June 22, 2010

How much did your Health Insurance policy increase this year?

Today, individuals who bought their own health insurance recently have been hit with rate hikes averaging 20 percent, according to a national study released Monday.

The Kaiser Family Foundation, which conducted the research, found that about three-fourths of the country's 14 million people who don't get group coverage, many of them self employed, faced premium increases to keep their coverage.

Most paid the increase, perhaps trapped by the inability to find other coverage because of pre-existing conditions, researchers said. About 16 percent "bought down" into plans that were less expensive but provided fewer benefits. The average premium for an individual policy was about $3,606 annually – less than the $4,824 average for group coverage.

But those on the individual market typically have fewer benefits. And they pay more in out-of-pocket expenses, including huge deductibles.

While the individual health insurance market is relatively small compared to the group insurance market of about 157 million Americans, recent premium increases among people who have to buy their own insurance have received public attention.

With inflation and wages remaining relatively flat, it's understandable for consumers to view the increases as unreasonable, said the foundation's president, Drew Altman. "If you're being hit by a 20 percent increase … that's on its face a completely unreasonable increase."

The insurance industry blames rate hikes on the rising costs for hospital care, doctors and prescriptions.Health insurance premiums are increasing because medical costs continue to soar and young and healthy people are dropping their insurance during the recession," said Robert Zirkelbach, spokesman for America's Health Insurance Plans.

It could still be years before individual policyholders see any relief from the federal health care overhaul, which will start offering subsidies in 2014 to consumers who qualify. Advocates in California, who held a telephone news conference on Monday, insisted that the new law would eventually bring down costs.

But Anthony Wright, executive director of Health Access California, said state regulators in the meantime must also put "additional scrutiny on rates." Wright expressed optimism that so-called insurance exchanges, which must be established by 2014 under the health care law, will give individuals the purchasing power that allows large businesses to negotiate better deals and coverage with insurers. Those who qualify, based on income, will be able to buy subsidized insurance through the exchange.

The California Legislature is currently considering a bill to create a state-run exchange from which the self-employed, small businesses, the currently uninsured and others who buy health insurance on their own can buy coverage. Currently consumers are encouraged to shop and compare individual and group coverage options. QuoteBroker offers free instant health insurance quotes from all major insurance providers. Shop, compare prices and enroll online.