Health Insurance

Post date: Jul 13, 2011 7:29:56 PM

Unless you're one of those people that constantly flies below the radar, you have used health insurance and probably very recently.

Up until recently, health insurance varied widely from state to state and was heavily regulated by each states individual insurance department. That has all changed now due to a new federal charter on health insurance that may or may not last. If it does not, this post will be updated to eliminate this paragraph.

In New York health insurance rates are determined more by your zip code than your health. There is no medical underwriting, therefore the rates or premiums are much higher for healthier individuals than in states that allow medical underwriting, and much lower for individuals with medical issues than other states that allow medical underwriting.

Unlike most other insurances whereas the larger number of participants (insured clients) the lower the overall cost per person; health insurance in NY tends to get more expensive when a company has a larger clientele. This is do to adverse selection. Adverse selection happens when people that have an insurance claim that is waiting to happen due to a prior condition or symptoms of a potential condition, all flock to the company that has the lowest rate for insurance; out of fear that their out of pocket costs may get very high. This only happens when an insurance company can not underwrite their clientele in advance. The flip side to this is that in a medically underwritten program, those that need coverage the most may not be eligible or would have to pay an exorbitant amount of premium just to get coverage that may not even be adequate.