Health Insurance Blog

Blue Cross Blue Shield of Vermont, the state’s largest health insurer, is under fire from People for the Ethical Treatment of Animals (PETA) due to its policies, according to CBS NewsChannel 5. PETA wants providers of Vermont health insurance to vary health insurance premiums based on an individual’s diet, charging meat-eaters higher rates and offering discounted rates to vegetarians and vegans. They claim that meat consumption is associated with diseases that end up raising insurance rates for everyone, but there is conflicting evidence of that.

Kevin Goddard, a vice president at BCBS Vermont, responds that state law does not allow insurance providers to vary rates based on factors including diet, age, gender, or medical history. However, the Vermont state legislator is now considering reforms that would allow insurers to offer different levels of premiums to individuals depending on their lifestyles; people who take better care of themselves health-wise (which is a comination of many different factors) would pay less.

Another way to save on your premiums is to get multiple health insurance quotes. You might be able to find a better deal, regardless of your eating habits!

(Photo credit: Derek Purdy under CC 2.0)

Women of child-bearing age (19 to 55 years old) pay more for health insurance than men, says Linda A. Firestone, Ph.D in the Sun-Sentinel. A typical woman’s policy includes maternity coverage, which accounts for the gender disparity in insurance rates. Since the majority of American adult women eventually have children, health insurance with maternity coverage makes sense for them–especially if there are pregnancy or birth complications.

Group health insurance plans (for example, those provided by employers) in Florida do not allow women to opt out of maternity coverage. If a woman does not plan to have children, she can choose to buy one of many individual health plans, which allow her to opt out of maternity coverage. In fact, many insurance providers (such as Humana), no longer offer maternity coverage in their plans. Insurance specialist Larry Wides says the cost savings from a group plan tend to cancel out the reduced premiums resulting from the elimination of maternity coverage.

The UnitedHealth Group is now offering UnitedHealth Continuity, a policy for those that already have health insurance but are worried that they may lose it in the future. These people may be considering early retirement, or may fear unemployment and the resulting loss of health care coverage. Reed Abelson says in the New York Times that applicants must pass a medical review before being accepted. However, many individuals who have been unable to get insurance on their own are those with pre-existing conditions. The Continuity plan doesn’t seem to be helpful for them.

The UnitedHealth Continuity policy charges members 20% of the current health insurance premium to reserve the right to future coverage, and varies due to age, gender, location, and level of coverage selected. The monthly fee is also subject to increase in the future. There is also the danger of the plan becoming a costly high-risk pool that attracts people more likely to develop serious conditions.

Reed also speculates that proposed health care reforms from the incoming Obama administration include a requirement that private insurers offer individual health coverage to everyone, no matter the state of their health. That type of law would make the new UnitedHealth guarantee unnecessary. The president of UnitedHealth’s individual insurance unit, Richard A. Collins, claims that political wrangling and legislative delays make the Continuity plan viable, at least in the short term.

UnitedHealth Continuity is currently available in 25 states in which UnitedHealth already sells individual insurance. It believes that it will soon be able to offer the Continuity plan in 15 more states.

(Photo credit: Shahram Sharif under CC 2.0)

Kevin Freking from the Associated Press has just reported the reaction to President-Elect Barack Obama’s health care plan from America’s Health Insurance Plans (AHIP). AHIP is the leading health insurance industry trade group.

At the National Press Club, AHIP announced that it generally supports the Obama administration’s ideas for health care reform. However, they strongly oppose a proposed requirement that large- and medium-size employers must either contribute to their employees’ health insurance or pay a percentage of payroll to a national insurance plan. President and CEO Karen Ignagni claims that given the current state of the economy, any sort of employer mandate is a bad idea.

AHIP also doesn’t support comprehensive coverage mandates imposed by the states, preferring a national plan for small businesses that covers essential services such as emergency and primary care. This plan would exclude services that significantly increase monthly insurance premiums and those that insurers consider unproven. Consumer advocate groups believe that this will reduce the effectiveness of individual health coverage.

Politicians and industry representatives agree that they would like changes in health care policy to happen soon, before the new administration gets distracted by other issues.

Jill Brown, the Managing editor of AIS Health.com, wrote a report about how Blue Cross Blue Shield (BCBS) member health insurance plans have been launching new individual health insurance products that are in line with new state mandates that are designed to make individual health insurance more affordable.  The underlying theme is that the weak economy has and will continue to spur sales of individual health plans, as many people lose employer-sponsored health coverage.

Specific examples of BCBS plans launching new health plans or making adjustments to  existing health plans include:

1. Blue Cross Blue Shield of Arizona who recently launched (Sept.) a suite of 5 new individual health plans with premiums as much as 40% lower than their existing individual health insurance offerings, while still offering up to $5 million in lifetime benefits.
2. Wellpoint is expanding their affordable “SmartSense” line of indivudual health insurance plans to Colorado in November, and they plan to add even more states over the next few quarters.  The SmartSense product line was piloted in California and Georgia and now makes up more than 50% of individual health insurance sales in California.
3. Horizon BCBS of New Jersey is making adjustments to their individual health plan pricing by taking advantage of a new law that allows them to use a applicants age in their rate calculations which should make the plans more affordable for younger individuals.

As alluded to in this report, many health insurance carriers accross the country, not just BCBS member health plans, will be offering new health plans for individuals, and making their health insurance rates more affordable.  It is a great time to compare rates and see what is available in your state.

A recent study undertaken by online health insurance marketplace ehealthinsurance.com found that individual health insurance can indeed be affordable if you shop around.

Specifically, the study of more than 225,000 individual and family health plans purchased through their site found that the average monthly premium to insure an individual was $158, and more than half of those underlying policies had a monthly premium of less than $130!  When insuring a family, the average monthly premium was $366 with more than half paying less than $300 per month.

To build on a previous health insurance study that was blogged about here, women paid more for their health insurance coverage, 18% more to be exact.  On average women paid $171 per month while men paid $145 on average.

Other findings:

• 60% of children’s health plans had monthly premiums of less than $100.  These do not include state sponsored and subsidized children’s health plans which have income limits for qualification.
• Regionally the Midwest was the cheapest region with average monthly premiums of $130, followed by the West region ($150), South ($154), and Northeast ($239)
• Average monthly premium for HSA health plans was $133

There have been several articles published within the last week, most notably in the New York Times regarding health insurance rates paid by women compared to rates paid by men.  The article used health insurance quote data gathered from such health insurance companies as Humana, Aetna, and Wellpoint as well as online health insurance marketplace ehealthinsurance.com, and state high-risk pools.

The article in the New York Times sites several examples of price discrepancies between women and men of similar ages for identical coverage levels at various health insurance companies.  The data is rather compelling as the health insurance rate differences are in the 30-50% range.  However, does anyone really believe that health insurance companies are unfairly setting rates artificially high for women?

The article mentions the comparatively high health care expenses for women during child bearing years, but later dispels this as the sole explanation siting that the wide range in premiums couldn’t possibly be justified by actuarial analysis.

It would have been a more compelling analysis, and further solidified the argument if the author went on to compare health insurance rates for a 60 year old man vs women, an age when men’s health issues become more prominent.

After a quick analysis comparing rates on ehealthinsurance.com, an elderly man can expect to pay about 5% more than an elderly women for identical coverage levels.  The results of this quick test were not quite the results that I was looking for that would invalidate the argument that women are being gouged on their health insurance rates.  But my gut feeling tells me that the disparity between a women’s and men’s expected health care costs in their mid 30s, for example, are indeed magnitudes apart, and health insurance  companies are appropriately planning for potential claims.

The department of insurance (DOI) in each state must approve health insurance premiums based on claims history, and actuarial analysis, and would not approve rates if the this analysis didn’t support the rates  they requested.

Things you should consider when shopping for a health insurance plan for you and your family.

Make sure your family doctor or any specialists that you typically use or plan to use in the future are in the network.  Co-pays and co-insurance percentages will be higher to utilize service from out of network doctors.  Some health plans may not provide any out of network benefits.

If possible, research your health care spending done in previous years and figure out what you might need going forward (i.e. if you see that you rarely if ever require prescription drugs, it might not make sense to enroll in a health plan that includes prescription drug benefits if the additional expense is high.)

If your health care utilization is typically low, and your family is in good health, a high-deductible health plan might be a good option.

If your spouse has health insurance coverage through his or her employer, check to see if the portion on the monthly premium that the employee pays is more or less than what you would pay with your employer sponsored plan or individual health insurance plan.

Does the health insurance plan offer a wellness plan, or alternative medicine discounts which could save you money.

You can shop and compare individual health insurance plans here at healthinsurancesort.com.   Some other resources that might be useful include your state department of insurance, or if age 65 or older, www.medicare.gov.

Recent studies have shown that state health insurance mandates such as guaranteed issue, community rating and specific benefit mandates have made rate variances between different states extreme, and in the process reduced competition.

The federal McCarran-Ferguson Act was enacted to allow states to set their own requirements as to what and whom health insurance companies must cover.  As a result, some states cover such things as marriage counseling, acupuncture, and hairpieces.   Some experts believe that about 25% of the uninsured market doesn’t purchase health insurance because of the needlessly high health insurance rates.

Another mandate that has driven up health insurance rates in some states is guaranteed issue (a mandate that requires health insurance companies to accept all who apply regardless of health condition) which when in combination with community rating (individuals don’t pay more due to their relative unhealthiness) forces the carriers to raise their rates for everybody to protect themselves against potential losses that result.

One proposed solution to the countries delicate health insurance market at the national level is the Health Care Choice Act (H.R. 4460)

The Health Care Choice Act would allow shoppers to buy individual health insurance online, over the telephone or through an agent or broker from any health plan in the country.  Consumers could choose among policies from health insurers anywhere in the country.  The health plans would be regulated by the insurer’s home state (i.e. if an Ohio resident purchased a policy from Blue Cross Blue Shield of North Carolina, they would be regulated by the health insurance laws in NC).  If consumers have no need for benefits that are mandated in their state (like fertility treatments or hairpieces) they could purchase a health plan from a insurer in another state that does not require the health insurance company to offer them

Allowing consumers to select from a national pool of health plans, will give health insurance shoppers more opportunities to find affordable health insurance, and plans that better fit their needs.