Study says individual health insurance too costly

[fencesitter]

http://www.latimes.com/business/investing/la-fi-insure14sep14,1,4516552.story?coll=la-headlines-business-invest&ctrack=1&cset=true


Study Says Individual Insurance Too Costly

Eighty-nine percent of health-coverage shoppers can't afford policies or are rejected.
By Lisa Girion, Times Staff Writer
September 14, 2006


Individual health insurance — often touted as an alternative to employer-based group coverage — may be an option for the healthiest and wealthiest. But a study due out today suggests that the poor and sick need not apply.

The overwhelming majority — 89% — of working-age adults who shopped for health coverage in the individual market over the last three years were rejected for health reasons or found it too expensive, according to the study by the Commonwealth Fund, a private foundation that sponsors independent research on health and social issues.
Coverage was not affordable for 58% of the applicants, and 21% who had a medical condition were turned down, charged a higher premium or sold a policy that excluded the existing problem from coverage, the report said.

Individual insurance also is less affordable than employer-sponsored coverage, the study found. Two out of five people with individual coverage spent 5% or more of their income on premiums, compared with one out of seven people with employer coverage.

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[whistle]

1. What do companies with large group coverages have to pay

...i.e. Disney Company, Microsoft, JP Morgan etc.? Any stats on that? How about the U.S. government with their health program for 2.8 million government employees, how much are they paying for health insurance?

[Coyote_Bandit]

7. Most large companies

do not have coverage through a single insurer for any of their insurance coverages.

Typically, they will self insure up to a pre set limit then another carrier will take a predefined limit and yet another carrier will take an additional predefined limit and so on. For claims all companies potentially required to extend coverage will participate in settlement negotiations and/or litigation. Ultimately any kind of insurance coverage for large companies almost always results in some level of self insurance and multiple insurers picking up different layers of coverage. In the industry it is referred to as layering. If a company is self insured up to $1 million then all claims under one million dollars regardless of their aggregate value remain the sole responsibility of the company to pay. Same principle applies to layers of coverage in excess of $1 million.

For employee health coverage a single company is designated as the issuing company. It is responsible to process all claims and all coverage issues are determined pursuant to their policy language. The company may utilize a different front company in different geographic regions. Sometimes large companies further reduce their insurance costs by processing claims including health claims internally.

Layering coverage is different from reinsuring coverage. Layering is an arrangement by the insured company to keep the first X dollars of coverage as self insured with the next Y dollars of coverage going exclusively to company A and the next Z dollars of coverage going exclusively to company B and so on. Reinsurance is an agreement among the insurers themselves to allocate premium and claims amongst multiple insurers to reduce overall exposure. Typically there are multiple reinsurance agreements - one regarding overall exposure and others limited to specific or catastrophic risk exposure. The insured company generally has no knowledge of the reinsurance arrangements among its insurance carriers. Layered coverage typically involves self insurance plus coverage through 5 to 10 additional insurers. Reinsurance contracts commonly have as many as 30 or more company participants.

[kurth]

2. It's a freakin' joke

If you're not in your twenties, anything less than perfect in your medical records is cause for rejection or exclusion.

[rodeodance]

4. insurance companies aim for 'well' clients ONLY. It has always been

that way.

[rodeodance]

3. I am sending this toall my Congresscritters!! Dems need to make this

a priority!

[ForFuxakes]

5. First Hand Knowledge

Had a heart attack at the age of 32 four years ago and I was told I needed to wait 5 years before I could get coverage...Have not purchased my meds now for two years after losing my health Insurance through employment.

Thanks God my cardiologist gets samples and passes them on...

[Richard D]

6. Doesn't this fall into the . . .

. . well DUH!catagory?

[valerief]

9. You're right. Med insurance is just legalized extortion. Protection

money that doesn't protect.

[raccoon]

8. Sometimes individual insurance companies will insure you,

but will attach "riders"--refusing to pay anything at all for treatment of a pre-existing health condition(s) you already have.

[midnight]

10. This is such an important topic. I wish I found this earlier

so I could of voted it up. It is such a bunch of crap to pay for insurance,and then have the insurance co. not pay for treatment that your doc. wants to provide for the patient.