Like most employers, the City of Philadelphia, MS, will be seeing the cost of health insurance for its employers increase next year. What’s unique about this story, however, is how clearly it describes the challenge faced by municipal employers who do business with UnitedHealthcare. After United initially proposed a 19 percent increase to the city, the two sides eventually agreed to a 9 percent increase—a pretty steep hike for a municipal government’s budget in normal times, and especially now. According to city officials, they didn’t have much choice: United and BlueCross BlueShield of Mississippi are the only major carriers that write group health insurance policies in Mississippi, so the city didn’t have much leverage. United was likely quick to point out that in the first eight months of 2020, the city paid United $300,000 in premiums while United paid out $409,000 in claims, a 136 percent loss ratio to United. But that loss of $109,000 reflects only 0.00004 percent of United’s 2020 profits. We expect to see a lot more of this in 2021 as United continues to squeeze local employers for every penny.
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