- 1,896
I haven't read the article yet, but will.
Just remember the 50% rate up cannot cause the policies to be outside the 3:1 community rating bands. So it won't be a "true" 50% surcharge.
Income and Insurance Verification - Delayed Till 2015.
- Thread starter AllenChicago
- Start date
I haven't read the article yet, but will.
Just remember the 50% rate up cannot cause the policies to be outside the 3:1 community rating bands. So it won't be a "true" 50% surcharge.
I don't think you are correct about the 3 to1 rating bands on at least IFP. The base rates are based on the 3 to 1 bands
- 1,896
I heard that final rates had to fall within the 3:1 bands. 3rd-hand knowledge, so it may not be correct. But apparently it's what BCBS in IL is basing their rates on.
I believe some states and some carriers are allowed to not charge extra for smokers, and/or are building in a flat rate factoring in smokers amongst the population.
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Premiums, choice and consumer experience: How Obama’s health law is faring on 3 key questions - The Washington Post
“For most people, it’s going to be a financial decision,” Gilchrist said.
According to the online Kaiser Family Foundation’s health reform subsidy calculator, Gilchrist would be eligible for a tax credit of nearly $2000 on a standard “silver” policy that costs $3,000, leaving him with $1,000 to pay.
But he can also take that $2,000 tax credit and use it to buy a cheaper policy called a “bronze” plan, leaving him with only about $500 to pay annually. The bronze plan meets the new requirement that virtually all people in the United States have health insurance. But if you get seriously sick or injured you’ll wind up paying more out of your own pocket.
Still, the premium would come to $42 a month for Gilchrist. “The bronze plan would be lower than my car insurance,” he said.
But wait.
If Gilchrist were a smoker, which he is not, the law would allow insurers to tack on a penalty of up to 50 percent of the premium.
With time, the decisions of millions of individual consumers will reveal a true bottom line.
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Premiums, choice and consumer experience: How Obama’s health law is faring on 3 key questions - The Washington Post
“For most people, it’s going to be a financial decision,” Gilchrist said.
According to the online Kaiser Family Foundation’s health reform subsidy calculator, Gilchrist would be eligible for a tax credit of nearly $2000 on a standard “silver” policy that costs $3,000, leaving him with $1,000 to pay.
But he can also take that $2,000 tax credit and use it to buy a cheaper policy called a “bronze” plan, leaving him with only about $500 to pay annually. The bronze plan meets the new requirement that virtually all people in the United States have health insurance. But if you get seriously sick or injured you’ll wind up paying more out of your own pocket.
Still, the premium would come to $42 a month for Gilchrist. “The bronze plan would be lower than my car insurance,” he said.
But wait.
If Gilchrist were a smoker, which he is not, the law would allow insurers to tack on a penalty of up to 50 percent of the premium.
With time, the decisions of millions of individual consumers will reveal a true bottom line.
I heard as well that the smoker rate (50%) WOULD BE "FLUID" meaning that it would not be a true 50% due to the 3-1 factor
You are correct. This was causing a problem with rating, because the smoker surcharge can vary according to age. So, for instance, an insurer could charge a 50% rate-up for an older smoker and 25% rate-up for a younger smoker if they wanted to. This caused a problem with the 3:1 age banding, because in this example the older smoker would be charged more than 3x's that of a younger smoker. HHS issued a final ruling on this, and for the life of me I can't find it! But (if I remember correctly), they said that an older smoker's rates at a 50% tobacco surcharge cannot be more than 3x's higher than a younger smoker's rates at a 50% tobacco surcharge, but insurers could vary the smoker surcharge by age within those limits. Anyone who finds clarification or correction, please post it here!
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EDIT - I had it backwards. They can vary the tobacco surcharge within age bands (up to 50%), but it cannot make it exceed the 3:1 corridor. This is terrible for insurers, because it's older smokers that cause more claims, if they have smoked for a long time. I haven't found the regulation itself, but from the Colorado state website comes this:
For any age group the tobacco use rate may not exceed the non-tobacco use rate by more than 1.15:1. Smokers may not be rated in total more than 3 times the total rate for a younger adult smoker.One way to accomplish this is if an issuer imposes a 1.15 to 1 tobacco rating factor on a 21-year -old smoker, the issuer should use the same 1.15 tobacco rating factor for the 65-year-old smoker. If an issuer implements the tobacco and age rating factor with the result that an older smoker is rated up more than 3 times of that of a younger smoker, the submission of the issuer will be rejected by the system.
http://cdn.colorado.gov/cs/Satellit...goBlobs&blobwhere=1251854776351&ssbinary=true
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- 948
It's just such a mess . . . .
Yes 3:1 only applies to LIKE individuals, so for instance non-smoker to non-smoker or smoker to smoker. However, there was some guidance issued by HHS (and I can't put my finger on it), that clarified what would happen if a person in a younger age band got a low smoker surcharge (say 15%), yet a person in an older age band got a higher surcharge (say the full 50%). That would make the smoker-to-smoker rate comparison be more than 3x's as high for the older person than for the younger. HHS issued a regulation on that, and I think Timsip is correct that their decision was that it still must stay within 3:1. I just can't prove it. Can't find it.
- 4,716
I love it!
My value just keeps going up!
I'm ready to dance....how many days till 10-01?
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