Insurance is fundamentally a sharing of risk and, while you may not have had a bad claim year, someone in your risk pool did. Another factor in setting premiums is the increasing cost of care particularly in the area of prescription drugs. Additionally, since 2012 new taxes and fees were imposed on health insurance companies to help pay for the Affordable Care Act. Each of these continue to drive up all of our rates.
Additionally, starting in 2014 these benefits were added to all of our coverage:
- No more pre-existing conditions limitations can be imposed;
- Everyone is guaranteed coverage irrespective of their health or claims history;
- There will be no annual limits on coverage;
- Rates will be the same for male and female insured;
- “Older” insured’ premiums can be no more than 3 times those of “younger” insured;
- Smoker rates can be no more than 1 1/2 times those of non-smokers;
- “Essential benefits” will be provided with no lifetime limit;
Each of these benefits has great merit, but each also resulted in increased costs to the system. Many of the provisions listed already applied to group insurance and we have seen their impact in the past as premiums were higher than comparable individual coverage which did not require the same mandates.
This brings us to two questions:
First, is there an incentive for us to change our behavior to try to reduce costs and make health insurance more “affordable”?
Second, is it really possible to meet the political promise of guaranteed access to cheap coverage with no pre-existing conditions?