Health Insurance by Ron J. Bommarito

A Health Insurance Specialist presents some clarity

As many of you are personally and painfully aware, health insurance rates are climbing and coverage is dropping. Employees are asked to shoulder an increasingly larger share of the cost, while employers are still paying the lion's share. Medicare does not cover prescriptions, yet seniors are pushing for legislation for the taxpayer to start paying for them. The tug and pull of these problems is not easily solved.

Although many of the issues that surround this topic are large, national ones that are beyond our ability to directly influence, I hope to bring some clarity to the subject. Health Insurance Specialist (HIS) is a licensed health insurance sales agency serving Southeastern Michigan since 1990. Ronald J. Bommarito is the agency principle. He is available by phone at 1-800-982-8282 or on the web at www.healthspecialist.com. HIS is involved in the struggle to provide the best coverage at the least cost without compromising quality. This daily involvement with individuals and employers puts HIS in the forefront of these issues. As a result, we offer timely, accurate and honest advice to mitigate these burdensome increases of the past few years. This is the first in of a series of articles designed to educate and inform.

11-18-02

Health Insurance Rates rise ----again!
by Ronald J. Bommarito

Everyone is concerned about rising health insurance premiums. Yet, despite media coverage and debate, most people don't understand how insurance companies determine premium rates or why rates increase. You deserve to know more about both issues. Here's a simplified look at what your premium dollar pays for and factors that influence rate changes. We hope this helps you understand important parts of health insurance more clearly. This discussion is from the employer-sponsored point of view. Individual plans have similar issues.

How Insurance companies Determine Rates

Determining a group's initial premium rate involves many factors. Here are the most significant:

Group profile---Subject to state laws, the characteristics of your employees determine a big part of your premium. For example, different combinations of men, women, ages, and types of coverage present different levels of potential health care expenses. As the
characteristics of your group change (on average), your premium rates may also change.

Health status---When permitted by state regulations, we look at the overall health of people covered under your health plan. In terms of rate increases, we may adjust your premiums to cover expected future claim costs.

Geographic location---Just as home prices differ depending upon location, so do health care costs. The availability of advanced technology varies greatly. Premiums in certain areas may reflect the higher cost of more people using more state-of-the-art treatments and services.

Next month our topic will be "Why Rates Change".

Ronald J. Bommarito is the agency principle. He is available by phone at 1-800-982-8282 or on the web at www.healthspecialist.com.

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