New health care law changing individuals’ coverage, premiums

by Sherry Hamilton - Posted on Jul 16, 2014 - 01:54 PM

The Affordable Care Act is finally in full swing, and insurers and individuals are now better able to see the effect it has on insurance coverage.

But people still have plenty of questions about the law, and account executive Dayton Wiese with Virginia Farm Bureau’s insurance company, Experient, visited the Gazette-Journal recently to discuss some of the issues he is asked about most frequently.

As background, Wiese explained some basics about the effect the health care law has had on coverage.

In the past, said Wiese, if someone wanted to buy medical insurance, he or she would have to provide extensive medical history before the insurance company determined the risk and the rate.

There were about six pages of questions about health, said Wiese, including height, weight, present medications, recent surgeries, mental health and diagnoses, and other items in a person’s medical history. In the individual market, companies could decline an application based on the information provided.

Group insurance was different. An insurer couldn’t turn down an employee, but the group as a whole could be charged more or assessed a surcharge based on the health of its employees. “If you were really healthy, your rate was low because of the low risk,” said Weise. “But if you were unhealthy or had a condition, the rates were higher because of the expectation you would use the policy. There were definitely winners and losers based on their medical history.”

The insurer could also charge widely different premiums based on the age of a company’s employees. There was a premium differential of 10 to one, said Wiese, meaning that the most expensive insurance in a group plan could cost as much as 10 times more than the least expensive insurance. As an example, he said, a person who was 64 years old might pay 10 times more than a person who was 21.

Now, said Wiese, none of that applies. Insurance companies can no longer ask medical questions or base acceptance or rates on medical criteria.