June 25, 2008

Health Insurance Premiums - What insurance carriers don't tell you.

A Northern California newspaper reported today that insurance companies are indicating that their average 2008 health insurance premiums will increase on average 10%.

We disagree. Although statistically this may be accurate, the truth is that our office has seen rates in California and Texas averaging 20-27% this year. One national Health provider has sent a number of our clients premium increases of 40-65%. Most increases will become effective in July (for new business) or at the policyholders 6 month anniversary or 1 year anniversary.

What you are not hearing from the insurance industry is that these future rate increases do not include age increases or policy age banding changes. The most common method of age banding is to have a single rate for individuals between age 35-40, etc. This year a number of insurance companies have eliminated "age banding" and are now charging a tier rate, meaning you will receive age change increases, at birthday 35, 36, 37, 38, 39, 40. Insurance providers are also charging higher rates for women, a perfectly legal practice, as their actuarial staff supports these increased rates with a higher utilization of services and more medical conditions.

What should you do?

First, start with running an
instant health insurance quote online two to four times a year. Online brokers have the most up to date rates and you can compare your policy against other companies best plans available in your state. It takes less than 5 minutes.

With this information, plan a potential exit strategy if your premium rates become unaffordable. Insurance companies usually notify you in advance of their intention to increase premiums. If you decide to switch carriers, you should have ample time to apply and be approved with a new company prior to receiving any actual rate changes. This policy is also good to avoid any potential gap in coverage. Another tactic is to change plans within your current health insurance companies product portfolio. This is valuable if you have on going medical conditions or serious pre-existing conditions.

Take time to design a health insurance program that meets your family or businesses needs. This is a serious financial commitment, especially if you select the wrong plan. For more information contact