Switch health insurance now or later?
March 10, 2011 11:00 AM Subscribe
When would be the best time to switch health insurers - now or in 2014?
I'm in Northern California. I have an individual policy now with Blue Cross PPO. I hate Blue Cross. I want to switch to Kaiser.
Given what we definitely know right now about laws about health insurance, and what will probably happen with insurance laws between now and 2014, should I try to switch now or later? Thinking about cost of premiums, benefits, ability to make other switches later. I know nobody knows the future but if you have good reasons to believe a particular thing will happen please share.
I have minor pre-existing conditions like probably everybody does. I have had continuous coverage for years.
Asking anonymously because I don't want pre-existing conditions linked to my name.
I'm in Northern California. I have an individual policy now with Blue Cross PPO. I hate Blue Cross. I want to switch to Kaiser.
Given what we definitely know right now about laws about health insurance, and what will probably happen with insurance laws between now and 2014, should I try to switch now or later? Thinking about cost of premiums, benefits, ability to make other switches later. I know nobody knows the future but if you have good reasons to believe a particular thing will happen please share.
I have minor pre-existing conditions like probably everybody does. I have had continuous coverage for years.
Asking anonymously because I don't want pre-existing conditions linked to my name.
Kaiser requires that you go to Kaiser doctors, facilities, ERs etc. As far as I know, which is little, that probably won't change in 2014.
posted by Blazecock Pileon at 12:43 PM on March 10, 2011
posted by Blazecock Pileon at 12:43 PM on March 10, 2011
Kaiser was a big player in the health care reform, as I recall from my Ezra Klein reading. They're already big into examining outcomes and more results-based medicine. I don't think there's any compelling reason to believe it will be more or less expensive to switch later or sooner or that one or the other will be a better or worse option in three years.
That aside, if you're unhappy now I think that's the best reason to switch. Why put off something you believe will be an improvement?
posted by phearlez at 1:13 PM on March 10, 2011
That aside, if you're unhappy now I think that's the best reason to switch. Why put off something you believe will be an improvement?
posted by phearlez at 1:13 PM on March 10, 2011
If health reform is not repealed or modified between now and 2014, then the major advantage (or disadvantage, depending on your situation) of switching now rather than after 2014 is that any plan you are in as of December 31, 2013 will be "grandfathered in" and not subject to the new requirements on risk rating and benefit packages. (Your ability to switch around into different policies at will after 2014 won't be affected at all by what you do before 2014, so you should set that aside as a consideration.)
After 2014, all policies sold to individuals must meet certain minimum benefit standards (e.g., must cover prescription drugs, maternity services, hospital stays, etc.). I doubt this would affect a Kaiser policy that much, as their benefit packages tend to be pretty comprehensive, but if you are for instance a 50-year-old single man that *knows* he will never need maternity services, arguably you'd be better off buying a policy that excludes that coverage now and taking advantage of the cheaper premiums (due to the lack of a big benefit category) into 2014 and later. On the other hand, you may end up buying a policy that lacks a key benefit that you didn't realize you needed until you got sick, like prescription drug coverage. After 2014 you could just switch to a new policy that did include that coverage, but in general I'd say you should be cautious about switching into any policy with less coverage than you have now because you might be in trouble if you get sick prior to 2014. Overall, in terms of benefit package, I'd say there's a very slight advantage to switching now rather than later if you want a policy where you don't have to pay for a benefit you're positive you'll never use.
In terms of premiums and cost-sharing, it could go either way. After 2014, policies cannot be medically underwritten (that is, costs cannot vary by how healthy or sick you are) and only a limited amount of cost variation is allowed around age, smoking status, and location of residence. Notably, gender rating will not be allowed; right now, women tend to pay higher premiums when younger (18-40) and men tend to pay higher premiums when older (40-65). Again, whatever plan you are on as of December 31, 2013 will be grandfathered in, so the way your premiums and cost-sharing is calculated won't change until you switch plans after 2014. (That doesn't mean the premiums can't change, it just means they'll change them based on factors that they aren't allowed to consider for new policies written after 2014.) So, if you are a good risk now--younger, very healthy, etc.--then you could pay lower premiums if you qualify for a lower premium now and are grandfathered in on your lower rate. If you are not as good of a risk, say older (35+) or with any pre-existing condition, then you might end up better off if you switch into a policy once they can't underwrite based on medical status. Of course, here again you're going to be free (or relatively free) to switch around policies as you wish after 2014, so it's not like you couldn't switch now and switch again after 2014 if you find it's cheaper later. The only advantage here is again getting on a "cheaper" policy (maybe with lesser benefits) and riding it out as long as you can, but the advantage is pretty slight and dependent upon you being in a really good position currently to buy insurance.
All in all, there's maybe a very slight bias towards switching now, unless you have a screaming deal at your current company and you're planning on keeping it as long as humanly possible. If you're not liking your current insurance and already wanting to switch, though, there is no reason I can think of to not switch now rather than later. Plus, the difference in premiums 3 years from now if you're in a grandfathered-in plan vs. a plan subject to health reform are pretty marginal and hard to predict, while the costs of being in a sub-optimal plan now and getting ill or injured between 2011 and 2014 are pretty major. If you think Kaiser is a better policy for you now, I can't think of a good reason why you shouldn't switch now, and maybe switch again (even to another plan within Kaiser) after 2014 to take advantage of the new rules for "new" policies issued after January 1, 2014.
posted by iminurmefi at 8:57 AM on March 11, 2011
After 2014, all policies sold to individuals must meet certain minimum benefit standards (e.g., must cover prescription drugs, maternity services, hospital stays, etc.). I doubt this would affect a Kaiser policy that much, as their benefit packages tend to be pretty comprehensive, but if you are for instance a 50-year-old single man that *knows* he will never need maternity services, arguably you'd be better off buying a policy that excludes that coverage now and taking advantage of the cheaper premiums (due to the lack of a big benefit category) into 2014 and later. On the other hand, you may end up buying a policy that lacks a key benefit that you didn't realize you needed until you got sick, like prescription drug coverage. After 2014 you could just switch to a new policy that did include that coverage, but in general I'd say you should be cautious about switching into any policy with less coverage than you have now because you might be in trouble if you get sick prior to 2014. Overall, in terms of benefit package, I'd say there's a very slight advantage to switching now rather than later if you want a policy where you don't have to pay for a benefit you're positive you'll never use.
In terms of premiums and cost-sharing, it could go either way. After 2014, policies cannot be medically underwritten (that is, costs cannot vary by how healthy or sick you are) and only a limited amount of cost variation is allowed around age, smoking status, and location of residence. Notably, gender rating will not be allowed; right now, women tend to pay higher premiums when younger (18-40) and men tend to pay higher premiums when older (40-65). Again, whatever plan you are on as of December 31, 2013 will be grandfathered in, so the way your premiums and cost-sharing is calculated won't change until you switch plans after 2014. (That doesn't mean the premiums can't change, it just means they'll change them based on factors that they aren't allowed to consider for new policies written after 2014.) So, if you are a good risk now--younger, very healthy, etc.--then you could pay lower premiums if you qualify for a lower premium now and are grandfathered in on your lower rate. If you are not as good of a risk, say older (35+) or with any pre-existing condition, then you might end up better off if you switch into a policy once they can't underwrite based on medical status. Of course, here again you're going to be free (or relatively free) to switch around policies as you wish after 2014, so it's not like you couldn't switch now and switch again after 2014 if you find it's cheaper later. The only advantage here is again getting on a "cheaper" policy (maybe with lesser benefits) and riding it out as long as you can, but the advantage is pretty slight and dependent upon you being in a really good position currently to buy insurance.
All in all, there's maybe a very slight bias towards switching now, unless you have a screaming deal at your current company and you're planning on keeping it as long as humanly possible. If you're not liking your current insurance and already wanting to switch, though, there is no reason I can think of to not switch now rather than later. Plus, the difference in premiums 3 years from now if you're in a grandfathered-in plan vs. a plan subject to health reform are pretty marginal and hard to predict, while the costs of being in a sub-optimal plan now and getting ill or injured between 2011 and 2014 are pretty major. If you think Kaiser is a better policy for you now, I can't think of a good reason why you shouldn't switch now, and maybe switch again (even to another plan within Kaiser) after 2014 to take advantage of the new rules for "new" policies issued after January 1, 2014.
posted by iminurmefi at 8:57 AM on March 11, 2011
This thread is closed to new comments.
posted by COD at 12:23 PM on March 10, 2011