With the implementation of the individual mandate beginning January 1, 2014, one of the main intentions of the Affordable Care Act (ACA) is to broaden insurance coverage and reduce the number of uninsured. One of the most prominent groups among the uninsured that the ACA is looking to cover consists of young, healthy adults. It is common belief that healthy people in the age range of 18-30 years old avoid buying health insurance because they believe themselves less likely to suffer serious illness or injury. A recent study by Kaiser Family Foundation, however, shows just the opposite.
Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced last month that proposed rate increases by health insurance carriers were excessive and would affect over 42,000 residents in 9 states.
"What is the average rate increase of an individual policy?" If you sell individual health insurance, you probably get this question all the time. You probably respond similar to this: The price of an individual health policy is based on your age and your health at the time of application—but once insured, your premium cannot be increased because you become ill. Your renewal premium will increase when you enter a higher age band (typically every 5 years) or with general medical inflation—based on the claims of a very large group of people in your state who purchased similar personal policies. Some states set limits on annual increases regardless of medical inflation. Depending on your state, you should expect your premium to increase 5% to 15% each year from an initial price much lower than group coverage. If you are healthy and don't like your proposed annual renewal premium, you can always shop around for a new policy just like you do with auto or homeowners insurance. Nationally, more than 300 different carriers, including 76 Blue Cross Blue Shield companies, offer personal polices. Most consumers are happy with this explanation. It answers the question directly and sufficiently. But (if you're like me), you want to see the numbers behind the explanation. So, for you agents (and consumers) out there who want a data-driven answer to the "What is the average rate increase of an individual policy?" question, keep on reading..... Before you read on, you should understand where I am getting this data. Since 2003, eHealth, Inc (which owns eHealthInsurance.com) has been providing research and advice based on the individual health insurance policies purchased by its customers (exceeding 2 million in 2009). On their www.ready2connect.org website, eHealth makes available numerous studies and customer surveys on individual health insurance each year. Thank you, eHealth. Below, I have merely pulled the pertinent data from the eHealth studies. For example:
Disclaimer: The information provided on this website is general in nature and does not apply to any specific U.S. state except where noted. Health insurance regulations differ in each state. See a licensed agent for detailed information on your state. Zane Benefits, Inc. does not sell health insurance.