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Recent Observations

Many people in Colorado are losing their jobs due to the downturn in the economy, just as they are in other states. Layoffs have increased the number of people in need of health insurance that contact us at Colorado Health Insurance Brokers. The people that I have spoken to recently include long-time residents of the state as well as those that have moved to Colorado to look for a job.

Since most of these people have been insured through their employer in the recent past, and in some cases, for several years, they indicate they are surprised and confused by what they find in the market. The need for health insurance can add stress to the loss of a job and can be very confusing. My conversations have included several recurring subjects that I feel are worth discussion.

One of the first things people discover when looking for individual (or personal health insurance), is that it there may be substantial differences in the coverage and rates from the group plans under which they were previously insured. This is due to the fact that employer group coverage and individual health insurance are governed by different laws. Group coverage in Colorado can not consider pre-existing health conditions for underwriting purposes for groups of two or more. This is not the case with individual coverage. Individual coverage is underwritten and pre-existing health conditions may result in increased rates, exclusion of coverage for those conditions or a declination of coverage if an insurance carrier considers them serious enough. As an aside, pre-existing conditions are usually defined as an injury or illness that occured during the specified time referred to in an insurance application. Depending on the type of illness or injury and the specific insurance company; the period in question may range from six months for minor injuries or illnesses up to ten years for major illnesses or injuries such as cancer or other major illnesses.

Individual insurance is usually not required to cover specific pre-existing conditions like maternity, non-biological mental illness, cancer or diabetes. Many people are shocked to find this out and indignantly express their feeling that “my employer insurance covered this”. Individual insurance may not include these features in a basic plan and consumers should shop for a plan that may include these coverages or allow them to be added to a policy. This difference also accounts for one of the reasons that group health insurance can be more expensive than individual coverage. Since individual insurance can exclude coverage for the relatively small percentage of the population with major illnesses that consume a high percentage of costs; the cost for individual coverage is usually lower.

Many consumers are also surprised that women (including children) are more expensive to insure than men. A recent New York Times article indicates this discrepancy may be as much as 49% more in some states. Insurance companies indicate the difference is due to the fact that women consume more health services than men in general and due to health issues that may arise due to childbirth. The difference in rates varies by insurance company and the type of plan under consideration. This should be a consideration when shopping and consumers should review costs of different types of coverage (copay versus HSA qualified plans) as well as between different insurance carriers.

Shopping for insurance is a learning process for consumers as well as for me as an insurance broker. I learn new things about the products and companies we represent as I am asked to research coverage and rate options by our clients. Insurance benefits and rates continually change with changes in the economy as well as changes in state and federal laws governing this industry. The best plan is to take some time to consider the type of coverage you need for you or your family and write down these needs, including any specific areas of coverage that are desired and discuss these needs with your broker to see if there is a plan(s) that include these features. This due diligence will likely increase your chances of finding a plan that meets your needs, at the most reasonable rate available.

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