What Affects My Insurance Rate?
Your health insurance premium amount isn’t random. A variety of factors affect how much you’ll pay every month for your coverage. Under the ACA, there are only a handful of things that can affect your health insurance premium. The state you live in can limit how much these factors affect your premium. If you’re purchasing an individual plan, only your age and zip code affects your premium. However, if your coverage is through your employer, the health insurance company bases premiums on the information for the entire group.
Factors That Can Affect Your Premium:
Age
The older you are, the more likely you are to file a health insurance claim. This makes you potentially “more costly” for your insurer, and your premium will reflect that.
Tobacco Use
Need another reason to kick the habit? If you use tobacco, your health insurance company can charge you up to 50 percent more than someone who doesn’t use tobacco.
Location
In Las Vegas, Nevada, you may pay a higher premium than someone in other areas of the country for the same coverage. In Clark County, your rates may be lower than some rural Nevada counties, but it all depends on differing factors. Some of these factors may be: the cost of living in your area, total number of members you have in your county (fewer members can make the premiums higher), state and local rules, and differences in competition. These all have a big effect on your premium.
Individual vs. Family Enrollment
When enrolling in a family plan, it is going to be more expensive to insure four people rather than one person. A plan that covers you, your spouse, and/or your dependents will cost more than an individual health insurance plan that covers only you. Insurance companies do not charge after the 3rd child. So, child 4 + costs $0 more.
Plan Category
Some plans come with a high premium but provide outstanding coverage. Other plans have low premiums but higher deductibles and out-of-pocket costs. A “Gold” plan will cost more than a “Silver” plan because generally the Gold plan has a lower deductible. A Silver plan will cost more than a “Bronze” plan because the Silver plan generally has a lower deductible.
The 80/20 Rule
Insurance Companies Can’t Gouge the Insured
Have you heard about the “Medical Loss Ratio”? This ACA (Affordable Care Act) provision is called the 80/20 rule and keeps your insurer from bringing in high profits from high premiums.
The 80/20 rule states that a health insurance company must spend at least 80 percent of the money they bring in from premiums on actual healthcare costs/claims and activities to improve the quality of care. Twenty percent of the money they bring in from premiums can be used for administrative costs, marketing, and other overhead expenses. If they’re selling policies to a large group of more than 50 employees, 85 percent of premiums must be spent on care and quality improvement.
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Health Insurance | HIPAA mandates changes
HIPAA mandates changes to electronic medical documentation of patient records to begin 1/2013 through 1/2016.
Exchange Notices
Exchange Notices are coming out informing employees about the Exchanges and how to access them and what they are.
New Health Care Terms – Affordable
IF the insurance is greater than 8% of your “Modified Adjusted Gross Income”, it is considered “unaffordable” and you are not required to buy insurance.
Health Insurance Quotes
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Factors that Cannot Affect Your Premium
Gone are the days that a health insurance company could charge you high premiums just because you have a pre-existing condition, if you were a female of child-bearing age, or a male closer to retirement. The ACA does not allow health insurance companies to take your current health status or your medical history into account when calculating your premium. Health insurance companies cannot charge men and women different prices for the same plan.
Health Insurance Premium Determined By Family Size & Income
ON Exchange (when receiving a Subsidy)
Your health insurance premium is determined by your family size and income IF you buy your health insurance “ON Exchange” (meaning you qualify for a government “subsidy” where the government helps you pay for your health insurance). The amount of subsidy you are eligible for will fluctuate based on age, your zip code, the number of people in your household and obviously your household income.
The older you are, the more subsidy you’ll be qualified for, even if a younger individual makes the same amount of money with the same number of people in the household. But, after receiving the subsidy, the premium for the younger person compared to the older person will be the same no matter what the age is, if the number of members in the household, the income, and the zip code are the same.
It is VERY IMPORTANT to stay on top of your account when you get a subsidy from the Government. Anything that would change your tax return will be your responsibility to update. If your “Household” changes, for example, adding or removing a child, marriage or divorce, any income changes such as wage increase/decrease, withdrawing social security, taking money out of a 401K plan, etc. you will need to report it.
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FREE Insurance For 4+ children in Large Families – OFF Exchange
In Nevada, if you are buying your health insurance plan “Off Exchange”, meaning directly with the insurance company without a subsidy, a family with over 5 individuals (2 adults and three children) or a single parent with more than 3 children, the 4th child is free! For example, the oldest of 10 kids would cost the same as 3 same aged kids.
Prescription Drug Prices and Health Insurance Premiums
In the United States, prescription drugs are estimated to comprise about 17% of overall personal health care services. Unsurprisingly, health insurance companies must figure high drug prices into the premiums they charge their customers.
What’s to Blame for High Drug Prices?
The high cost of prescription drugs in the United States can be blamed on the fact that our government grants protected monopolies to drug manufacturers, along with the requirement for coverage for government-funded drug benefits.
In Europe, drug costs are capped, and in some cases, costs are pushed down, meaning that drug companies actually have a reason to keep costs affordable. By contrast, the U.S. government doesn’t regulate prices the way that other countries’ governments do; in the United States, pricing is left entirely to market competition. On top of that, generics for popular drugs hit the U.S. market more slowly than they do European markets. This means that when it comes to treating certain conditions, Americans simply have fewer prescription drug options.
High Drug Prices and High Health Insurance Prices
While the high cost of prescription drugs is just one of the many factors responsible for the high cost of healthcare in the United States, it is a factor worth noting. Although health insurance companies are aggressive in negotiating with the drug companies for lower rates, prescription drug spending in the United States far exceeds that of other high-income nations. Because most people will rely on at least one prescription drug at some point in their lives, health insurance companies must figure the high cost of drugs into their premiums.
What Happens If You Don’t Pay Your Premium On Time?
Life happens, and while you should make every effort to pay your health insurance premium on time, health insurance plans generally will have grace periods. Your bill due date will vary by insurance company, but generally all insurance companies’ premiums are due on the 1st. It is important to check with your insurance company. You may have a grace period of 30 days, or if your insurance plan is through Nevada Health Link (on-exchange), it may be up to 90 days. It is NOT a good idea to get behind, however. Most people that fall behind end up losing their coverage back to their last payment made, because coming up with 90 days of premium is not feasible for most. If it is a new policy, the premium usually needs to be paid before the policy starts. Also, insurance companies will consider you “late” on the 2nd of the month if the bill was due the 1st of the month. It is especially important that if you can’t make your premium payment on time, speak with your insurance agent to see what flexibility your policy may have.
What Is a Grace Period?
The grace period is a short period after a payment is due that is allotted to avoid cancellation/termination. In health insurance, as long as you make your payment during the grace period, you will avoid losing your coverage.
If you have a Marketplace plan through Nevada Health Link and you qualified for an advanced premium tax credit, then your grace period is usually 90 days, as long as you’ve paid at least one month for the benefit year. If you are behind on your payments, however, benefits may not be covered until the full payment has been caught up. If you do not qualify for a premium tax credit, your grace period may be different. Your health insurance agent can give you information on the grace period for your policy.
What If I Miss My Grace Period?
If you do not make your payment during your grace period, then your health insurance policy is canceled retroactive to the last date your plan was paid for. In other words, if you miss your July, August and September payments and your policy is canceled, then no medical expenses incurred since the end of June are covered.
It is important to note that if you want to keep your health insurance beyond the grace period, you must completely catch up on payments. You cannot just stay three months behind on payments and maintain your coverage.
Can I Re-Enroll During Open Enrollment?
If your health insurance plan was terminated due to non-payment, then you will have the opportunity to re-enroll in a health insurance plan only during the next “Open Enrollment” which is usually November 1st through January 15th of each year. There is a catch, though. According to market stabilization rules that were finalized in 2017, health insurance companies may be able to recoup past-due premiums.
If you enroll in a plan offered by the same health insurance company within 12 months of your policy having been canceled, then the health insurance company can require that you pay the past-due amount before your coverage is in effect. This may be either one month or three months of premiums, depending on the length of the grace period. Alternately, if you are re-enrolling within the grace period, the health insurance company may require you to pay your past-due premiums.
The grace period does not reset at the end of the policy term if it auto-renews. This means that if you miss November and December payments and your plan auto-renews in January, you still need to catch up on payments to keep your coverage.
Nevada Insurance Enrollment Can Help
Picking the right health insurance plan for your needs and budget is a challenge, and too much or too little coverage can cost you. Our health insurance agents are here to help you choose the health insurance plan that fits you and your budget. Give us a call to get started and let an experienced, local health insurance agent guide you through enrollment.
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