Health insurance rate increase

[Zoocat]

Today I received notice that my monthly rate is increased by $70/month! A twenty-five percent increase! From $281 to $351. I already have a $2700 yearly deductible and a few exclusions.

The rest of the message told me not to take it personally. Thanks guys! I've only had this policy for one year and now I'm wondering if they will sock it to me again next year when I turn 60. I really don't have any other alternative, since I had a difficult time getting any independent insurance policy at all with my incidences of basel cell.

My company is World Insurance that runs Great West PPO here in Colorado.

What's been your experience with rate increases as you have aged?

 

[W2R]

How awful!! Is that even legal? (pardon my naivete!)

I wonder what they would charge if (heaven forbid) you developed other medical problems.

Maybe I should THANK you for pointing this out, since my resolve to continue working another 18 months solely for lifetime medical has been crumbling a bit around the edges...

 

[Rustward]

25% in a year is quite a lot!

Want2, I know very little about your situation, (and perhaps less about health insurance ), but if another 18 months will get you lifetime medical, that is probably a really good deal if you can get through it. When faced with things like "another 18 months", sometimes looking back the same length of time seems to make that length of time seem shorter.
18 months ago it was almost January 2007, which does not seem like a long time ago. I dunno...works for me.

 

[W2R]

Thanks, Rustward. I know it's the sensible thing to do though some days at work are a whole lot harder than others (like today). I only have 527 more days and I had around 1000 days when I showed up on this board. So, I'm about halfway there. I started counting days at 2350 or so, and compared with that 527 doesn't seem so bad.

 

[nwsteve]

OB
Don't feel bad--ours went up 34%--we crossed that decade marker--60. I think your concern about next year is well place.
Our policy is a 1k deductible with Regence Blue Shield. Get this, increasing the deductible to 5000 saves a whopping 3%. Good deal for insurance company--cut exposure by 5 times and collect 3% less premium. Not happy and shopping aggressively but nothing qualifies as good choices. Enjoy you look at high deductible plan and some HSAs
nwsteve

 

[KB]

My insurance had an increase like yours when I hit 55. I changed to an HSA and dropped my premium lower than it was when I Was 54. The coverage is what I need, so I didn't lose anything in the change.

 

[DangerMouse]

Scary how they can do whatever they want to your premium and you are powerless to change.

I didn't think that the basal cell would have that much difference on premiums, which shows how naive I am.

 

[ziggy29]

Yeah, inflation is at about 3%. Right.

 

[ls99]

FWIW,
I bailed out 7 years before eligible for full retirement pension from employer. Most there are under the impression that at the official retirement age of 65 they will have same continuing medical insurance benefits. The facts are quiet different.
At 65 while getting full pension, the state medical coverage becomes secondary or tertiary at some cost. A small detail, there must be sufficient pension from which to deduct the cost. The retiree gets shuffled into Medicare. I found this out when reading the personnel policies and procedures. Then attended a retirement seminar given by human resources where a lawyer, benefits manger, and medical insurer's rep. laid out the facts and details.
That knowledge helped me out with ER decision. Was willing to go for COBRA, which I exhausted. Now in PA BC/BS with no pre-existing exclusion, roughly $3000.- out of pocket deductibles, $590/mo individual policy.

It is expensive, but for me knowing that if stayed to 65 and would loose the full medical coverage I had , I accepted the expense. 2 yrs RE at this time.
Since I left the type of coverage I had was done away with for a good bit inferior system.

 

[Zoocat]

34% at 60! Hope that's not in my future.My policy is a HSA with a high deductible. The basel cell is excluded. The company didn't pay out a dime to me this year.

 

[DangerMouse]

They didn't pay anything out yet they have the right to increase your premium. This is a crazy world we live in.

In Australia, with private health insurance, everyone pays the same premium. If you have an existing condition, it is excluded from coverage for the first 12 months to stop people joining, getting immediate treatment and then cancelling their coverage. They can't refuse coverage due to basal cell. It does make me feel relieved to know when we are no longer working we will not be looking for medical coverage under the US system as I am sure we will struggle to get any coverage.

 

[SC]

You're not alone. We have a policy with a 5K deductible that has increased every six months: $230/mo -> $270/mo -> $330/mo -> $380/mo. I just increased the deductible from 5K to 10K in order to get back to the $270/mo level. (We've never hit the deductible so they've never even paid a dime in claims.)

Switching isn't an option because other carriers won't cover some (very minor) pre-existing conditions. For example, my wife saw a chiropractor for a few months to help with a sore back, and that caused two carriers to permanently exclude coverage for anything related to her spine and related areas. The third carrier merely excluded coverage for five years, so we went with them.

I never thought the minor (and in my mind, fairly typical) health issues we've had in the past would be considered "pre-existing conditions" and cause us problems in obtaining coverage, but here we are.

Off-topic rant: After we fully disclosed our medical records and gave our insurance company permission to review whatever information was on file for us, and about six months after they first issued us the policy, I had the audacity to submit a claim for my annual physical exam. This caused them to go on a fishing expedition, asking my present and past doctors for more information about any other pre-existing conditions that they could use to deny the claim -- despite the fact that my checkup was about $300 and we have a $5,000 deductible. They even lied to my former doctor's office and said the information was needed to pay them for a claim (this way, they wouldn't have to pay the doctor's office fees for photocopying and mailing records.) That really pissed me off.

While I was working and covered by various employers' insurance plans, I never fully appreciated how broken our health insurance system really is. People who don't have coverage from their employer and are too young for Medicare are at the mercy of a handful of large and uncaring insurance companies. I predict (and hope) that any politician with a real plan to fix this mess is going to be swept into office.

 

[Zoocat]

SC, that is exactly my experience with one of my exclusions. A minor neck ache with a diagnosis of a compressed cervical disk seven years ago which has never caused a bit of trouble since resulted in permanent exclusion for anything to do with the spine.

Your insurance company's behavior is outrageous. Would you mind giving us the name?

 

[copyright1997reloaded]

They didn't pay anything out yet they have the right to increase your premium. This is a crazy world we live in.

In Australia, with private health insurance, everyone pays the same premium. If you have an existing condition, it is excluded from coverage for the first 12 months to stop people joining, getting immediate treatment and then cancelling their coverage. They can't refuse coverage due to basal cell. It does make me feel relieved to know when we are no longer working we will not be looking for medical coverage under the US system as I am sure we will struggle to get any coverage.

NY State is similar, i.e. "Community Rated" (same premium for all regardless of age/sex/health status) and "Guaranteed Issue" (with some exceptions, can't refuse coverage). That's the good news. Now, here's the problem. For a family of three, this non-group plan coverage would cost me anywhere from $1900+ (PER MONTH) from the least expensive HMO to $3950+ (PER MONTH) for the most expensive PPO plan.

In SWR terms, that 2k/month => 24k/year => 600k in after-tax assets required just to pay the health care premiums, not counting the co-pays, etc. To make matters worse, that 600k assumption is suspect because the rate of inflation for health care premiums certainly has been greater than 3%.

For those morbidly curious, here's the link:
Premium Rates for HMO Standard Individual Health Plans by County

 

[SC]

Your insurance company's behavior is outrageous. Would you mind giving us the name?

I'll send it to you via PM. They have deeper pockets and more lawyers than I do. However, from my conversations with the receptionists at both doctors' offices, these fishing expeditions (and attempts to get records without paying for them) have been seen frequently from other insurance companies too.

 

[rogersteciak]

What's been your experience with rate increases as you have aged?

I took out my high-deductible policy in 2004. By 2006, the premium had doubled due to my crossing into a new age bracket and higher expenses of the insurance company. The premium remained unchanged throughout 2007. Then I received notice of a 25% hike this week to take effect in July, the reason cited being higher expenses of the insurance company. I have never filed a claim on this policy.

I had a similar experience with a difference health insurance policy I took out in the mid 1990s. The premiums went up four-fold over a 10-year period (which is why I switched to the high-deductible policy in 2004 -- to save money). I never filed a claim on this earlier policy either.

 

[REWahoo]

I took out my high-deductible policy in 2004. By 2006, the premium had doubled due to my crossing into a new age bracket and higher expenses of the insurance company. The premium remained unchanged throughout 2007. Then I received notice of a 25% hike this week to take effect in July, the reason cited being higher expenses of the insurance company. I have never filed a claim on this policy.

Yikes! Your experience reinforces what probably lies in store for us.

DW and I came off COBRA in December of 2006 and each got individual high deductible policies (hers from the state high risk pool). In the 18 months since, each policy has gone up a total of 35%, including the big jump we both got hit with when turning 60. Hers adjusts every 6 months and is due for another bump in July - don't know how much yet but the past two adjustments were a little over 7%.

 

[Rich_by_the_Bay]

Just found out my already-expensive policy (traditional, family, $967 per month, good coverage) will be going up about 5% in July. It's a self-insured state group, and BCBS is just the "fiscal intermediary." I'm relieved.

The high deductible plan is only about $2400 per year less in premiums; not worth it by the time I fund the HSA.

 

[DallasGuy]

I've had individual health insurance policies in the past and my experience of high annual premium price increases seemed to be very common. While I'm not for socialized medicine, it seems that some government policies should be set in place to make health insurance companies run more like a utility company where they apply for rate increases based on inflation. Otherwise, they can charge whatever they want and many time people with pre-existing conditions are pretty much stuck paying the huge increases. Those that are healthy, move on to another company to get a lower premium, leaving mostly higher risk customers behind....which probably results in the premiums going even higher eventually. The whole thing is a big mess in my opinion.

 

[Dawg52]

The whole thing is a big mess in my opinion.

To say the least. My premium has gone up 6% per year on average. Should be interesting to see how it goes from here.

 

[DallasGuy]

Switching isn't an option because other carriers won't cover some (very minor) pre-existing conditions. For example, my wife saw a chiropractor for a few months to help with a sore back, and that caused two carriers to permanently exclude coverage for anything related to her spine and related areas. The third carrier merely excluded coverage for five years, so we went with them.

I never thought the minor (and in my mind, fairly typical) health issues we've had in the past would be considered "pre-existing conditions" and cause us problems in obtaining coverage, but here we are.

It sort of makes a person think twice about going to the doctor for anything because it may result in a new pre-existing condition. Pretty sad. The health insurance system in the US is in need of an overhaul.

I had a bleeding ulcer back in 1994....a one time occurrance. No insurance company will cover me for that type of ailment, even 14 years later.

 

[rogersteciak]

Yikes! Your experience reinforces what probably lies in store for us.

Here are some numbers. In 1996, I took out a medical and dental plan for $400 a quarter, or $1600 a year (I signed up for the maximum deductibles possible). By 2004, the premium had increased to $2225 a quarter, or $8900 a year. I never used the medical, but did use the dental. The two types of coverage were separate line items on the bill, but the total increased five-fold over an 8 year period (the CAGR is around 24%). The insurance was obtained through a company that was contracting with the National Association for the Self-Employed (nase.org).

Then in 2004, I got a medical-only high-deductible plan for $158 a month, or $1900 a year (maximum deductibles possible). During 2006, the premium went from $190 a month at the beginning of the year to $246 a month at mid year to $316 a month by year end. Earlier this month, I received notice the premium would go from $341 a month to the new value of $421 a month (effective in July), or $5,050 a year. I've never filed a claim on this policy, but there was a 2.5x increase over a four year period (the CAGR is around 27%). The insurance company is Blue Shield of California.

Only one of these increases since 2004 was to due to age bracket change. The rest were due to higher costs for the insurance company. I wonder how one could hedge against these increases. One approach might be to buy a basket of health care stocks (theoretically, at least, it's worth looking into), but requiring a CAGR in excess of 25% is a high hurdle rate to overcome (Warren Buffet's track record over the past 40 years is a CAGR of 24%).

 

[Alan]

All these stories are scary. Like W2R I am hanging onto my current job for 20 months to get the retiree medical benefits, but I work for a Megacorp who is currently being bought by another Megacorp and retiree benefits are a big concern for everyone so I may be still be disappointed and have to do my own thing.

I am already at the stage of being afraid to go to the docs for things like back ailments in case that screws me for life should I have to go it alone. I had back surgery 18 years ago and even though I have never been to the docs with back problems since then I expect that will rule me out of coverage for spinal problems should I need to find my own coverage.

 

[W2R]

All these stories are scary. Like W2R I am hanging onto my current job for 20 months to get the retiree medical benefits, but I work for a Megacorp who is currently being bought by another Megacorp and retiree benefits are a big concern for everyone so I may be still be disappointed and have to do my own thing.

I am already at the stage of being afraid to go to the docs for things like back ailments in case that screws me for life should I have to go it alone. I had back surgery 18 years ago and even though I have never been to the docs with back problems since then I expect that will rule me out of coverage for spinal problems should I need to find my own coverage.

The idea of working for 20 months to get medical benefits and then not getting them would make me really, really furious! I hope that doesn't happen to you. I am already trying not to be resentful that I have to work that long for medical when, a few years ago, early retirees could just get private insurance for a reasonable price and didn't have to wait. It seems like health care in the U.S. is in limbo and unpredictable at this time.

Not going to the doctor for fear of getting screwed out of future coverage isn't healthy, though. Yet the whole point of coverage is to keep you healthy. You're stuck between a rock and a hard place, as they say.

 

[Alan]

The idea of working for 20 months to get medical benefits and then not getting them would make me really, really furious! I hope that doesn't happen to you. I am already trying not to be resentful that I have to work that long for medical when, a few years ago, early retirees could just get private insurance for a reasonable price and didn't have to wait. It seems like health care in the U.S. is in limbo and unpredictable at this time.

Not going to the doctor for fear of getting screwed out of future coverage isn't healthy, though. Yet the whole point of coverage is to keep you healthy. You're stuck between a rock and a hard place, as they say.

It's not just the health benefits that we are concerned about, there is a very good chance that the pension benefits will be seriously messed with. We are the only business in the existing Megacorp where early retirement can be taken at 55 (if you have at least 25 years service at 55) - the rest of the businesses it is 60. It is expected that the new Megacorp will, at minimum, change our business to be in line with the rest. So far the SEC has delayed the buyout by 6 months over monopolies concerns and I'm hoping it will be delayed more while new Megacorp sells some of its sites before it is allowed to conclude the deal.

I'm leaving at 55 regardless. If an ER pension is not available and no health insurance then it will cost me approx. $500k in lost pension income plus whatever extra I'll have to pay in health insurance over the years. So, yes, I'll be really ticked for a while, but that's life and I'm not going to bear any grudges, I have been extremely blessed and fortunate so far in life.