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Health Insurance Profit

The dysfunction in the US healthcare system, especially around how everything gets paid for is well known. My health "insurer" [1] Anthem Blue Cross of California, a subsidiary of publicly traded Wellpoint has a new way [2] of bumping their profits.

They aren't allowed to do premium changes targeting individuals, but can do it for groups (eg age ranges, geographical areas). They group people into age ranges (eg 40-44, 45-49). When your age changes into the next range up you get a ~25% premium increase [3]. The clever bit is that they don't actually wait until your birthday and instead increase the premiums near the beginning of the year. Consequently a 39 year old pays the increased premiums of a 40 year old for on average 6 months. Across their customer base this adds up quickly.

California has a regulatory agency Department of Managed Healthcare who are the regulatory agency for my plan, so I submitted a complaint to them. Sadly I got the usual nonsense in return. Like many customer support organisations, they have 10 answers and no matter what the issue the goal is to give you the closest answer to your question no matter how relevant it actually is. The answer to me was about how they aren't a regulator, plans aren't regulated etc, which is rather comical given just how often they describe themselves as exactly that. At this point I give up and pay the penalty for having a birthday late in the year. Score one point for the system.

On the technical side, the DMHC approach is beyond comical. There is lots of use of the word "secure" as in "secure web portal" and "secure email". Their response to me was an email that looked exactly like malicious emails. It was an envelope image with "click here" in the middle, and no other information about sender, why I would want to, or what the heck was going on. It was only by examining the email headers and additional digital sleuthing I was able to work out that it was actually a legitimate email. Clicking the link gave an error while copying and pasting it into the browser worked. It then proceeded to force me to setup a username and password to read the email. I finally got to read the email answering something I didn't ask, and ignoring my actual issue. When I later wanted to reread the answer, reproduce it here etc I couldn't. I kept being told I had to go to my "Inbox" to do so without any indication as to where (or what for that matter) that inbox is. I also noted how several pages had a footer saying Copyright 2011 Microsoft. Nothing says "secure" like "we haven't updated this in many years".

[1]What is provided doesn't really resemble actual insurance, and is closer to a payment and costs obfuscation mechanism.
[2]Compare to the old ways and look at how many times they have been fined.
[3]This is in addition to the historic 22% annual increases.

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