We�re a very small agency, in a little suburb of a modest-sized Midwest town, but we do provide health insurance for those of our employees who want (and/or need) it. For a number of reasons, we�ve stayed with the same carrier for more than a few years (NTTAWWT). Of course, we�ve changed configurations over those years; the most recent was selecting a slightly higher deductible and installing an HRA (Health Reimbursement Arrangement).
Our renewal came up recently, and we had to make some choices. On the one hand, we�re not dissatisfied with the coverage and overall service of this carrier (they�re no worse � and no better � than anyone else currently in this market), but the experience I�m about to relate certainly earns it a spot in our (not so) coveted Pantheon of Stupid Carriers:
Our current plan is no longer being offered, but was a fairly typical PPO. We had coupled it with the HRA. The carrier�s automatic renewal option (the plan we�d go on by default, unless we specified otherwise, and which we�ll call Option A) is attractive: a $2,000 deductible, then 100%. Office visits are on our own nickel, but count towards the deductible (something the present plan�s co-pays don�t do). There�s still a prescription drug (rx) card, but it would be subject to that $2,000 deductible, which is �non optimal.� On the other hand, the rate is some $700/month lower than a plan with benefits similar to our present one. That would enable us to bump up the HRA numbers to offset the increased out of pocket.
But the deductible/rx tie-in is a non-starter. So I asked if they had a plan that did everything this new one would, but with an rx card that�s �turned on� from the get-go (no deductible). Turns out they do (we�ll call it Option B), so I asked for a quote on that plan.
So far, so good.
So what�s so stupid?
Well, I get all the numbers, and see something very strange : for one thing, they included the numbers for the plan we don�t like (Option A), but the premium is now some $170/month lower than what my actual renewal, which I got from the carrier in the first place, says it costs. They also included the plan we did want (Option B; same as Option A, but the rx card has no deductible), and it�s even less! Now, I�m not usually one to look a gift horse in the mouth, but this is getting stupid: why would the �better� plan (Option B) cost less than the not-as-good one (Option A)? And why are the numbers for Option A now almost $200 a month less than what we were originally told?
But wait, there�s more! I noticed on the speadsheet the carrier sent that there were TWO versions of Option A (the plan we don�t like). They were absolutely identical in benefit structure, but had two different product numbers. Plus: one was almost $200 per month more than the other.
I�ve asked, and I gotten the following response from the carrier (BTW, I�ll give them credit: at least they did respond):
�Yes, the premium is typically higher on the [�better�] plans vs. the [�not as good�] due to the up-front [no deductible] drug card. I have seen a few cases come back where that is not the case but they are pretty rare.
Additionally the [two identical but for price plans] are priced differently primarily due to experience. The [one] series did not run as well as they anticipated which has caused them to receive a higher rate than the [other] series.�
Okay then.
I do this for a living, and am reasonably adept at it, and this blows even me over.
(Warning to those who will say �Well gee, Prof, all the more reason for a national plan, so we don�t have this kind of confusion.� Oh yeah? I�ve got three words for you: I. R. S.)
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