Rated Health Insurance

[Bond007]

I was just thinking today about "rated" health insurance whereby individuals who don't make healthy lifestyle choices would pay more for their health insurance than those who do. You see, one of my duties this coming year to is get a handle on my company's cost base and for us our single largest variable cost is health insurance benefits. I know it'd be like an act of God to get something like this through Congress, so this is mostly a fantasy on my part.

What really came to me was the fact that other types of insurance "rate" you based on your lifestyle choices or past history. Auto insurance is more expensive based on the car you choose to own and your driving record. Life insurance is more expensive for an admitted smoker. Not to mention, you can be denied for either if you don't meet with the company's standards that you want to deal with and be forced into paying high-risk insurance.

Speaking of Life Insurance, those companies already have a set way to determine your risk. Why can't their formula be applied to the health insurance industry? Granted, life insurance is also more expensive if you have congenital problems. Don't get me wrong, as I don't believe that people who are genetically pre-disposed to certain conditions should be penalized. But there are still quite a number of choices that we make every day that will be a contributing factor in how healthy we are tomorrow. There are also maladies that are directly related to the choices we made in the past.

I can see a major benefit to this type of proposal, such as people just might be more aware of their health if they're being forced to pay more for the same medical insurance as a healthy individual. Perhaps, they'd make better choices for themselves and their children. Maybe this is cruel to say, but hitting people in the ole pocketbook seems to be a great way to motivate quite a number of them.

I understand many people think this is a radical viewpoint, most of them that I've come across are typically the more unhealthy ones in our society. I expect to get slammed by some here. But, I'm sick and tired of working my ass off in the gym to improve my health and quality of life AND my insurance premiums continue to go up year after year and/or my benefits dwindle because of the cost impact to my family business. Also, I do understand that there's more to our rising health care costs than sheer unhealthy living. Medical malpractice lawsuits and the resulting skyrocketing malpractice insurance premiums that professionals have to pay have a considerable contribution to our health care system.

I'm curious what y'all think. Now, go ahead and blast away!

[gregl515]

Insurance companies take the premiums paid and invest in the stock market to offset the money the pay out in claims. Malpractice companies tend to write under more favorable terms when the market is good to get money to invest. That is a major reasons the malpractice rates go up when the market is bad. A friend of mine represents doctors in malpractice actions and he says they see the same doctors over and over on claims.

[gregl515]

In terms of rating health insurance, I worked for a small business that couldn't get insurance due to a health condition of one of our workers so in a sense insurance companies due rate health insurance.

[Ami]

Individual health insurance policies do rate people for unhealthy choices such as smoking, and for past or present health problems. Blood tests indicate nicotine (which is amusing when the application indicates the individual does not use tobacco products) and high cholesterol, which can be indicative of poor eating choices. It would be hard to otherwise monitor what people are eating, drinking, etc without being too intrusive. Individual health insurance policies may also take credit ratings and personal references into consideration, although they rarely do.

Group insurance rates are a completely different animal, so to speak, and the good health choices of some members in the group may offset the huge claims paid for another. As a business, it's unlikely you could hire a group of people that collectively stayed healthy, so the only way to lower those costs would be to pay individual policies on each employee. That's not very practical for large organizations, since it could be very laborious to track and pay all those policies.

[gregl515]

I was talking to a woman today whose father died of pancreatic cancer. He had no risk factors. He didn't smoke or drink. He was a marathon runner. My wife had no risk factors for breast cancer. When she commented on this to her surgeon, she said that about thirty percent of cancers have nothing to do with risk factors. I went to a funeral the other week for a guy who appeared healthy and died of a stroke at 42. I am preparing a power of attorney for a fellow who has brain cancer at 37. Life is a lottery. Although we certainly can do things to put odds in our favor, we have no guarantees.

[gardener]

My daughter-in-law is a physician, OB/GYN. Her income has stayed fairly flat for a decade, but her malpractice insurance just leaped from $100,000 p. a. to $150,000 p.a. As many doctors in her specialty in NJ and PA have done, she may stop delivering babies.

This increase in premiums isn't entirely attributable to any increase in the incidence of medical malpractice. Some of these insurance companies made some very bad investments. Corrupt corporsations like Enron and Global Crossing hurt far more than their stockholders.