September 17, 2009
Insurance rate information should be released sooner rather than later
Budgets are all about making choices based on the best available information you have at hand.
In a budget you show how much money is coming in and how that money is going to be spent. In a good government budget those numbers equal out at the end. For business and family budgets, the goal is to have more income than expenses when the dust settles.
Regardless of size, you can’t plan a budget without having a good idea of your expected costs for the coming year. The better the estimate of costs and income, the better the final budget. This holds true whether it is a family budget or a multi-million dollar municipal or county budget.
Taylor County’s budget review committee met last week to start plowing through the departmental budget submissions. The county has most of the cost projections in place and the equalized value report was sent out by the state last month to show the county what it had to work with as far as tax base. The big question mark for the county is how much insurance rates will go up in the coming year.
Since two percentage points of insurance increase in the county is roughly equivalent to the wages for a full-time staff position, every bit matters in a year where the county needs to cover a half million dollar hole. Which is why it is frustrating for the county to not have solid numbers with which to work.
The county’s spending plan estimates a 10 percent insurance increase. If that final increase will be 6 percent or 20 percent is known only to insurance company bean counters.
In the private sector the impact of an insurance increase is felt just as keenly if not more.
Private employers are buffeted by economic waves to a greater extent than government and a sharp increase in insurance costs can make it into an unaffordable luxury for businesses to offer. On the family level, health insurance premiums and deductibles often surpass car payments and approach mortgages in eating into the monthly take home income of workers.
Since businesses and families don’t have the luxury of passing on the increases to someone else like governments do, the only way they can handle an increase is to cut back somewhere else or gamble and try to go without. Unfortunately, insurance companies typically wait until the last possible moment to inform customers of a rate increase which leaves little time to plan or make changes.
While a complete overhaul of how healthcare is paid for is the long-term solution, just being able to know and compare rates ahead of time would go a long way in allowing people to make informed healthcare decisions. To this end insurance companies should be required to provide rate information for the coming year by a specific date, such as August 1, which would be well in advance of public sector budget cycles and the end of many private employer’s fiscal year.
You need solid information to set up a realistic budget and to make the tough choices necessary. Standardizing when insurance companies must release rate information would allow more informed decisions to be made at the government, business and family levels.
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