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Were BUPA blocked from public sector group schemes?
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[Originally posted at Dan Sullivan]
Part of the basic problem with risk equalisation as the government have chosen to implement it is that the vast block of older people with health insurance who simply didn’t move. Why was that?
Could it be that many people are actually members of group schemes rather than individual members and it is at this top level of those who selected which schemes were available that the choice has been made not to move. For example, taking just the teaching sector, the TUI and INTO appear from their websites have only VHI group schemes, whereas the ASTI seems to have a 10% saving for both VHI and BUPA, though their site only hosts a document related to VHI finances but not one for BUPA. Why would public sector organisations be favouring the VHI, I wonder? It would also seem that SIPTU also has only a group scheme link-up with VHI.
It would be illuminating to know the extent to which public sector organisations are locked into group schemes with VHI and employees were not offered an option to choose between the 3 competitors.
I suppose the question in focus should be, did large organisations, which had links with the VHI and a vested political interest in the concept of a state operated monopoly insurer, refuse to allow BUPA pitch for their group schemes?
This is a good question which brings to mind another one — are the insurance premiums the same for individual versus group policies? In other words, does a participant in a group scheme pay the same on a per head basis as if they bought the policy themselves? In the US, the pricing differentials are massive, even after taking account of the fact that employers are usually paying some portion of the premium in a group scheme.
Group schemes typically have a discount of about 10% compared to the individual cost.