for a better health care system in this country. And that system should include real health insurance, not the junk that is being foisted on so many of us.