Why does health insurance vary state to state

[teejayevans]

Subject says it all, why is it so state dependent?

If I go with blue cross for example, it appears that moving
to another state will require that I cancel and reapply?

If I have the following scenario:
healthy, get relatively low insurance, year later I develop
diabetes which will require ongoing health expenses
for the rest of my life. Now I want to move to another state,
but even if I stay with the same company, will I be under the
old plan or do I have to switch and may be considered not
insurable?

Tom

 

[Rich_by_the_Bay]

It varies from state to state for lots of reasons, IMHO, but mostly because it can.

Insurers look at cost, population risk, etc. but once boundaries are set which determine that a sufficient profit can be extracted, they will charge what the market will bear.

The health care enterprise contributes to the cost run-ups in some areas by over-ordering tests and treatments, and this is regional. Reasons include greed, perceived litigation risk, and patient demand.

It's so complicated as to be nearly incomprehensible.

 

[Sandy]

I would add to Rich's comment about regional differences in the practice of medicine to say that each state has different regulatory criteria, mandating different service coverage, different reserves, etc. Also each state has different population groups and associated actuarial risks (Florida's population doesn't look much like Iowa or Maine and those two states don't look like each other). So, from the insurance industry perspective, each state is a different market.

 

[al_bundy]

every state has it's own insurance regulatory system and there are requirements on what has to be covered in some cases.

 

[mykidslovedogs]

However,

There are many carriers that will not require you to re-apply if you move. Namely.....Humana, Golden Rule by United Healthcare, Celtic Insurance, Assurant Health. When you move, you simply change your address with these carriers, and your rates will likely change based on the market that you move to, but you will not be subject to underwriting again.

 

[brewer12345]

every state has it's own insurance regulatory system and there are requirements on what has to be covered in some cases.

Ding ding ding, we have a winner! Every state has its own set of insurance laws, accounting regulators, etc.

 

[teejayevans]

However,
There are many carriers that will not require you to re-apply if you move. Namely.....Humana, Golden Rule by United Healthcare, Celtic Insurance, Assurant Health. When you move, you simply change your address with these carriers, and your rates will likely change based on the market that you move to, but you will not be subject to underwriting again.

Good info, thanks.
Tom

 

[mykidslovedogs]

For those who think a single payor system is better....

http://www.nahu.org/legislative/single/sp-myths-summary.pdf

http://www.nahu.org/legislative/single/SinglePayerStandard.ppt

 

[Rich_by_the_Bay]

For those who think a single payor system is better....

NAHU = National Association of Health Underwriters, for those who are curious as to the source.

 

[teejayevans]

NAHU = National Association of Health Underwriters, for those who are curious as to the source.

Not exactly a fair and balance source
Tom

 

[FIRE'd@51]

However,

There are many carriers that will not require you to re-apply if you move. Namely.....Humana, Golden Rule by United Healthcare, Celtic Insurance, Assurant Health. When you move, you simply change your address with these carriers, and your rates will likely change based on the market that you move to, but you will not be subject to underwriting again.

Is this true for these companies, in general, or do you have to move to a state where they do business? For example, if you take out an insurance policy from Assurant in Colorado, then move to NY, will Assurant still cover you under the same policy?

 

[mykidslovedogs]

Not exactly a fair and balance source
Tom

There is no fair and balanced source for single payor vs. private, but the points that NAHU makes do seem to have some validity if you are willing to at least read what they have to say and not discount the articles just because of the source. I think to make a sound judgement, both sides need to be taken into consideration. I have read many, many articles on single payor, and the points mentioned in these articles are never mentioned by single payor advocates PARTICULARLY the fact that the Canadian system DOES NOT provide Rx coverage in their universal plan.

I ask, would MOST Americans want to buy a policy that has NO coverage for prescriptions (no out of pocket cap for prescription costs)? It is also never mentioned that Canadians still have to pay a premium ON TOP of TAXES to their goverment amounting to about $125.00/mo. That is, in addition to a tax rate that is, on average, 40% higher than what we pay here in the USA. And...they still have to wait an AVERAGE of 17 weeks for many services, and it is ILLEGAL for them to try to pay a doctor privately if they want to move up on THE LIST.

 

[mykidslovedogs]

Is this true for these companies, in general, or do you have to move to a state where they do business? For example, if you take out an insurance policy from Assurant in Colorado, then move to NY, will Assurant still cover you under the same policy?

For any insurance carrier, you would have to move to a state where they do business. The ones I mentioned above do business in a majority of states, so there is a lot more flexibility with those carriers if you have to or want to move.

 

[FIRE'd@51]

For any insurance carrier, you would have to move to a state where they do business. The ones I mentioned above do business in a majority of states, so there is a lot more flexibility with those carriers if you have to or want to move.

I was pretty sure you were going to say this. I think this system with 50 different sets of state regulations, etc, is insane in an age where the US population is so mobile. I just don't understand why the insurance industry doesn't get behind some type of proposal that would streamline the system and make it more uniform from state to state. Other than re-setting the premiums to reflect the cost of medical care in different geographical areas, I see no reason why the system can't move toward one where the policies are completely portable (like life insurance). Once you have health insurance, you should never lose it, so long as you keep paying the premiums, and you should be free to move to anywhere in the country without re-underwriting.

 

[Rich_by_the_Bay]

I think this system with 50 different sets of state regulations, etc, is insane in an age where the US population is so mobile. I just don't understand why the insurance industry doesn't get behind some type of proposal that would streamline the system and make it more uniform from state to state.

That's a good point. Changing where you live in retirement so you can keep your health insurance is not an acceptable system to me. Bye, kids, see you next Xmas -- gotta move so I can get health insurance? Don't think so.

 

[mykidslovedogs]

I was pretty sure you were going to say this. I think this system with 50 different sets of state regulations, etc, is insane in an age where the US population is so mobile. I just don't understand why the insurance industry doesn't get behind some type of proposal that would streamline the system and make it more uniform from state to state. Other than re-setting the premiums to reflect the cost of medical care in different geographical areas, I see no reason why the system can't move toward one where the policies are completely portable (like life insurance). Once you have health insurance, you should never lose it, so long as you keep paying the premiums, and you should be free to move to anywhere in the country without re-underwriting.

Right, but with Assurant, you still can move to another state without having to go through re-underwriting, just as long as they do business in that state, and fortunately, Assurant, and several other carriers do business in nearly every state. I think part of the problem you run into with having all control at the Federal level, from a private insurance standpoint, is that it would be difficult if not impossible for most carriers to create nationwide networks of Doctors across the USA. Nationwide indemnity (any doctor) plans would have no mechanism for cost control, so the HMO and PPO concepts are what helps keep health care costs under some kind of control.

Right now, the USA and Canada spend almost the same pecentage of GDP on Federally funded medical care. What makes up the additional amount of spending in the USA is in the private sector. If people did not have the option to buy healthcare privately at all, just think of the access problems we would have. It wouldn't be a matter of whether or not we could qualify for coverage in another state, or even if we could pay for the services out of our own pockets..instead...it would be a matter of whether we could have the services we want or need AT ALL!

 

[brewer12345]

That's a good point. Changing where you live in retirement so you can keep your health insurance is not an acceptable system to me. Bye, kids, see you next Xmas -- gotta move so I can get health insurance? Don't think so.

I agree thata the current system makes no sense. However, for those of us who may have to contemplate buying our own insurance at some point, having regulatory schemes taht have different rules in different places is of some use. If I am in good health when I RE, I can move where I please, especially to a low cost state with cheap insurance (maybe CO, for example). If I have some sort of health issue, I can stay in a guaranteed issue state (may not be cheap, but at least it will be available).

Any sort of federalization for the insurance industry as a whole generally egts shot down by the cacophony of interest groups that liek things the way they are. I am not hoding my breath for a change in my lifetime.

 

[mykidslovedogs]

I guess if all doctors decided one day to stop contracting with insurance carriers, then you all wouldn't have to worry about which state you move to. It seems to me that it's not really the insurance carriers fault nor even the state regulations that are the problem here. Why don't we just ask doctors to stop contracting with insurance carriers? if they all banded together and boycotted the insurance companies, then maybe we wouldn't have this state to state portability problem....the insurance carriers would just have to pay whatever the doctors charged.

There must be some kind of "capitalistic" reasons why doctors contract with insurance carriers....

Could it be that doctors are willing to accept discounted pay because...

1.) ...Networking with insurance carriers is a great way for doctors to get referrals when they are fresh out of college....
2.) ...If they didn't contract with insurance companies, they'd probably have trouble getting paid for services since most Americans think healthcare is an entitlement and not a service deserving of a six figure or greater salary...

At the same time, it makes sense for insurance carriers to contract with doctors in specific geographical areas in order to contain costs.

 

[brewer12345]

I guess if all doctors decided one day to stop contracting with insurance carriers, then you all wouldn't have to worry about which state you move to. After all, there must be some kind of "capitalistic" reasons why doctors contract with insurance carriers....

Rich and others can chime in, but from what I understand there is a sizable fration of the physician population that would be happy to skip dealing with insurers and just take the discounted rates. Many physicians spend a LOT of time and money dealing with insurers.

Be that as it may, I would imagine that a federalization of the insurance marketplace (for health and other insurance) would result in a consolidation boom and a (further) commoditization of the products involved. There would also likely be a race to the bottom in terms of customer service, consumer protection, etc. Some of the savings might be passed on t o consumers, but much of it would flow to shareholders. In health insurance, providers would have even less leverage with payors than is currently the case.

 

[FIRE'd@51]

I think part of the problem you run into with having all control at the Federal level, from a private insurance standpoint, is that it would be difficult if not impossible for most carriers to create nationwide networks of Doctors across the USA. Nationwide indemnity (any doctor) plans would have no mechanism for cost control, so the HMO and PPO concepts are what helps keep health care costs under some kind of control.

I don't see why the problem can't be solved with regional PPO's and regional risk pools. So long as individual states are passing different sets of regulations, this will continue to be impossible. I think this is why we will probably need some Federal intervention to coordinate this among the states. I would prefer to see it done without Federal intervention, but you seem to say the insurance companies have thrown their hands up into the air and given up because of all the different state regulations. Medigap (Medicare Supplemental) seems to work pretty well with regard to state to state portability, and the insurance companies seem to love that market. Why can't the insurance companies look to the Medigap model for ideas how to make it work? As I understand it, all the Federal governemnt has done in the Medigap area is standardize the plans across the country, so plan F is the same in every state.

 

[mykidslovedogs]

True, Medigap (supplemental private insurance) does work fairly well, but you sacrifice selection in that process. There are only something like 6 different Medigap plans, and the only plans that are worth anything are Plans F and J. Our culture demands freedom of choice. Would you like it if your choices for private insurance were limited to two or three Federally mandated plan designs? I'll bet most people would answer NO to that question.

A lot of people still don't buy Medigap because they feel like it is too expensive, and the lower cost options aren't worth the price.

 

[kramer]

You can't sell gasoline blended in any other non-California state within California, etc.

I am currently going through health insurance acquisition. My agent didn't really even know much about portability -- it is something that most people are just not aware of. For me, it is the #1 issue.

I live in California -- if it changes to a mandatory issue state then my rates could soar. I want insurance on my insurance and the ability to move.

This is one reason I am leaning toward Assurant Health, largely based on MKLD's recommendation.

My insurance agent also turned me on to Nationwide. You can only buy it in California or Ohio (and you must be a resident), but later if you move you can bring it with you to almost any state without underwriting (they just can't sell residents of states other than OH or CA new policies). And they have a nationwide network, presumably due to all their group plans. I was on the phone with them this morning confirming all of this. But I am still leaning toward Assurant.

Policy issues aside (we must deal within status quo at this time regardless of changes one would like to see), my advice is buyer beware when you are shopping. Many policies are not portable because most buyers are simply not aware of this restriction. If it became an issue, I bet that various state Blue Cross' would start contracting with one another for portability, etc.

I am going to call Aetna next and ask about their portability across states for individuals. I will report everything that I find back to the forum.

Kramer

 

[FIRE'd@51]

True, Medigap (supplemental private insurance) does work fairly well, but you sacrifice selection in that process. There are only something like 6 different Medigap plans, and the only plans that are worth anything are Plans F and J. Our culture demands freedom of choice. Would you like it if your choices for private insurance were limited to two or three Federally mandated plan designs? I'll bet most people would answer NO to that question.

A lot of people still don't buy Medigap because they feel like it is too expensive, and the lower cost options aren't worth the price.

Gee, a choice of 6 plans with 2 good ones is more than a lot of people have now in the individual market, especially if they have a pre-existing condition which they didn't have when they first took out their insurance and now want to move. And, of course it's going to be expensive - you are talking about people who are over 65 and, as I understand it, the policies are guaranteed-issue. My insurance agent told me that when a person turns 65 and goes onto Medicare/Medigap(even plans F or J) his insurance cost will drop significantly relative to when he was 64 on a good individual policy, and he will have better coverage in terms of lower deductibles and copays.

 

[mykidslovedogs]

Kramer,

I think portability, with regards to private individual plans is just now starting to become an issue, with employer-sponsored plans becoming less and less affordable, and with so many, particularly small employers, dropping their benefits because of cost.

If we don't go universal soon, I can guarantee you that there will be some kind of legislation coming down the pipeline with regards to state to state portability of individual insurance.

 

[mykidslovedogs]

Gee, a choice of 6 plans with 2 good ones is more than a lot of people have now in the individual market, especially if they have a pre-existing condition which they didn't have when they first took out their insurance and now want to move. And, of course it's going to be expensive - you are talking about people who are over 65 and, as I understand it, the policies are guaranteed-issue. My insurance agent told me that when a person turns 65 and goes onto Medicare/Medigap(even plans F or J) his insurance cost will drop significantly relative to when he was 64 on a good individual policy, and he will have better coverage in terms of lower deductibles and copays.

Only a very, very small percent of the population is uninsurable. Of these people, a fraction is ineligible for Medicaid. Do we restrict choice for the great majority of the population just so this small fraction of people can have portability from one state to the next? Or...do we try to come up with other creative solutions for the working poor such as affordable solutions for small employers like Anthem Blue Cross and Blue Shields "BeneFits" employer sponsored health plans?

Medigap is only guaranteed issue if you buy it within 6 months of obtaining Medicare Part B. If you choose not to buy it because it wasn't affordable at the time you became eligible for guaranteed issue, you can be declined for pre-existing conditions later on.