Consumer’s Health Insurance Blog

If you live in Massachusetts, then you may have received a notice in the mail from the Commonwealth Health Insurance Connector Authority about buying health insurance (as reported at the Health Business Blog). They’ve got a scan of the notice up on the blog, which is bright red! Buy Health Insurance or Else!

The penalty is $219 per individual and applies if you don’t have health insurance, or if you don’t have enough health insurance. Massachusetts is one of a handful of states that has community rating. Community rating is where everyone in the community pays the same rate, with minor adjustments such as where your community is in the state (according to the National Association of Health Undewriters , NAHU, Massuchusetts community rating “adjustments are limited to age, geography and benefit level on a 2:1 basis”). With Community Rating, everyone can get health insurance, because it is guaranteed issue. However, since everyone pays nearly the same rate, health insurance rates in states with community rating tend to be significantly higher.

In the end, this means that those people who are very healthy don’t buy health insurance. And those with moderate incomes will have a hard time justifying the expense of health insurance, healthy or not. Community Rating benefits anyone who has a medical condition, since their rate will be lower than in other states, where they might not even be able to get health insurance. In Massachusetts, an insurer selling insurance to an individual cannot use a person’s medical condition (medical underwriting) to determine the rate or whether the individual will be insured.

Since healthy people of moderate means will go without health insurance, they put themselves at financial risk, and when they do have a medical problem and declare bankruptcy, the health system must absorb the cost.

So it makes sense to want everyone to buy health insurance. But if you’re healthy and have the choice of paying a $219 penalty for a whole year versus at least that much each month for health insurance that you never use, which are you going to choose? I put the health insurance high on my list of priorities, and have always paid for and had coverage. But at the same time, I’ve spent an awful lot on premiums, with very little in claims. What would you do?

Jonathan Pletzke is a consumer expert on health insurance and author of the health insurance book Get a Good Deal on Your Health Insurance Without Getting Ripped-Off, available online and at bookstores nationally. Additional details can be found at the consumers health insurance book and resources website www.BestHealthInsuranceBook.com. Copyright 2007-2008 Aji Publishing.

Tags:   Community Rating · Guaranteed Issue · Health Insurance · Health Insurance Connector Authority · Massachusetts · National Association of Health UnderwritersNo Comments