Negotiating Premium Increase

We just received our premium increases for our new plan year with our health insurance plan.

Last year we were facing a 22% increase due to our claims experience (for the past two years, we had more paid out in claims than what came in for premiums) so we took the big step of switching from an HMO to a high-deductible ($2,000/$4,000) PPO with an HRA. The result was a 9% DECREASE in our current premiums.

This year, the increase in our PPO premiums is slated to be 16%. I thought that seemed a bit steep due to the fact that we had reduced our group's risk somewhat. The health insurance rep also stated that for the first 8 months on the new plan, there had been no claims loss.

So, should I try to negotiate down the 16% and, if so, how should I do it? I feel as though I don't really have a leg to stand on--it's not like I can say, "Fine--we'll just go with someone else," when our renewal is due May 1.

Comments

  • 5 Comments sorted by Votes Date Added
  • You have every right to shop around for other insurance carriers. If you have a broker, they should do it for you. If not, get the claims experience for the past couple of years (including the first 8 months of this year) and contact other insurance carriers. Instead of worrying about negotiating (which you can still try), give yourself some options.
  • Whatever is right.
    Have your broker work on it if you have one.
    1 month is enough time to get quotes and get everyone enrolled in a new plan.

    Continue to try to get the rate reduced and the claims experience report from the carrier.
  • You bet... shop around and let your current provider know that you are. We went to a partially self insured plan back in 2000. We are responsible for the first $30,000 of each ee and a re-insurance company picks up the tab after that. We have only had one year when this costs us more than being fully insured by an outside company and we have saved a bunch the other years. We are way ahead of the game. We are also self insured for dental and I am strongly considering going self insured for STD next year. Of course if the plague comes through town we will be in a big hole financially, but so far no regrets.
    Good luck.
  • Dutch2--How many employees do you insure?
  • We have approximately 100 employers eligible for benefits.
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