Comments on: Colorado Senator Morgan Carroll On Health Insurance

By: Louise

Louise — Tue, 22 Sep 2009 20:03:30 +0000

Don,
Good questions. I’m not familiar with large group, but small group premiums in Colorado are not community rated unless the employer specifically asks for it. Premiums are quoted based on the age of the employee, using 5 year age bands. Premiums for older employees cost more than premiums for younger employees – the same as how the individual market works.
As far as renewal premiums, it depends on the company. Some carriers in the individual market in Colorado use the same rating factors for existing policies as they do for new policies. So a 45 year old female will pay the same premium regardless of whether she has had her policy for 10 years, or just got it last month. Other carriers do not, and people on those plans will find that after several years their policy will be quite a bit more expensive than it would be if they were getting a new policy with the same company. Of course this leads to shopping around – which is great as long as the person is still healthy and able to qualify for another policy.
I believe that if policies in Colorado were to switch to community rating and guaranteed issue, there would be a significant increase in premiums for most people (perhaps not for older people, and for people who currently pay a high premium for a guaranteed issue policy because of pre-existing conditions). But if the provisions to require everyone to get health insurance pan out, I believe this might offset some of the rate increase.

By: Jim Sugden

Jim Sugden — Tue, 22 Sep 2009 18:50:14 +0000

As anyone who’s spent more than 5 minutes in the health insurance business knows, insurers are essentially amoral. What I mean by that is that they don’t introduce fairness or unfairness into policy rate structures or promote a social agenda. They just look at where the claims are coming from and adjust rates accordingly. The contention that insurers are acting “unfairly” in charging differing rates for men and women is an attempt to replace arthmetic with political theater.

But… this is essentially a non-issue. Insurers will collect the same amount of premium no matter how they split it between the sexes. It’s time for insurers to bow to political correctness and charge unisex rates. Let’s begin the process by unisexing the rate sfor Colorado’s Public Plan Option, CoverColorado. I would suggest that Sen Carroll introduce legislation to do just that. And, while we’re at it let’s make CoverColorado offer plans on a purely community rated basis, one rate for all regardless of age. What do those stupid acturies and underwriters know anyway?

By: Don Levit

Don Levit — Tue, 22 Sep 2009 14:56:30 +0000

Louise:
In addition to what you wrote, aren’t group policies more expensive, because they are community rated?
If the young and old paid the same rates in the individual market, what would happen to the premiums?
You also did not mention renewal premiums.
My family is paying higher premiums for a long-held individual policy than we would pay in the group market.

If Obama’s plan goes through, and individual policies are guaranteed issue AND community-rated, how would that effect premiums in Colorado?
Don Levit