• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
New City Logo

New City Insurance

Employee Benefits & HR Consulting Firm

  • Benefits Consulting
    • 401k & Retirement
    • Employee Benefits Benchmarking
    • Executive Benefits
    • Group Health Insurance
  • HR Compliance & Technology
    • Benefits Administration Technology
    • Employee Benefits Compliance
    • HR & Payroll Integration
    • HR Support
  • Our Process
  • Industries
    • Aerospace Industry
    • Biotech Industry
    • Engineering Industry
    • IT Industry
    • Manufacturing Industry
    • Gas & Oil Industry
  • Request Consultation
  • Industries
    • Aerospace Industry
    • Biotech Industry
    • Engineering Industry
    • IT Industry
    • Manufacturing Industry
    • Gas & Oil Industry
  • About
  • Blog
  • Contact
  • Client Portal
  • 888.210.2759
  • Request Consultation

Why Are Group Health Insurance Premiums Are Going Up Every Year?

October 4, 2021, by New City Insurance

insurance costs rising conceptEver since the onset of the Affordable Care Act (ACA), health insurance premiums have been increasing at a significant rate year after year. The ACA was intended to save Americans billions of dollars in premiums by capping health insurers’ profit margins and holding them accountable.

Unfortunately, the ACA was not effective in reducing insurance premiums for Americans because of the lack of regulations that would monitor the validity of costs that are being paid toward claims. The regulations that the ACA had on insurers only restricted their profit margin, which led to insurance companies increasing their revenue through insurance premiums and costs through insurance claim costs.

Affordable Care Act 80/20 Rule

The 80/20 Rule requires insurers to spend at least 80 percent of the insurance premiums that they collect from policyholders on medical insurance claims and quality improvement costs. This leaves the remaining 20 percent for things such as administrative overhead and marketing efforts.

If insurers were unable to fulfill the 80 percent insurance claim spend requirement, policy holders would get a rebate of the difference. This rule was put into effect to save Americans money on their annual medical insurance spend while capping the profit margin that insurance companies can have.

In the first year of effect, the 80/20 Rule brought back billions of dollars to Americans in insurance rebates because insurance companies struggled to comply with the new rule. Soon after, insurers started to allow an increase to the cost of medical insurance claims to maximize medical insurance claim costs and minimize the rebates that policyholders should have been receiving.

Varying Medical Insurance Claim Costs

The cost that health facilities charge an individual varies on the carrier and type of coverage that they have. For example, an individual with no insurance can be charged $200 in cash to have a given procedure performed, an individual with insurance will be charged up to $2,000 for the same procedure and same physician simply because they have insurance.

The average hospital has more than 125 prices that they invoice for a given procedure depending on the insurance that the individual has. This variance in price is significant because procedures in retail market plans can have a difference of tens of thousands of dollars depending on the contract of the plan, which is a loophole insurance companies are using to satisfy the 80/20 Rule and not having to pay rebates to policyholders.

cost of health careMedical procedures vary significantly both across and within geographic regions. For example, in the study “KFF analysis of IBM MarketScan Commercial Claims and Encounters Database” showed that the average allowed charges for in network knee and hip joint replacement surgery in large employer plans had an interquartile range* of $31,690 with a median of $33,554 in the San Diego-Carlsbad, CA region.

On the other hand, the Baltimore-Columbia-Towson, MD region had an interquartile range of $6,198 and a median of $23,170 for the same procedure. This shows how significant the medical claim costs vary within and across regions throughout the nation. Ever since the onset of the ACA, medical claim costs have had absurd variances adopted by health centers across the country to offset the Affordable Care Act’s attempt to reduce policyholders’ premiums in the 80/20 Rule.

How Can Employers Fight Back Rising Insurance Premiums?

The constant increase of insurance premiums are forcing businesses to reduce contributions, decrease benefits, or cancel health plans altogether. The rising insurance premiums are causing employers to turn to customized health plan solutions that increase insurance premium savings and maintain quality benefits.

This alternative plan solution allows the business to control the selection of the plan that fits the employees’ needs. By effectively using a custom health plan design, employers can save a significant amount year after year on insurance spend without the need to reduce benefits or employer contribution.

Contact New City Insurance Today

Group Health Insurance premiums are increasing year after year causing employers to reduce coverage for employees and increase annual insurance spend. New City Insurance can implement a customized health plan solution that will maximize insurance savings while increasing benefits that meet the employees’ needs. Call New City Insurance today, or visit us online to learn more.

Have Additional Questions?
Call Today: 888.210.2759
Request a Consultation

Filed Under: Group Health Insurance

Primary Sidebar

Have A Question?

Ask a question or request a consultation, and we will respond to you in a timely manner.
  • This field is for validation purposes and should be left unchanged.

Footer

New City Logo
Corporate Headquarters 600 B St STE 300, San Diego, CA 92101
888.210.2759
info@newcityinsurance.com

Insurance Products

  • Commercial Insurance
  • Pay-As-You-Go Workers Comp
  • Group Health Insurance
  • Workers Comp
  • Self Funding
  • Minimum Essential Coverage

Benefits Consulting

  • 401k & Retirement
  • Employee Benefits Benchmarking
  • Executive Benefits
  • Group Health Insurance
  • PEOs
  • Wellness Plans

HR & Technology

  • Benefits Technology
  • Benefits Compliance
  • Growth Strategy
  • HR & Payroll Integration
  • HR Support

Industries

  • Aerospace
  • Biotech
  • Engineering
  • IT
  • Manufacturing
  • Gas & Oil
Google Rating
5.0
New City Insurance
New City Insurance
5.0
Carol Zhang
Carol Zhang
04:29 06 Mar 22
As a rapidly expanding national media organization, the employee benefits strategy and administration that New City has provided us during our growth has been invaluable. They have been proactive about informing us of the different benefit strategies available to us as we grow as well as managing the additional compliance laws and reporting requirements at each stage of our growth.
Claudia Villalobos
Claudia Villalobos
20:14 03 Mar 22
New City Insurance made navigating through all the health insurances super EASY. Their documents are highly informative, professional, and easy to work with. Thank you for making the process of choosing a health plan so simple. You guys are THE BEST!
Philippe Salas
Philippe Salas
17:02 22 Feb 22
I never expected to have a good time talking to an insurance salesman, but let me tell you Brendan was quite the treat. He was very helpful explaining the options and has a wonderful sense of humor. I hope to speak with him every time I call.
Jennifer Polito
Jennifer Polito
17:15 09 Feb 22
Super easy enrollment process. Fast and friendly customer service. If you are looking for an insurance company that is there for you every step of the way I highly recommend New City Insurance.
Rocky Salas
Rocky Salas
23:46 07 Jan 22
So friendly, I hope to speak to him again in all my future insurance needs.
Rocky Salas
Rocky Salas
23:38 07 Jan 22
So friendly and soft spoken. I hope to speak to him again in all my future insurance needs.
Jose Brena
Jose Brena
13:20 06 Jan 22
Eric Calciano has been extremely helpful in finding and selecting the right insurance coverage for our company. With many options out there Eric assisted us on getting a low cost provider saving more than 20% than from our competitors and providing excellent coverage for our employees.
Anastasia Beaverhousen
Anastasia Beaverhousen
17:05 28 Dec 21
Signing up for insurance was quick and easy. Felicity Sundsboe
SFCC
SFCC
22:08 29 Nov 21
Jeff Stoltey and his team provide excellent customer service. Jeff has always provided my company SFCC with straightforward options. I went to a larger insurance company only to RUN BACK to Jeff at New City Insurance. I recommend them to anyone needing insurance without hesitation.
Kevin Luby
Kevin Luby
19:13 22 Oct 21
Quick, easy & informative. We were able to secure quality insurance for our small business on a tight deadline. Thanks for the help New City.
Theresa Ruybol
Theresa Ruybol
19:30 01 Jul 21
Eric was so great with us. He was very patient and kind as we are a newer smaller organization who is growing rapidly. With that said, we had made our inquiry, he had great rapid response and mostly had to wait on me. Any request that we made and/or questions we had, he was great answering and helping us understand. Then when we were ready for all documents and to move forward, Brendan helped with getting that together and the two of them worked their magic on New City's end to notify me of what was needed, assist me in that process and confirming that all was complete and approved for the coverage. I just want to say thank you all again so much, as insurance has always been confusing to me, and you all made that process go a lot smoother.Thank you
Andrea Ordendorff
Andrea Ordendorff
21:06 07 May 21
I've been working with both Clayton and Brendan for well over a year. As the purchase of our dental practice was delayed well over 14 months they both patiently supported me and continued to make themselves available. When we were officially ready to sign up they made the whole process seamless and super easy. This team is highly knowledgeable, professional, supportive, and efficient! I can't thank them enough for everything they've done.
T W
T W
22:32 30 Aug 20
I love New City Insurance. I never had a good experience dealing with insurance brokers until I started working with Brendan. He’s awesome! He is patient with me and takes the time to answer all my questions. I’m very grateful for all his help and hard work!
Mary Jane Deyette
Mary Jane Deyette
00:57 11 May 20
Jeff Stoltey is so awesome...even thru my company had only two employees, he took the time each year to research and find the best plan for us. The only reason I am leaving New City Insurance is because we no longer have any employees. Thank you Jeff
Alma Ortiz
Alma Ortiz
22:25 23 Feb 20
Brendan was awesome! I couldn't figure out how to pick my plan and he returned my call on a weekend to help me. Outstansing service!
jessica kavanagh
jessica kavanagh
19:53 13 Feb 20
Brendan was so helpful I definitely recommend him if you’re in need of good help and getting it done promptly. Thankyou so much again.
Tricia DeYoung
Tricia DeYoung
19:49 13 Feb 20
I was very thankful I inquired about this info. with Brendan. He was very helpful so I understand the benefits available much better now. Thank you Brendan.
B Bayer
B Bayer
17:43 24 Sep 19
NCI handled almost everything from start to finish. Clayton and Brendan made the plans easy to understand and walked me through the application process. They got me my ID numbers before my cards arrived so that I could keep an appointment I had already scheduled. My last broker wouldn't have done that. 5 stars!
Jessica Lehr
Jessica Lehr
03:36 07 Jun 19
Our staff was interested in a health plan, but we didn't know how beneficial a solid employee benefits package would be for our business to expand. We'd lose prospective employees because they had more options for their medical insurance which was sometimes more valuable than more pay. The New City team was amazing and gave us as many affordable options as possible so that everyone had their needs met.
Mike McClay
Mike McClay
19:36 03 May 19
My employer uses New City as their insurance broker, and I'm always amazed when I call in for assistance by how knowledgeable and attentive their staff is with my requests. Their online benefits platform makes selecting insurance plans pretty darn easy. I would highly recommend their services.
Next Reviews Write a review
powered by Google
Privacy Policy | Terms Of Use