According to HealthPocket, which compares and ranks health plans, about 80 percent of U.S. medical insurance companies traditionally have charged premium rates for medical insurance at a higher rate than initially was quoted. This means that approximately 18 percent of applicants paid more for their coverage than initially expected.
The reasons for the increased rates were related to the applicant’s weight, sex, smoking status and pre-existing health conditions. These price variations have made it difficult for individuals to compare accurately plan prices between insurance carriers. And every state across the country has individually regulated insurance activities, including allowances for premium adjustments after the initial quote.
Medical Plan Pricing Within Health Care Reform
Under the Affordable Care Act (ACA), rates quoted in the public exchange marketplace for medical insurance may be more predictable. Beginning in 2014, states will follow federal rules for premium pricing for the individual and small group health plans. The ACA prevents insurance carriers from denying coverage or increasing rates based on an individual’s pre-existing conditions, sex or health status. But they can adjust the rates according to the applicant’s age and smoking status, which may result in older people and individuals who smoke paying more than younger applicants and non-smokers.
Understanding Tax Credits and Subsidies
There have been numerous discussions about tax credits and subsidies that employers and individuals may receive under the ACA. It is important to note that only certain employers with fewer than 25 employees may receive tax credits for medical coverage. This credit is available only when purchasing within an exchange until 2015. And only individuals who purchase benefits through the public individual exchange can obtain advance premium tax credits to help with premiums. This subsidy will be applied to the medical coverage first and probably will not be large enough to cover stand-alone dental and vision benefit costs.