Health insurance premium increases?

Question

I have an individual health insurance policy in the state of Georgia with American Medical Security. I was diagnosed with lymphoma some 6 or 7 years ago. Since that time my premium has increased for my family from $600/month to $1200/month. Because I have a pre-existing condition, I can't change to another insurer. If I had been working for a company and had been in their group policy, I would be protected from these increases. Actually the whole group would have absorbed my costs. Is there no limit to how much they can increase my premium? Is there no legal protection from these increases?

Answer 1

afaik, none

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what happens with some insurers and in some states is that a new pool of applicants of each age group starts every year.  

suppose that an age group is everyone 20-25, 26-30, 31-35, 36-40, etc.

then everyone who first buys their product in 2002, for example, and is in the 31-35 age range becomes one insurance pool.

this pool stays together for as long as they continue to buy from the company.

no one is added in future years, but people do leave.

Who leaves?  everyone who gets a job that has group insurance leaves.  these people tend to be more healthy than the average person in the pool.  thus, the average risk in the pool increases and so do premiums.

also, those who die or can no longer afford the buy the coverage leave.  these tend to have poorer health than the average and the average risk in the pool decreases and so do premiums.

plus, people who are in good health and object to the premium increases change companies to a different insurer.  as you've figured out, these people tend to have relatively good health and so their leaving causes risk and premiums to increase.

people who move out of state also leave the pool.  and they also tend to be relatively healthy and thus the average risk and premiums increase.

on balance, the risk, and thus the premiums, for every pool always increases every year.

no ... there is no limit.

***

the only solution I know of is for government to mandate [pass a law] that everyone of the same age range shall be included in the same pool.  some states do this -- it is called "community rating"

I don't think georgia does.  most states do not.  It makes the initial purchase of insurance more expensive for everyone because they're buying into a pool with higher risk and cost individuals in it.

***

yes, there are other possible solutions at the government level.  most of them look like either nationalized health care or nationalized health insurance.

Answer 2

Insurance companies can increase their rates based on losses paid out and premiums taken in....BUT....they have to raise the entire CLASS of business to be legal.

I think that I would call Commissioner John Oxendine's office at the Department of Insurance and ask for a ruling on the issue!  You might be surprised to see what happens when HIS office gets involved!

Consumer Services: 404-656-2070 - they may end up directing you to the Life and Health Division, but, I think I would start here.



Good luck and I hope this helps!

Answer 3

A group policy may or may not be cheaper, it depends on the health of the group and the age for a small group.  And a large group factors in health conditions such as cancer, heart problems and premature births.  

But, have you thought about switching your family to another individual policy and you staying on your current policy.  That way if they are all healthy, they would get preferred rates.  It would be a pain to have two individual policies for the family, but it might be cheaper.

Answer 4

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