Pros and Cons
of Health Care Reform Blog

Jul 18

Pre-existing Conditions and Health Insurance Reform

Posted by Dina Collins on Thursday, July 18, 2013

Over the years, I had the great displeasure of having to inform clients that their health insurance application was denied. Their only option at that point was to apply for coverage through the Major Risk Medical Insurance Bureau which was super expensive for limited coverage. In 2014, coverage will be guarantee issue for everyone. Not only will it be guarantee issue, the premiums will be the same for those with pre-exisitng conditions as it is for those without. This means there will be no need for insurance companies to have medical questions on their applications. This is a huge sigh of relief for many people. Even if you don’t have pre-exisitng conditions, you will benefit by not having to answer pages of medical questions during the application completing process. Just the other day, a client came in and decided on a health plan for her and her family. She decided to apply online right there in my office. About two hours later, that application was complete. Now granted we ran into a few technology hiccups but still, that is a long time to complete an application. She and her family were very healthy, it would have taken even longer for those with a lot of pre-exisiting conditions. How will the rates vary? By your age but only with a 3 to 1 rating and based on the county you live in.

What does a 3 to 1 age rating ratio mean? Currently, we have a 6 to 1 age rating ratio which means if someone in their 20’s was being charged $100 for a plan, someone in their 60’s couldn’t be charged more then $600 for that same plan. Starting next year, someone in their 60’s can’t be charged more then 3 times what someone in their 20’s is being charged. This will bring up the premiums for those in their 20’s and 30’s and lower those in their 50’s and 60’s. Not necessarily lower then what they are today but lower then what they otherwise could be in 2014 and beyond. Your rates will also vary based on the county you live in. The southern, more populated counties will be lower then the northern less populated counties due to the ability for lower provider cost in the more populated counties that have more provider competition.

The Affordability Care Act allows for insurers to offer a higher rate to those that smoke then those who do not but California decided to NOT allowed California insurance carriers this rating ability so in CA, rates will be the same for smokers as they are for non-smokers.

No matter how you feel about the sensibility of the Affordable Care Act, you must admit, the simplicity of getting a rate quote and the application process will be a great benefit.