Health Insurance Rate Increases


Affordable Health Insurance Quote

In health insurance it is not uncommon to see your policy to go up 20% in a year on your renewal date. This actually happened with Aetna last year.  The facts are, that health insurance companies operate on stable profit margins of less than 4% average. So, when a health insurance premium goes up, there is a portion of it that is applied as you are now one year older and a portion for inflation of course (hopefully not hyperinflation as many are expecting next year) and the rest is to cover cost health care increases.

In the health insurance market there is a ton of competition, so these companies don’t want to keep jacking up your health insurance premiums and would like to stay more affordable for member retention and to attract new business.  So, the health care cost increases are truly an effect of a broken system. Health care is like a public utility and thus no one should profit off of it. Why, then, is East Coast Health Insurance in this business?  Because we only sell reputable companies, and have no affiliations with companies that do illicit things, period. We also have a public service where we offer free consultations to help you find the best government health program or do a one man group at no charge.

So, why did Aetna have a 20% (other companies have done this too, by the way) rate increase?  Because, they tried to take people that should not qualify for individual health insurance.  They were taking clients that no one else would.  This practice is wrong, as no one should have to qualify for individual health insurance, but I am just a cog in a wheel and hope that Washington is not only able to mandate coverage but also to mandate that health insurance companies cover everyone.  (Even this is not the correct answer as with the economy in state of severe contraction we are going to be lucky to have jobs in a year from now and the dollar could feasibly go into decline.)  In any case, Aetna got nailed when these cases came back and started filing enormous claims.  The good news, though, is that they paid every single one of them and rescinded 0 policies.

I can make that claim about no other health insurance company, as they have all rescinded (though Florida Blue Cross has not but other Blue Cross companies have).  But the average premium increase in my experience is about 12%.  Many companies or most companies actually raise premium about 3% per quarter for new enrollments.  For renewals, there is one increase per year to reflect these quarterly increases.

On the other side of the coin are Group health insurance policies, which can go up 30% a year and have done so regularly, by the way, based on the overall experience of the group being insured.  As I said, the margins are steady, the claims and health care costs are rising.

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