Consumers in many instances face higher health insurance premiums than the price originally quoted them on their plan applications, according to new analysis from insurance-comparison website HealthPocket.
The research shows that 80 percent of U.S. health insurance plans raise premiums above the original quoted price for a portion of their applicants. On average, plans increased premiums for 18 percent of applicants, with plans in some states rarely increasing them and Pennsylvania plans raising premiums at the highest rate, 32 percent of applicants, the report said.
HealthPocket based its results on an analysis of 10,817 health insurance plans for individuals and families under the age of 65. The company said it used government health plan data "to produce objective, meaningful, and clarifying information and guidance" for consumers.
"Consumers cannot objectively compare health insurance premiums prior to application because insurers base their initial rates on the healthiest applicants, and for many these rates would not apply," said Kev Coleman, head of research & data at HealthPocket, in a release accompanying the survey results. "When insurers wait until an application is reviewed to reveal the true monthly premium, it is impossible for consumers to know what health insurance plan is the least expensive for their circumstances."
Beginning in 2014 under the Affordable Care Act, health status, sex and pre-existing conditions will no longer increase premiums above the quoted price. Age and smoking status can still raise rates, so older applicants will receive more expensive premiums than younger applicants, and smokers will pay more than non-smokers. However, unlike the current state of affairs, these premium increases can be reviewed prior to applying, making comparison-shopping more effective in 2014, HealthPocket said.
The analysis revealed that states including Maine, Massachusetts, New Jersey, New York, Oregon, Vermont and Washington had no activity in terms of increasing premiums after application. Those states use a form of community-based premium rating practice that requires insurers to disregard health status in determining premiums to charge. However, those states with "adjusted" community ratings are allowed to vary insurance based on some demographic criteria such as age or sex, the report said.