Health - Rate Increases Are Getting Out of Control
By: iWebQuotes.com -
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In recent years, health insurance rates have soured at an uncomfortable rate. It seems as if gas and health insurance are competing with one another. As the price rises more people are struggling to maintain adequate health insurance plans. Affordable health insurance is becoming a rare entity.
Consumers often ask, "Why am I receiving a rate increase? I never made a claim." There are thousands of variables which factor into a health insurance rate increase. The insured don't have to make a claim to receive a rate increase. On the contrary, making a claim shouldn't result in a rate increase at all.
You are not alone. If you have received a notification for a rate increase, it is likely that anyone in your geographical area which purchased the same plan, with the same effective date, has received the same increase.
This is called risk pooling. A risk pool can also be thought of as a group. If you receive a rate increase, all within the same risk pool has received the same increase. Risk pools are used to group policies together. The insurance company will analyze the risk pool and its claims vs. premium history to determine if a profit is being made. If the profits are being eliminated by claims the insurance company will raise the premium to keep the risk pool profitable. This may seem cruel, but keep in mind, insurance companies are in business to make a profit.
The less people are insured, the more the cost of insurance goes up for those who do have it. It's a vicious circle. The more the cost goes up, more people opt to go without. When someone chooses to go without, they are taking the responsibility in the event that an accident or illness arises. Medical bills can easily exceed a price which the person can afford to pay. If the bill is not paid, the doctors and/or facility doesn't make money. The only way to make that money back is to charge the people who are paying. This results in a medical cost increase, which the insurance company eventually hands over to policy holders by raising the premium rate.
Of course there are other factors which contribute to health insurance rate increases.
Some expamples are:
- Technology and research
- Health insurance abuse
- Prescription drug price increases
- Lack of prevention
There are some things that you can do to help reduce your rate increases.
These include:
- Choose a low utilization plan type. (i.e. A high deductible health plan.)
- Add a deductible to your prescription drug card.
- Choose a plan with a rate guarantee time period. A two year guarantee is available through certain providers.
- Do not abuse your plan, such as going to the ER for a cold in the middle of the night.
- Opt for a plan without a doctor's visit co-pay. Instead have it work toward your deductible.
- Shop for health insurance often. Obtaining a quote is free.
The less first dollar type benefits a plan has, the better chance there is for a smaller increase. If a plan is being utilized by all of its consumers, the price will have to go up to stay profitable.
HSA plans were created to control utilization, therefore lessen rate increases. This is proof that the insurance companies are also concerned about the rising costs of health insurance. HSA type plans are often an affordable health insurance option.
Be wise while choosing your health plan. Choose only the benefits which you and your family will utilize. Choose a higher deductible if you are able to self insure the smaller charges. Again, due to cost of healthcare, technology, inflation etc, we will never stock increases all together, but we can help control the severity.