California health
insurance
-
California health
insurance basics
-
What are rate increases based on?What are California Health
Insurance Rates Based On?
This is a very important question that we are
asked frequently when premiums increase.
It's
important to understand the concept of health
insurance and also what affects your particular
rates.
Let us first take a look at what drives
Individual and Family plan rates.
You can always run your quote here:
Age and Area effect on health insurance
rates
Your individual health insurance is based on
your age and the zip code you live in.
Zip code
can swing rates but your age is really the
driving factor.
Average health care costs double
with each decade of a person's life.
Typically,
you are grouped together with people in your
area and a certain age band.
For example, if you
are 43 years of age and live in Los Angeles, you
will be grouped together with people in the same
general area within the 43 age range.
All these
individuals form their own "risk pool" which
means that you share or average your medical
costs and claims among the entire group.
This is
essentially how health insurance works...it's
spreads an individual's risk among many people.
If you undergo a catastrophic health condition
that costs $100,000 in a single year, you do not
directly feel that yourself and your individual
rates do not go up in proportion to this claim.
This is very different from car insurance where
your premiums can go up if you submit a claim.
The rates typically go up each year but if there
are $100,000 people in your risk pool, your
individual premiums will go up $1 as a result of
the large claim.
In a nutshell, you now
understand the entire purpose of insurance with
this one example. $100,000 can put one person
into bankruptcy but it has very little effect on
100,000 people.
As for area, the medical costs of a given
area tend to be different from other regions of
the State.
This is pretty reasonable as many
other economic factors vary by area such as real
estate prices and other basic living expenses.
It used to be that LA county and the larger
metropolitan areas were more expensive but rural
areas have crept up if not surpassed them as
their is a lack of competition among medical
providers in those areas.
If your county only
has one hospital, there is not much incentive
for them to keep the rates competitive.
A few important notes about individual family
health insurance plan rates in California.
For a young child, the newborn to age one
rate is almost double the rates from age 1 to
age 18.
The first year of life is typically
accompanied by more frequent visits and well
baby check-ups which start to settle down after
age 1.
With the ACA law implementation, health
status and pre-existing conditions no longer
factor into your rates.
Health insurance rates in California increase
on the month or the 1st following your birthday
when you enter a new age band.
It is not like
life insurance
in California where your rates are based on the
age you originally purchased the coverage on.
After ACA, rate increases associated with age
generally occur at open enrollment at the
beginning of the year.
All of the plans have seen increases on an
annual basis but the richer plans (HMO's and
richer PPO plans) will likely increase at a
faster clip and tend to be more expensive.
Find
out more information on how to gauge the
benefits of high deductible health plans such as
the HSA (Health Savings Accounts).
Costs associated with maternity coverage is
not going to affect an individual in their 50's
and 60's and to a lesser extent, people in their
40's. It will impact costs for people in their
20's and 30's if the plan covers maternity.
You can access the online application here:
California Small Group health insurance
rates
RAFF or increases for a specific company
associated with the health or size of the group
no longer applies to company health rates with
the passage of the ACA law.
Otherwise, the age associated increases and
zip code factors still play a part in your
rates.
We hope this is a good explanation to what
your rates are based on. You can find additional
information on trends and the basis of health
insurance rates below.
Other important concepts to help you
understand your California health insurance
rates are:
Best values on the market now
How health subsidies affect your Covered
California rate
You can run your
California Plan Quote here
to view rates and plans side by side from the major carriers...Free.
Again, there is absolutely no
cost to you for our services. Call 800-320-6269 Today!