Rate Increase on New Policy
In some states, anytime an insurance company wishes to increase health insurance rates, they must submit the new rates and a letter of justification to the state Department of Insurance. The Department of Insurance will usually regulate how often the insurance company raises rates. It is not common for you to have a rate increase more than once per year. The fact that the insurance company must apply any rate changes to all existing plan members helps keep rate increases under control. They know that if they get too carried away with rate increases, they run the risk of losing their healthy members to other insurance companies. 1 CommentLeave a comment |
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I have only had my health insurance for 5 months and I just got a notice that my monthly payment is going up to $285 on January 1st. It was $240 and I thought that was expensive. The thing that makes me mad is that I haven’t even used my health insurance since I got it. How can they raise my payment if I never even had a claim? Shouldn’t it go down if anything?
Some insurance companies will guarantee your rate for a specified period of time, like maybe 6 or 12 months. However, unless you have this written guarantee, the insurance company is able to raise your rates whenever they wish. But, they don’t just raise the rates on your coverage. When they have a rate increases, that rate increase must be applied to every person that is currently insured under that health plan, and also to any new members wishing to enroll in that plan. Unlike auto insurance, the health insurance companies are prohibited by law from increasing your premium or canceling your coverage because of excessive claims. To verify this, you can call your insurance company and act like a new prospective member. Have them give you the rate for the same plan you are on and you will see that the new premium for January applies to everybody. This is assuming that they did not charge you a higher premium when you enrolled because you had a pre-existing condition or other risk factors, such as weight or smoking.
Is it legal for my employer, in Ohio btw, to raise the rates on our health insurance and so bring up the total health insurance cost without telling his employees and doing it OUTSIDE open enrollment? Last week, all of us got a memo with our paycheck from our employer stating that the insurance rates would go up beginning immediately. There is no open enrollment until later this year and there was not give any opportunity to opt out if anyone would want that. Can this really be legal? Can an employer just do this on his own and not offer an opt out?
Comment by George — June 30, 2009 @ 11:33 am