Here is a Question from Anonymous in Florida:

What Determines the Premium Increases for Individual Health Insurance and How High Can They Go?

Answer:  Well Anonymous this is actually a great question that we get asked time and again.  The first part of your question is about Premium Increases.  On individual health insurance, premiums can only be increased for an entire demographic.  So for instance, they can’t target John Doe aged 40 in Miami for his own 30% increase.  Either everyone gets it or nobody gets it.  But, there can be multiple increases for the same region but in the different age bands.   So all the 40-45 year old males might get a 15% rate increase and all 18-24 males might only get a 4% increase.   Additionally, when it comes to domiciled health insurance companies (which is all of the health insurance companies that East Coast Health Insurance represents, except United Health Care) their rate increases must be approved by the state.  Oftentimes this means absolutely nothing as we have seen 20% increases year over year.

Health Insurance margins are pretty much constant at the industry average of 4% so that is why you might see uneven premium increases across various demographics.  This would occur because lets say Cigna had an exceptionally bad loss on 40 – 45 year old males, so they have to hit this demographic harder than others.  And, this might only occur in a particular city or county so the difficulties in guessing rate increases becomes even more difficult unless you are able to look at detailed Actuary Tables for the results in a certain demographic.

But to answer the last part of your question individual health insurance premiums can go up as high 30% if they are approved by the State.  In practice, however the average annual increase for domiciled health insurance companies is 12%.   Many companies like Humana and United Health One raise their premiums 3% every quarter for new enrollments.  These increases are passed on to the older members on their policy anniversary date in order to have homogeneous premiums for various demographics.

What makes up premium increases besides claims experience?  Inflation (this is the most scary one), rising health care costs (this is the 2nd most scary one), and of course the fact that you are a year older unless you figured out a way to age backwards like Benjamin Button.  The scariest thing is that in the next few years health care and health care costs will make up nearly 25% of our GDP unless someone fixes our health care system and the current bill that is headed for the Senate does not even address rising health care costs.

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The Best End of the Year Health Insurance Options: Rollover Your Deductible Like You Rollover Your Minutes

Hi, I'm Caroline, Here To Help You With Your Health Insurance Questions

Around this time of the year there are many individuals and families who are looking to start addressing their New Year’s resolutions; one of them usually being to either get health insurance or to lower their health insurance premiums.  But most individual and family health insurance policies have calendar year deductibles – meaning if you get a health insurance plan effective November 1^st and were to “use any of your minutes or deductible” so to speak then you would have to start all over come January 1^st!

Here’s my completely free and no obligation required tip, most but not all health insurance plans have this inherent trait.  AvMed offers a rollover or “carry-over” deductible that essentially offers anything accumulated towards your calendar year deductible during the last three months of the year will…that’s right, CARRY OVER or ROLL OVER to your next calendar year deductible.

I had previously mentioned my own personal experience that although personally annoying in my own life, works as a perfect illustration of what I am alluding to in this article.  On a not so cold winter night in Boca Raton, December 14, 2007 to be exact, and the day before my twin sister’s wedding no less, I was admitted to the emergency room at Boca Community Hospital.  I had a not so fun 6 hours of poking, prodding and the seemingly never-ending testing.  All of this, only to find out that my kidney infection was gone and the ovarian cyst they suspected from one of the x-rays was in fact never really there and ultimately I got a clean bill of health.  By no means am I complaining, but what did kind of suck (please excuse my language) was the fact that the $1900 and some dollars I was billed and that would go towards my $5000 calendar year deductible would have brought the remainder of my $5000 deductible to $3100.00 – THAT IS, IF I HAD THIS OH SO WONDERFUL BENEFIT of the rollover deductible.  But of course, I did not, so it was more like my rent instead of a mortgage payment.  Flushed right down the toilet…I had the Aetna POS OA 5000 plan and although I did of course experience excellent service and benefits and was able to reap the benefits of Aetna’s contracted rates (the billed amount was over $6000 and the allowable or negotiated fee that I owed was $1900) it would have been a lot nicer if I had the added benefit of knowing that it was going towards my deductible instead of nowhere.

So as we procrastinators look to obtain some good health insurance coverage these last months of the year, do not be upset with the fact that any bills you end up being responsible to pay due to the medical services that were rendered to you seem like another rent payment that you didn’t see coming.  That is of course, unless you were to go with AvMed or Humana who both offer this nice little 3 month carry over deductible benefit. I should note however, that Humana also imposes a 3 month waiting period on your preventive care services – so between the two you’re better off with AvMed on an overall basis.  And Coventry doesn’t offer the rollover deductible, but does offer the POLICY YEAR DEDUCTIBLE instead of the usual CALENDAR YEAR DEDUCTIBLE.  So if you start your policy effective December 1^st of this year – that’s right folks, any payments towards your deductible are mortgage payments through next December and no rate increases until that same time..very nice.  So although the initial premium may be slightly higher than some of their competitors, you may find it worth it to pay a little more now for some peace of mind in knowing that if anything were to happen to you during the end of the year you won’t be tempted to hold off on getting it checked out until the next calendar year deductible period and God forbid find yourself with a burst appendix.

In short, besides having many other benefits and advantages as all of these insurance carriers often have in comparison to one another, just for this limited time much like a dealership’s end of the year sale, AvMed and Coventry are my top two picks.

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