Q. I don’t qualify for a subsidy, and my premium is going way up for what the insurer tells me is a comparable policy. Why is that?
A. Insurers base premiums on a number of factors, including medical inflation and the cost of implementing insurance rules. A report on the California market done by Cosway at Milliman estimated that medical inflation and changes from the health law could add about 30 percent to the average premium in California. The biggest chunk of the increase was attributed to insurers being required to accept everyone, even those who are ill. That requirement polls well with the public. But it makes insurers nervous because they can no longer reject the costliest patients. While consumers like George Anders of California says he supports the concept, he’s not happy that his current plan is being discontinued. Anders, a contributing writer for Forbes and author of a critique of HMOs called Health Against Wealth, said the premiums for a new policy that covers him, his wife and two children will about double, although his annual deductible may go down. “As a social policy, I’m glad to see everyone get coverage, but if you’re going to add cost to the system, I’d like to see it spread equitably,” perhaps through an across-the-board tax, rather than just hitting policyholders, he said.
Q. I’m healthy. Why do I have to pay for people who are sick?
A. Except for a fortunate few, everyone is likely to develop some kind of health problem or face an accident sometime in their lives. Policy experts and regulators say insurance works best when it spreads risk across a large group of people. Your house may not burn down this year, but you pay for insurance coverage just in case.
Q. I’m a single man, why do I have a plan with maternity coverage?
A. Again, it’s about spreading the risk. Men may not need maternity care, but women don’t need treatment for prostate cancer and those costs are baked into the rates, too. Older men, and women past child-bearing age, are more likely to need treatment for heart disease, artificial hips or other illnesses that younger men and women are less likely to need. “The whole concept of insurance is you can’t just pick and choose the benefits you want,” said Praeger. If people - especially older ones - get premiums based solely on what they might need, she said, “it could cost a whole lot more.”
Q. What if it turns out they’ve charged too much for the new coverage?
A. Under the health law, insurers who fail to spend at least 80 percent of their premium revenue on medical care have to issue rebates to consumers. Those rebates for 2014 policies won’t be seen until 2015, however.
Wed, Oct 30 2013