Health Insurance: The Roller Coaster Ride Continues

November 10, 2015

Guest Blog by Rob Cannon, Executive Vice President, Gorges and Company, Inc., Member of Maryland Nonprofits



Gorges and Company Insurance offers Directors & Officers (D&O) and Employment Practices Liability (EPL), in addition to Fiduciary Liability and Volunteer Accident Coverage. Gorges and Company will be represented in the exhibit room at our 2015 Annual Conference! Meet them Nov. 13th!




Here is a brief overview of what has happened. If you know this or don’t want to read it all, make sure you read the last part.


Maryland Health Care and Insurance Reform Act of 1993


  • Guarantee small business access to health insurance
  • Reduced premiums by about 30%
  • Set consumer protection
  • Eliminated medical underwriting & pre-existing condition exclusions
  • Required insurance companies to offer similar plans
  • Required premiums to be determined by age and geography

Does this sound anything like the goals of the Affordable Care Act (ACA)?



Why rates were going up before the ACA


  • Health care benefits increased 72% since 2000
  • Population is aging
  • Rise in obesity and chronic illnesses
  • Introduction of new treatments
  • More diagnostic testing
  • Defensive medicine
  • Higher premium tax costs of regulatory medicine



What were the major changes with the ACA?


  • Preventive services are free
  • No annual maximum – unlimited
  • Individuals are required to have insurance or pay a fine
  • An exchange must be created
  • Individual subsidies based on income
  • Employers with 50+ employees must offer health insurance
  • Expansion of Medicaid


Ok, so we dealt with this. Now what? Most group renewals in the last half of 2015 had increases of no more than 5%.  Individual coverage for January 2015 had modest increases (maybe 15%). Look out for 2016!  We have heard that individual increases are 10% – 55%!  What about group plans? The rates are being promoted as lower. In many cases, that will be true. Pay attention or you may be shocked!  Here is an actual case for a January 1, 2016 renewal.


HMO Plan $1,500 Deductible 


January 1, 2015 January 1, 2016
Copays  $30/$30 $25/$50
Hospital Inpatient Charge $250 per admission $500 per DAY
Out of Pocket Maximum $4,000/$8,000 $6,500/$13,100
Emergency Room $100 $250


Using a simple example of someone taken to the Emergency room and then being admitted to the hospital for 10 days would look something like this:








Hospital Inpatient Charge $250 $5,000



Hopefully, it won’t impact too many people. But if it is you or an employee, it will leave a lasting impression.

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