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State high risk pool premium increase
Old 06-30-2010, 03:37 PM   #1
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State high risk pool premium increase

DW has health insurance coverage through our state high risk pool. The pool charges 2X the market rate and adjusts premiums every six months. Over the three+ years she's had coverage, rates have increased been between 2% and 7% each time they were bumped - until now.

The program offers four basic polices with deductibles of $1,000, $2,500, $5,000 and $7,500. The latest announced increase moves rates up 10% except for the $7,500 deductible which is unchanged. (In case you are wondering, the new monthly premium for a non-smoking female over 60 is $1,130, $812, $623, and $496 respectively.)

This is obviously an attempt at encouraging pool participants to choose the highest deductible offered. I wonder if this was influenced by the new health care legislation or is simply an attempt to control program costs?
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Old 06-30-2010, 03:47 PM   #2
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Who would seriously take the $1130/month option over the $496/month option to reduce their deductible by $6,500?

$1,130 - 496 = $634 x 12 months = $7,608/year less in premiums

If the benefits are half-decent, $496/month isn't bad at all for someone 60+ years old.
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Old 06-30-2010, 03:51 PM   #3
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I understand the cost/benefit analysis of the premiums vs. the deductibles. The point of my post was to ask if this change in rate policy was attributable to the new health care legislation.
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Old 06-30-2010, 03:54 PM   #4
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Nobody knows. Maybe some of it, maybe not. Could have been planned 6 months ago, could have been planned 2 weeks ago. Those rates increase percentages are actually pretty low compared to the market average.
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Old 06-30-2010, 03:55 PM   #5
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I am just wondering - are those rates different in different states?
How would this compare to CA...
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Old 06-30-2010, 04:00 PM   #6
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As I understand it the states who have a high risk pool set their own rates. You might be able to check rates here: States That Have Risk Pools
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Old 06-30-2010, 04:05 PM   #7
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Also, how can one find out or know that he will need to have a high risk pool? Only, after being denied coverage by an insurance company?

Is high blood pressure or cholesterol automatically "qualify" you and tell that you may need to have a high risk pool?
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Old 06-30-2010, 04:10 PM   #8
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Originally Posted by wanaberetiree View Post
Also, how can one find out or know that he will need to have a high risk pool? Only, after being denied coverage by an insurance company?

Is high blood pressure or cholesterol automatically "qualify" you and tell that you may need to have a high risk pool?
Different states have different rules. Some states that have risk pools aren't accepting any new applicants right now. Blood pressure and cholesterol probably won't get you into a high risk pool, but if you were declined because of those two in combination with other health risks (smoking, overweight, etc), it may work. What state are you in?
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Old 06-30-2010, 04:11 PM   #9
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California

I don't need to have a high risk pool, I want to understand how it works.
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Old 06-30-2010, 04:18 PM   #10
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California

I don't need to have a high risk pool, I want to understand how it works.
http://www.davefluker.com/MRMIPBRO_2010.pdf

There you go - all you could ever need to know about California's high risk pool. $2200/month for a family with a 55 year old parent. That sounds pretty affordable. Oh, and there's a 2-3 month waiting list to get in.
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Old 06-30-2010, 09:15 PM   #11
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Originally Posted by REWahoo View Post
DW has health insurance coverage through our state high risk pool. The pool charges 2X the market rate and adjusts premiums every six months. Over the three+ years she's had coverage, rates have increased been between 2% and 7% each time they were bumped - until now.

The program offers four basic polices with deductibles of $1,000, $2,500, $5,000 and $7,500. The latest announced increase moves rates up 10% except for the $7,500 deductible which is unchanged. (In case you are wondering, the new monthly premium for a non-smoking female over 60 is $1,130, $812, $623, and $496 respectively.)

This is obviously an attempt at encouraging pool participants to choose the highest deductible offered. I wonder if this was influenced by the new health care legislation or is simply an attempt to control program costs?
I could be completely wrong, but I think this has less to do with the new health care legislation and more to do with where insurance companies are able to predict how/when they can make the profit. I have seen this same phenomena the past few years with DH's insurnace through work. The higher the deductible, the less (if any) increase.

My guess is fewer people exceed a $7500 deductible than a $1000, so the insurer can afford to charge less for that coverage - as they will have less to pay out. Especially given that people with chronic medical conditions are much more apt to go with the lower deductible.....and the healthy people are more apt to go with the higher deductible.
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Old 06-30-2010, 09:21 PM   #12
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"$2200/month"

I will change my FIRE assumptions :-)
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Old 06-30-2010, 09:23 PM   #13
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I could be completely wrong, but I think this has less to do with the new health care legislation and more to do with where insurance companies are able to predict how/when they can make the profit.
Could very well be the case but I thought it odd they'd not done something like this prior to the recent legislation. Might be nothing more than coincidence.
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Old 06-30-2010, 10:27 PM   #14
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Originally Posted by REWahoo View Post
DW has health insurance coverage through our state high risk pool. The pool charges 2X the market rate and adjusts premiums every six months. Over the three+ years she's had coverage, rates have increased been between 2% and 7% each time they were bumped - until now.

The program offers four basic polices with deductibles of $1,000, $2,500, $5,000 and $7,500. The latest announced increase moves rates up 10% except for the $7,500 deductible which is unchanged. (In case you are wondering, the new monthly premium for a non-smoking female over 60 is $1,130, $812, $623, and $496 respectively.)

This is obviously an attempt at encouraging pool participants to choose the highest deductible offered. I wonder if this was influenced by the new health care legislation or is simply an attempt to control program costs?
I can't answer your question, but I am floored by the numbers. I just checked my own state's high risk pool's health insurance program and I am having some sticker shock. At our age (36), it would be about $6,000 per year and per person with a $4,000 deductible (and a 20% co-pay!). If we both had to join the high risk pool, it would cost $20K+ per year just for medical in a bad year. Add some for dental/vision and we might need to save $1M, just to fund health-related expenses. That's ridiculous. I was planning $10K/year at age 40 ramping up to $20K/year at age 60, but that seems way too optimistic.
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Old 06-30-2010, 10:30 PM   #15
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I can't answer your question, but I am floored by the numbers. I just checked my own state's high risk pool's health insurance program and I am having some sticker shock. At our age (36), it would be about $6,000 per year and per person with a $4,000 deductible (and a 20% co-pay!). If we both had to join the high risk pool, it would cost $20K+ per year just for medical in a bad year. Add some for dental/vision and we might need to save $1M, just to fund health-related expenses. That's ridiculous. I was planning $10K/year at age 40 ramping up to $20K/year at age 60, but that seems way too optimistic.
Now if only there was a way to buy a $5k family deductible HSA plan and limit your premiums to a few thousand bucks a year...oh wait, Obamacare put a stop to that one.
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Old 06-30-2010, 10:44 PM   #16
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Now if only there was a way to buy a $5k family deductible HSA plan and limit your premiums to a few thousand bucks a year...oh wait, Obamacare put a stop to that one.
You can still get that kind of deal in my state ($1,512 per year and per person -36-year old- with a $1,500 deductible and relatively low co-pays), but not if you are deemed high risk.
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Old 06-30-2010, 10:46 PM   #17
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You can still get that kind of deal in my state ($1,512 per year and per person -36-year old- with a $1,500 deductible and relatively low co-pays), but not if you are deemed high risk.
You can now. Wait until 2014.
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Old 06-30-2010, 11:11 PM   #18
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Health Care

New risk pool info is up...sort of. No rates or benefits posted yet. I'll put the over/under on the enrollment time before capping the number of people at about 12 days. California will be insuring 25,000 people on the new risk pool. PA will have 5,600 people. IL will have 5,000 people. I'll make an educated guess and say the demand will exceed the supply just a tad.
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Old 07-01-2010, 12:16 AM   #19
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Could very well be the case but I thought it odd they'd not done something like this prior to the recent legislation. Might be nothing more than coincidence.
I forget the attribution and I'm probably mangling the quote, but we shouldn't ascribe to conspiracy what could be explained by stupidity...
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