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November 16, 2005 - by Margaret Price
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Seek insurance sales across states
Paul Zane
Pilzer offers living proof that even economists can have trouble finding
good health insurance.
In 1999, he lost his group coverage - just when
his wife was pregnant and needed maternity medical care. He briefly
looked for coverage in New York but ultimately got it in Utah, where the
ex-New Yorker now lives.
His odyssey - and the differences he found in
costs and accessibility of individual health plans in various states -
prompted him to form a company to address the problem, initially for the
self-employed.
He's since authored the book, "The New Health
Insurance Solution How to Get Cheaper, Better Coverage Without a
Traditional Employer Plan."
And now, he's among those championing a
Congressional bill, the Health Care Choice Act, which would allow
individual health insurance to be sold across state lines.
Pilzer believes it could be a boon for New
Yorkers. A broader market could "give New Yorkers access to individual
health plans that are between 25% and 50% of the costs they now pay, and
get them better coverage," he holds.
And perhaps more people on employment-based
plans - the majority of Americans - might prefer individual coverage.
But if the bill passes, opponents worry that
older and sicker people could be among those short-changed.
In essence, the Health Care Choice Act of 2005
- introduced by Rep. John Shadegg (R-Ariz.) in the House and Sen. Jim
DeMint (R-S. Car.) in the Senate - would let insurers licensed in one
state sell an individual health policy approved and sold in that primary
state to people in any state.
Today, individuals can purchase only those
health plans approved in their state from insurers licensed in that
state.
And in New York, these plans are comparatively
pricey, data show. According to the trade group, America's Health
Insurance Plans, annual premiums of individual plans for single coverage
in 2004 averaged $3,743 in New York, and an even higher $6,048 in New
Jersey - well above the $2,268 national average.
In New York, premiums on family coverage
averaged $9,696 last year, which was more than double the national
average.
Would individuals like being able to buy
insurance out-of-state? The Council for Affordable Health Insurance
believes so. In its 2004 survey, 72% of those polled support allowing
people in one state to purchase health insurance out-of-state, if the
insurance is state-regulated and approved. And 82% said they would
likely purchase a policy across state lines if they needed more
affordable coverage.
But the proposal, which has passed the House
Energy and Commerce Committee, has opponents worried about consumer
protections.
"The New York State Insurance Department is
concerned that the federal 2005 Health Care Choice Act could undo the
gains New York has made in protecting consumers," a
spokesman for the
department said. "If the measure were enacted in its current form" New
Yorkers buying policies from out-of-state insurers might not get "the
minimum level of benefits provided under (New York) state law."
Moreover, the proposal "would allow
out-of-state insurers to circumvent New York's community rating and open
enrollment laws, which provide broad access to coverage for all New
Yorkers," he said.
"The two things that concern us the most," said
Kathleen Stoll, health policy director at Families USA: "An insurer
might become insolvent, sticking the policyholder with his own medical
costs. Or, older and sicker people wouldn't get this insurance. At best,
they'd pay very high prices for inadequate coverage - which laws in some
states now protect against."
You can track the fate of the Shadegg bill by
going to the Web site
http://thomas.loc.gov. After reaching the page, plug in the bill
identification, either HR2355 for the House version or S1015 for the
Senate bill. The bills can also be tracked in the issues section of
www.cahi.org.
A 'right'
plan
Whatever the changes in Washington, people seeking individual health
coverage have things they can do now to save money and/or find the right
plan:
Suggestions from author Paul Zane Pilzer:
-
When shopping for a plan, use an
agent who represents a variety of individual policy carriers in the
state.
-
Before selecting a plan, find out
which insurance plans your favorite doctors accept.
-
When buying coverage, negotiate with
the insurer on any premium hikes it wants to charge you based on
your pre-existing medical conditions.
- If
you're employed
and your company charges you to include family members on your
employer-sponsored plan, consider moving healthy family members to
an individual insurance plan, which could save you a lot of money.
- If
you're self-employed, remember that
you get a 100% tax deduction for your health insurance premium up to
the amount of your self-employed income.
- If
you have an employer, ask if he is
willing to reimburse you tax-free for the premium on your individual
family policy if you don't participate in your company's plan.
Advice
from Matt Coffin, president and founder of LowerMyBills.com:
-
Check to see
if you qualify for state or federal insurance programs if you are
uninsured, disabled or have a low income.
Log on to Web
sites
such as
www.LowerMyBills.com to review various plans and coverage levels
on the Internet.
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