Health insurance premium questions

[dgoldenz]

This is where I always put a few caveats to dgoldenz answer. Technically this is a matter of state law and if your state law does not bar re-underwriting, the insurance companies can raise rates based on claims. Many states do bar this practice. I don't know about Missouri. It is very unclear how common this practice is in states that do not bar it but it certainly has happened. It may be the case that it occurs less or not at all with "name brand" insurers.

What is more common is that the rates for the entire group may go up, especially if the people in the group are aging or have a lot of claims. The healthy ones leave the group for better rates and the rates go higher and higher for the ones who are left and can't get underwritten insurance.

Or, the plan is terminated and the healthy people are able to get on a new plan and the unhealthy are not.

So, just because you get a plan and are healthy now is no guaranty that things will not change in the future. I wonder how many people on individual plans end up on the same plan for decades. Not many I would guess.

A few years ago, people would keep the same plan for 5-10 years because rates were stable and deductibles were low. Now the average is more like 1-2 years because of rate fluctuation, plan designs, and HCR. I would venture to guess the average HIPAA case stays on the same plan 3-7 years. Of course, this may all change in 2014 if HCR isn't repealed or changed.

 

[teejayevans]

Having insurance also gives you preferred rates, you will end up paying "retail" if you don't have insurance.
TJ

 

[kevink]

I have a client + spouse who are both 60 years old, perfect health, etc. They had been paying a lot of $$ for health insurance for a lower deductible co-pay plan and never used because of their good health. They finally decided to go the HSA-plan route and chose a $10k deductible. Of course, the first year they had it, they incurred $10k in claims. Just because you've been healthy for 20 years doesn't mean disaster can't strike now.

I'd suck it up and keep paying for the insurance. Like someone else said, even a $10k deductible HSA policy won't be that expensive and will at least cover you in the event that something disastrous happens or you develop a chronic condition. This is an ER forum and I would venture to guess a major event or chronic illness could easily ruin those plans.

With premiums on individual policies going up ~20-40%+ annually I suspect there will be plenty of early retirees (especially those forced into ER through job cuts and grim employment prospects) who'll decide to go without insurance. When premiums equal 30%, 40% or more of your SWR you may have some hard choices to make.

We live in Mexico largely for health care cost reasons, but if when and if we did return to the U.S. we'd probably "go naked," amp up the medical coverage for our car, establish relationships with one or more doctors plus the nearest urgent care clinic for discounted services for cash, and have a clear plan in place to fly down here for treatment of any chronic illness. Living within a 2 hour non-stop flight to a Mexican city such as Guadalajara or Puerto Vallarta with excellent care and many English-speaking docs would also be part of the plan.

Not a perfect solution by a long shot - a heart attack or other acute condition that precluded getting on a plane would entail taking a major financial hit - but for some perhaps preferable to spending 30-50% of one's monthly draw supporting insurance companies.

 

[Corporate ORphan]

This is where I always put a few caveats to dgoldenz answer. Technically this is a matter of state law and if your state law does not bar re-underwriting, the insurance companies can raise rates based on claims. Many states do bar this practice. I don't know about Missouri. It is very unclear how common this practice is in states that do not bar it but it certainly has happened. It may be the case that it occurs less or not at all with "name brand" insurers. .

Any suggestions on where I can find out if they have re-underwriting in MO? I would really prefer to keep the COBRA at least until the gov subsidy expires and not call a broker until I am ready to discuss a policy.

I didn't see anything about it on the MO insurance site but maybe I just missed it. This whole business makes my head ache

 

[dgoldenz]

Any suggestions on where I can find out if they have re-underwriting in MO? I would really prefer to keep the COBRA at least until the gov subsidy expires and not call a broker until I am ready to discuss a policy.

I didn't see anything about it on the MO insurance site but maybe I just missed it. This whole business makes my head ache

You can call the department of insurance for MO to get an answer. I don't know of any states that allow companies to raise your rates based on claims made, but I don't sell in every state. That would defeat the purpose of buying health insurance...

 

[Martha]

You can call the department of insurance for MO to get an answer. I don't know of any states that allow companies to raise your rates based on claims made, but I don't sell in every state. That would defeat the purpose of buying health insurance...

At one time I had a list of the states, on paper. Can't seem to find it after moving.

 

[dgoldenz]

At one time I had a list of the states, on paper. Can't seem to find it after moving.

It would seem that even if it was allowed in a couple of states, the company/companies doing it wouldn't get any business after stories about it started cropping up. They do still have to attract new customers after all...I know I wouldn't be selling for any companies engaging in that type of BS.

 

[Corporate ORphan]

I have been looking at the Health Care.gov site (what a great site for anyone looking into health insurance.) It appears that the closer you apply for the insurance to be effective, the cheaper the monthly premium (to a certain point.. at least between about 2 weeks vs 45 days).

Anyone know if that really is the case? Also, they want your SS# to actually apply for the insurance. Is that really a requirement? I was a victim of ID theft and my lawyer said not to give it out unless absolutely necessary. We have lived in the same place for 20 years. Shouldn't they be able to do it by our name, DOB and address?

Thanks!

 

[dgoldenz]

I have been looking at the Health Care.gov site (what a great site for anyone looking into health insurance.) It appears that the closer you apply for the insurance to be effective, the cheaper the monthly premium (to a certain point.. at least between about 2 weeks vs 45 days).

Anyone know if that really is the case? Also, they want your SS# to actually apply for the insurance. Is that really a requirement? I was a victim of ID theft and my lawyer said not to give it out unless absolutely necessary. We have lived in the same place for 20 years. Shouldn't they be able to do it by our name, DOB and address?

Thanks!

Premiums should be the same for the same effective date no matter when you apply. If the quotes are higher for later effective dates, that means the company is probably raising their rates as of a certain date. The health insurance companies will all ask for your SS# so that they can run an MIB and prescription check to make sure you aren't "stretching the truth" on the application (not saying you would, but that's the reason).

 

[Corporate ORphan]

Interesting. If I have never applied for insurance before (been on the company insurance for 32 years) I guess it will just come up empty?

Another question, I noticed that there is an individual and family deductible and out of pocket. Would the family need to be fulfilled in order for the medical costs of an individual in that family to be covered? Or is it different for each policy and/or insurance company.

THanks again!

 

[Mulligan]

Interesting. If I have never applied for insurance before (been on the company insurance for 32 years) I guess it will just come up empty?

Another question, I noticed that there is an individual and family deductible and out of pocket. Would the family need to be fulfilled in order for the medical costs of an individual in that family to be covered? Or is it different for each policy and/or insurance company.

THanks again!

When I got accepted I had to disclose my group health insurance provider. It would seem they would ask that from you and could check claims, etc through your current provider. Before I attempt the other question (I'm sure you will get better subsequent answers than mine), keep in mind health insurance shopping is now more like shopping for a new car with many makes, models, and pricing. For example purposes only, some may have say, a $4000 family deductible with a $2500 individual deduct. In other words once an individual goes over that amount of $2500, they will pay costs above that theshold (provided you have no co-pays). Once the whole family has medical expenses above $4K, then they pay for all expenses after that (once again depending on policy taken). This way you may have 3 people with $1500 a piece. None over their deductible, but cummulatively you are above the family deductible, so they will pay.

 

[dgoldenz]

Interesting. If I have never applied for insurance before (been on the company insurance for 32 years) I guess it will just come up empty?

Another question, I noticed that there is an individual and family deductible and out of pocket. Would the family need to be fulfilled in order for the medical costs of an individual in that family to be covered? Or is it different for each policy and/or insurance company.

THanks again!

MIB an Rx check has nothing to do with what health insurance you have or haven't had. If you've ever been diagnosed with something or had a prescription filled, it's all in a central database.

HSA plans are usually one single combined deductible for the family. Most, not all, traditional/co-pay plans have an individual deductible for each person in the family. There is usually max of two deductibles and MOOP (maximum out of pocket expenses) for a family even if there are more than two members. Some newer plans are making this three family members to keep costs down.

 

[Corporate ORphan]

Interesting about the MIB. My SIL said hers had incorrect info on her. Based on what she said (a brain tumor vs a brain cyst) I never would have guessed it was the prescriptions.

I still am not clear on the deductible. Are you saying an HSA with $5000 deductible for a family and $2500 for an individual would require the total to be $5000 before it paid for either person?

While we are on the subject of HSA. CAn you set up an HSA anywhere or do you have to use an institution dictated by the insurance company?

THanks again. I am planning to talk to a broker but I wanted to get as much info together as I can before I make the call.

 

[dgoldenz]

Interesting about the MIB. My SIL said hers had incorrect info on her. Based on what she said (a brain tumor vs a brain cyst) I never would have guessed it was the prescriptions.

I still am not clear on the deductible. Are you saying an HSA with $5000 deductible for a family and $2500 for an individual would require the total to be $5000 before it paid for either person?

While we are on the subject of HSA. CAn you set up an HSA anywhere or do you have to use an institution dictated by the insurance company?

THanks again. I am planning to talk to a broker but I wanted to get as much info together as I can before I make the call.

If you apply together with a $5k family deductible, you have to meet the $5k before receiving benefits (other than preventative care). If you apply separately for the same plan, the deductible would (likely) be $2500 for each person and you would receive benefits after meeting that deductible since the policies would be separate. Some companies have a discounted rate for applying together instead of separately. Others charge the same rate whether you apply together or separately. If they charge the same rate, you should apply separately.

Yes, you can set up an HSA with any bank you want. No requirement to set it up through the insurance company, though they will probably ask if you want them to.

 

[Mulligan]

Interesting about the MIB. My SIL said hers had incorrect info on her. Based on what she said (a brain tumor vs a brain cyst) I never would have guessed it was the prescriptions.

I still am not clear on the deductible. Are you saying an HSA with $5000 deductible for a family and $2500 for an individual would require the total to be $5000 before it paid for either person?

While we are on the subject of HSA. CAn you set up an HSA anywhere or do you have to use an institution dictated by the insurance company?

THanks again. I am planning to talk to a broker but I wanted to get as much info together as I can before I make the call.

I believe in some past threads there have been discussions on which institution has the "better" HSA. I was a little lazy as I chose one of their (Anthem) recomended ones, but their "preferred" one had monthly fees so I didnt go that way. Not saying its the best but I went with Bancorp. They have no monthly fees as long as a $2500 minimum was held, I believe. I put 3K this year to get the ball rolling, interest rate was something like 0.75%. Ive read that some people have found better deals going with a local bank as they sometimes provide HSA's. Things you may want to consider in chosing one would be: 1) fee structure 2) Interest rate 3) Deposit/withdrawal methods 4) Use of debit card for account 5) Any desire to invest in mutual funds in your account if you decided to do that. You dont want one that will nickle and dime you with fees that you lose your tax benefit.