Until this point in time, your health insurance rates have routinely been creeping up and up. The reasons? Our own neglect of our health and the rising costs of medical services, etc. However, having said that, there are some changes on the horizon which are slated to come into effect in June 2010.
One of the changes well, it is sort of a change, but not really is that the old Medigap plans A-G will end and the new plans A-G will become effective the 1st of June. The reason that we say it’s a change, but not really a change, is that the plans will remain the same in what they offer. There will be no changes in what they offer.
The only changes will be the people in the old Medigap plans will be grandfathered to stay in their old plans which means they will become a closed risk pool. This typically tends to drive the prices of health insurance premiums up. Those people who will be in the “new” plans A-G will also find themselves in a closed risk pool. Two things may be the result of that.
Either the health insurance premiums will go up in both risk pools or, because of the expected stiff competition this situation will cause, health insurance premiums will become competitive. That would be a bonus for many Americans who are currently paying some really high health insurance premiums.
Whether or not the two closed pools will eventually see another rate increase, or gradual increase, is a good question. In the meantime if we do see rates creeping up, it will likely be for the same reasons we are seeing now. Those reasons include the fact that we don’t take good care of ourselves. We drink, take drugs to excess, smoke, don’t exercise, don’t eat properly and, as a nation, we are aging. All those factors increase our health insurance rates in the blink of an eye.
Without a doubt, there will still be medical inflation and medical errors in both risk pools, the old and the new. So, even if the health insurance premiums initially drop in price and more people come on board, this isn’t to say these same factors won’t remain in play long-term.
