Can your health insurance company raise your rates after you get sick?
I’ve heard about pre-existing conditions and all, but what about getting seriously ill AFTER you have insurance? Let’s say you’re generally healthy, and already have heath insurance which you pay for yourself, at a reasonable rate. Then you get a long term illness, or get into a terrible accident, and need years of expensive care. Of course you keep your policy up to date… Can the company raise your rates by triple (or worse) if you get sick this way?
If you’re covered by GROUP insurance (through your employer, for example), your rates will NOT be raised simply because you got sick or injured. Those rates are based upon the group and while they may go up each year, they will NOT go up specifically for you.
However, if you have an individual policy, your rates could possibly be increased if you have an influx of claims. Unlike someone above me said, this is EXACTLY like car insurance. Your car insurance (which is an individual policy) is likely to go up if you have a large claim. Same thing is true of individual medical coverage. It’s just a sad fact of life. When you’re not part of a group plan, you are shouldering all the risk yourself. So if you incur a lot of charges, you may very well see an increase.
No – not yours specifically. Rates can be raised as a whole for all policyholders.
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Health insurance isn’t like car insurance – they can’t surcharge you after they take you on – they’re stuck with you in the same "rate group" forever, as long as you keep paying the monthly bill.
SO. If they raise the rates for the entire rate group – which happens every year – then yes, your rates go up. But only as much as everyone ELSES rates go up. There’s no surcharging just YOU.
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99% of the time the answer is no they can’t. Your medical bills are shared by everybody. That’s why when people abuse the system it drives the cost of care up for everyone. So, the next time that you’re in the emergency room bleeding and you see someone with a ‘bad cough’ then be angry at them. Emergency rooms are for emergencies and people that use them needlessly are abusing the system.
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yes they can; here is a case in point that i copied from consumer reports.
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And anyone with a pre-existing condition who has an individual health insurance policy must pay whatever rate the company charges. Although it is illegal in all states to kick people out of insurance plans if they become ill, in most states insurance companies are allowed to increase rates for individual health insurance policies as much as they need to cover the plan’s medical costs, plus a reasonable profit.
Companies also control their risk by using a maneuver known as closing a block or book of business. They stop accepting new customers in a plan, which kicks off a process known as a "death spiral."
Even if everyone in an insurance plan starts out relatively healthy, as time goes on, people get sick, and the cost to insure them rises. Once the pool is closed, costs for the remaining members rise inexorably. Healthier members find cheaper plans, but sicker ones are effectively forced out because they can’t afford coverage.
Once that process gets going, premiums on individual health insurance policies can rise at a breathtaking rate. Jesse Paul, 59, an Indianapolis lawyer, paid $25.50 a month for his individual, $100- deductible Prudential major medical policy when he took it out in 1980. Premiums rose steadily for years but at a pace that Paul deemed "rational in terms of medical costs." In 2003 the premium shot up from about $1,200 to about $1,900 a month at renewal.
When Paul complained to the state insurance department, he learned that the policy had been closed to new entrants for years, that he was one of only 400 to 600 customers left in the state, and that the premium increase was permissible under Indiana law. Paul reached his breaking point when he got his latest renewal notice in August; the monthly premium was now $4,284. He quickly found out he was uninsurable on the private market because he took medications for high blood pressure, high cholesterol, and allergies. He is now insured by the Indiana high- risk pool for a premium of $650 a month.
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so in effect, they will price you out if you get seriously ill or get a long term illness and it is legal. unless your state laws are different, you only hope you stay well enough so that your premiums don’t get to the point that you cant afford to pay and they have to continue to insure you.
this was only a part of the article from consumer reports that was published around december of 2007 and included other problems that people have had with individual health insurance.
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I guess it depends on the wording of your policy contract.
In my country, I can find medical / Health insurance policy that says "Guarantee renewal with no exclusion or premium loading during renewal".
What it means is pricing of premium will be on portfolio basis, persons who have claimed on the policy will not be singled out to pay more premium than others.
References :
If you’re covered by GROUP insurance (through your employer, for example), your rates will NOT be raised simply because you got sick or injured. Those rates are based upon the group and while they may go up each year, they will NOT go up specifically for you.
However, if you have an individual policy, your rates could possibly be increased if you have an influx of claims. Unlike someone above me said, this is EXACTLY like car insurance. Your car insurance (which is an individual policy) is likely to go up if you have a large claim. Same thing is true of individual medical coverage. It’s just a sad fact of life. When you’re not part of a group plan, you are shouldering all the risk yourself. So if you incur a lot of charges, you may very well see an increase.
References :
16 years in employee benefits/medical insurance