Small group plan, high cost member

I own a small business and offer health insurance to my 22 employees and their families.  The wife of my operations manager was just diagnosed with kidney disease. (I realize I’m not supposed to know medical information about employees or family members, but it’s a small shop and we’re like family.)  She is now on dialysis, which I assume is very expensive.  What will happen to our health insurance rates next year?  Will they go sky high because of the bills for her care?  I’m worried that I won’t be able to continue offering health insurance, if the rates get a lot higher.  What should I do?

Want to Do the Right Thing

Dear Want to Do The Right Thing,

You are about to witness exactly what health insurance is meant to do: protect people from the high cost of medical care.  Your business buys what is called a “small group” plan: it has fewer than 50 employees enrolled.  The insurer cannot base the small group rate on the employees’ health or medical bills.  They can only take into account the industry of your business, location, number of people, and tobacco use.

Dialysis costs around $17,000 per year, according to the United States Renal Data system.  That is certainly not cheap, but there is an end to it.  If your employee’s wife qualifies, she will get Medicare coverage for her kidney disease.  For 30 months, your group plan will pay first and Medicare will pay second.  That is, Medicare will pay for bills related to her kidney care that your plan does not pay.  After the 30 months, Medicare will pay first and your group plan will pay second. Your plan’s costs for her care will shrink dramatically at that point.

Her doctors and kidney dialysis provider are undoubtedly well versed in the Medicare system and will get her enrolled.

So, in this case, doing the right thing is just a matter of breathing a sigh of relief.  Your rates will not be affected and your employee’s wife will be taken care of.


Linda Riddell

About Linda Riddell

A published author and health policy analyst with 25 years’ experience, Linda Riddell's goal is to alleviate the widespread ailment of not knowing what your health plan can do for you.