Insurers Consider Waiving Premium Hikes for Pre-Existing Conditions
One of the great ironies of the insurance system is that when you’re sick and need the protection of health insurance the most, you can expect to pay a lot more for your premiums. It’s practically one of the certainties of life, like death and taxes, that are invariably true for everyone. But is that about to change?
Health Plan Companies Consider Removing Pre-existing Condition Penalties
For the first time, the health insurance industry has been talking about the possibility of ceasing its practice of charging much higher premiums for health insurance applicants with pre-existing medical conditions or a history of medical problems.
The offer comes from America’s Health Insurance Plans and the Blue Cross and Blue Shield Association, and – make no mistake – this is a big deal.
In the wake of the Obama administration’s plans to reform America’s health care system to provide coverage for the estimated 48 million who are currently uninsured, these insurance industry groups have stated their willingness to make a start at charging fair premiums for all Americans.
In their letter to key senators, the two organizations spoke of their willingness to “phase out the practice of varying premiums based on health status in the individual market” if health coverage becomes mandatory for all Americans.
Why is this so important? Because it means these organizations are willing to move away from the risk-assessment factor of insurance premiums – meaning that people who have a history of medical problems won’t be penalized when it comes to getting health insurance.
It’s not all sunshine and roses, however. Insurance companies will still charge different premiums based on other factors such as sex, age, and location. And certain groups, such as small business owners, have been left out in the cold. Small business owners are often hit hard by risk-assessment, because if just one worker becomes seriously ill premiums can sky-rocket the following year.
Financial Motives of Changing the Pre-existing Condition Health Insurance Policy
And, of course, the motive for all of this is purely financial. Insurers are simply trying to gain political support in an attempt to stall the creation of a government insurance plan that would necessarily compete with private insurers.
But whatever the motive, the outcomes could certainly be positive. The insurance industry has already discussed support of a national goal to prevent insurance costs rising, and, in its bid to fend off the competition, has also offered to end its practice of outright denying health coverage to people with pre-existing conditions.
photo credit: SavaTheAggie
