My initial reaction is . . . . So?
Insurance is a risk assessment, risk assumption business. It doesn't matter if you are discussing life insurance, auto insurance, homeowners insurance or health insurance.
The underwriter reviews your application and makes an offer (or not) based on a financial evaluation of how much premium needs to be collected to cover the risk.
But apparently some folks think it is UNFAIR to charge some people more than others.
Got an insurance quote? Don’t expect it to be accurate.
About 80 percent of U.S. health insurance plans raise premiums above the original quoted price for a portion of their applicants, according to new analysis.
At first I thought of challenging the 80% figure since roughly 70 - 80% of my clients do in fact get a standard rate. But then I reflected on the folks that apply direct through my site and remembered that probably 90% of those either never complete and submit the application or are rejected for coverage.
Apparently there are quite a few folks out there who believe applying for health insurance should only require "name, rank and serial number" and others truly believe you can buy health insurance once you have been diagnosed with cancer.
So why do so many of my clients get standard offers?
Because I pre-screen every one of them and let them know if they are wasting their time or not.
“Consumers cannot objectively compare health insurance premiums prior to application because insurers base their initial rates on the healthiest applicants, and for many these rates would not apply,”
Well duh!
The same can be said for auto insurance, life insurance and even bank loans.
What idiot thinks everyone should be charged the same rate for health insurance, regardless of your risk profile?
Who in their right mind would think a 5' 8" 350 pound smoker should pay the same rate as a non-smoker the same height that does not buy clothing in XXL sizing?
States including Maine, Massachusetts, New Jersey, New York, Oregon, Vermont, and Washington had no activity in terms of increasing premiums after application. These states use a form of community-based premium rating practice that requires insurers to disregard health status in determining premiums to charge.
Well here's a heads up.
Those states already have a form of Obamacare in place (guarantee issue, community rating or both).
They also have fewer carriers (usually Blue Cross and one or two others) and . . . they have some of the highest health insurance rates in the country. It is not unusual for someone in NY to pay 2x or 3x what they would pay for a similar plan in Georgia.
So which is better?
Paying a fair premium based on your overall health or everyone, regardless of health pays the same rate?
Come 2014 it won't matter.
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