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Insurer: On watch for premium hikes

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As president and CEO of Cox HealthPlans, Jeff Bond is accustomed to working in an industry built on the premise that healthier people pay for the sick.

“For the last two years, of all the people that we insured, 87 percent had claims under $5,000 (and of those) 42 percent (had) claims under $500,” he said. “The rest of the money went to people who had large claims. Maybe 8 percent of our insured population accounts for 65 percent of our costs.”

He knows that reform will change that.

Some changes – the elimination of lifetime benefits maximums and removal of pre-existing conditions for those under age 26 – will hit later this year. The pre-existing conditions provision will apply to all individuals by 2014.

“There (are) people who apply for our coverage that we don’t have to accept and we don’t accept. When that goes away,” Bond said, “we will be putting people in our risk pool … who will begin to have large claims immediately.”

Resulting higher claims costs could subsequently raise premiums and create another potential problem of people who enter and exit the risk pool based on their needs.

A good example, he said, is children’s ear tubes, which cost about $3,600. “If people know they can be accepted for coverage (to) get that care and drop off, that keeps me up a little bit,” he said.

Reform isn’t all gloom and doom for Bond, in that it’s generating discussion.

“Everybody talks about health care and health insurance, and I don’t know one person who said, ‘This is sustainable. This will work forever,’” Bond said. “Health reform has started this national conversation about health care costs. ... We will, one way or another … come up with a better system than we have today.”[[In-content Ad]]

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