Rate Increases

August 7, 2006 by bob.

Q. My health insurance with Blue Cross keeps going up. This year it increased on the policy anniversary and last week I received a notice it is going up again because I am having a birthday next month. I almost never go to the doctor, yet they are increasing my rates. I have decided to sign up with Mid-West National of Tennessee. They tell me they have a plan with no deductibles and rates never increase. What do you think?

A. So many questions, so little time . . .

Health insurance premiums for all companies increase over time, no matter what you are told. And they increase whether you use the plan a lot or not all all. I noticed today that gas prices are up at my local gas station, yet I have not bought any gas in the last few days.

The point is, SOMEONE is using the health plan and EVERYONE has to pay for it.

SOMEONE is buying gas, even if it isn’t me, and it costs more for the station to refill their tank, even if I didn’t buy gas.

You did get hit with a double whammy. Carriers rate & rerate based on attained age + inflation. The first increase you got was due to inflation. SOMEONE is using the plan and it costs more to pay claims this year than it did last year. You just moved into a higher age bracket and statistically speaking, you are more likely to have more claims this year than in the past.

As for your choice in new carriers . . . all I can say is you have not done your homework. If you had you never would have opted to buy a plan with fixed benefits and a per hospital admission deductible before you can access the major medical.

Rates go up. The best you can do is learn to manage your risk, and your plan, rather than letting it manage you.

My clients still have rate increases, but they are not as much as they would be if they had followed the advice of other agents, or even bought without consulting someone. Many of my clients are paying less now than they were 4 years earlier.

Posted in Uncategorized | Print | No Comments »