Figuring out health insurance rate requests is getting simpler, and you can weigh in!
By Dena Mendelsohn on Tuesday, May 6th, 2014
(This is the 2nd in series of blogs on health insurance rate review)
As we explained in our earlier blog post, this summer, health insurance companies must submit to state and federal officials the cost and coverage details of their insurance plans. In many states, consumers can weigh in on the process. Although Obamacare simplified the math behind setting insurance rates, there is still some calculation to do, and it’s up to all of us to keep insurers honest.
In these rate filings, insurers will justify the base rate for each health insurance premium. From there, they can make individual adjustments based on just a few factors: age, geography, tobacco use, and number of covered family members. States are allowed to ban age and tobacco rating, and California has done so for tobacco.
Prior to the health reform law, insurers could also take into account your health status and gender; that is no longer allowed. But you may be surprised that age and tobacco use are still part of the equation. What Obamacare did is limit how the age and tobacco use factors can be applied in states that have not banned the practice altogether. Where age can be taken into account, insurers can charge older adults up-to triple the rate of a younger person. Similarly, in states that permit the practice, insurers may charge people that use tobacco products up-to 1.5-times the non-tobacco user’s rate. Just because insurers are allowed to use these rating factors doesn’t mean they have to.
The comment period after insurers submit their rates is your chance to get involved. This summer, experts at organizations like Consumers Union will take a deep dive into the factors health insurers use in setting their base rate and we encourage you to do so as well. We put together a comprehensive guide to challenging rate filings. If you’d like a copy, email dena [dot] mendelsohn at consumer [dot] org.
Even if you aren’t ready for “deep diving” into rate setting, you can still get involved with a quick comment about how the rate change will affect you and your family. For details on what information is available in your state, check out our guide. Want to know more than that? Head over to our rate review resources webpage.
Once you take action, please let Consumers Union know by emailing dena [dot] mendelsohn at consumer [dot] org or tweeting to @CU_Health. And don’t be shy: let everyone know the steps you take to contain health insurance rates by tweeting with hashtag #ratereview2015.
Keep your eyes on this blog. May is the start of the rate review cycle and we will be posting a series of blogs helping consumers navigate their way through the process. For more details in the meantime, check out Consumers Union’s rate review webpage and click here to join our movement and receive periodic updates and communications from Consumers Union Advocacy on this and other topics of interest to consumers like you.