theanimal wrote: ↑Thu Feb 01, 2024 5:04 pm
@iDave-
Your rate is lower because the insuror is able to spread the risk around via a large number of people versus an individual plan. This is why there is the requirement for everyone to sign up at the same time and there needs to be X% of employees participating.
So yes, your plan is cheaper than your younger colleagues who purchase an individual plan. But if there was a group of 21 year olds at the company who got insurance, you would find their rate would be cheaper and your rate is still no more than the 3:1 ratio as the law still applies.
Some states have made their own laws that are even more restrictive, like Massachusetts, where it's 2:1.
I think the major ACA providers are pooling risk as well, they almost have to be for it to work. I'd guess there are between 10,000-30,000 of us in this retiree group spread among the 50 states, compared to about 400,000 covered under ACA in my current state.
My younger former colleagues are paying less. The full costs of their plan is about 25% lower than the retiree plan, and the company pays 70% of the full cost, the employees 30%. Retirees pay the full cost of the retiree plan. The year I retired the total cost of the employee plan for an individual was around $5000/yr (of which the employee paid about $1500) and the retiree plan about $6,500/yr IIRC, all paid by the retiree.
I do believe I might be paying less than younger people buying ACA plans in some places. When I priced them at the end of 2021, I was comparing my retiree option versus Illinois ACA plans for me. The coverage of the retiree plan was marginally better and it was about $250/month cheaper. I didn't bother looking at prices for ages other than my own at the time. I'm fairly confident the ACA plans pool across all ages, but ego listed all the options the providers have to adjust premiums for relevant factors, one being age. I just don't have any insight to whether providers in Illinois actually do that.
The "insurer" for me is my former employer, but they hire one of the major insurance companies to administer it. I pay my premiums to my former employer, not the insurance company. I don't know how many companies do it that way, but that's how my employer did it the entire 34+ years I worked for them. My company was large, ranging from 70,000 us-based employees to well over 100,000 when I retired. I'm guessing the insurance covers 2-3X that number of people when you consider spouses and dependents less those that get their insurance elsewhere (e.g., from their spouse, VA, etc.).