Medical inflation averages about 6% a year and prescription drug inflation has been closer to 10%. This is less shocking now as people are more or less used to the increases but it was a shock during the first few years that this all started happening. The increases applied most aggressively to the individual family health insurance plan more so than to Small Group plans but both were affected. Medicare supplement plans also underwent increases annually but at a smaller clip since Medicare was absorbing 80% of the underlying medical costs. The increases occurred at least once per year, sometimes twice depending on the carrier and the year and sometimes they had double digit increases.
In the future with the newly enacted Health Care Reform Law H.R. 3590 we can expect that health care premiums will continue to rise. The percentage that premiums will rise annually remains to be seen. A California company initially was going to raise rates up to 39%, but has since rescinded that rate increase. Hopefully we will see a slowing of rate increases in the future, however I don’t have any factual information that that is going to happen. We have now started to see high single-digit health insurance rate increases (around 9%-12%) on average. Keep in mind that a given area, plan, or age band may increase more or less than the average depending on the claims to that risk group during the preceding period of time. There have been cases where a given age-band, area, and plan stayed the same or actually decreased as claims experience was low for that group. It's important to understand what drives the costs of Nevada health insurance. The increases typically happen at a certain time of the year. For example, Anthem Blue Cross usually has their increase for Individual health insurance March 1st, and Small Group increase the following May 1st. Health Net and PacifiCare are less periodic in their increases although they tend to happen later in the year. Sierra Health and Life, and Health Plan of Nevada tend to raise their premiums in September/October, and Aetna raises them usually in July. Ultimately, it's important to go with a strong carrier for long-term rate stability. It rarely makes sense to switch carriers for a cheaper rate only to find an increase later on (sometimes dependant on the carrier and policy we can get your rate locked for a year). If your health changes, you may be unable to switch plans and your deductible/max out of pocket resets with each move to another carrier.
On average, the richer a Nevada Health Insurance company plan's benefits, the more the rate increases will impact it over time. We have seen most no-deductible PPO plans disappear from the Las Vegas Health Insurance market. This has forced a trend toward high deductible PPO plans such as the HSA compatible plans. These plans absorb less of the medical inflation since they are high deductible but more importantly, there is a built-in financial incentive for a person to take better care of themselves and manage their own healthcare more wisely. Due to these two contributing factors, they should have a slower rate of health insurance premium increase. There is somewhat of a disconnect between the very rich copay health plans and the underlying medical cost it is obscuring. Of course, this finds its way to the member in the form of higher rate increases.
Your choice of Nevada health insurance carrier can have a big impact on future rate increases. The carrier's rates are directly affected by their ability to effectively contract with providers, manage their businesses well, and design plans correctly. It's not uncommon for a carrier to launch a new plan at a very low rate that is comparable to other carrier's similar options. Without fail, the plan rate skyrockets and/or the benefits change drastically. Some plans are discontinued altogether. Be careful to fall for such bait-n-switch marketing. Long term (health insurance is a long term consideration especially at the individual/family level); the better run carrier will be more stable. The problem with going to a quick fix, lower priced plan like this is that you may be unable to switch plans if the rates go up significantly or benefits are change depending on your health. An insurance term called "Adverse Selection" then kicks in. Healthy people, who are able to change plans, leave the poorly designed plan which leaves an ever-increasing risky pool of people (who are unable to move). This just drives the rate increase spiral further till the plan is in serious trouble.
You can get a good Nevada health insurance carrier comparison which spells out our view on which companies to concentrate on. For the comparison please contact us.
Depending on the market segment (Individual/Family, Small Group, Medicare Supplement), the carriers may offer rate guarantees for new enrollees. For individual or family Nevada health insurance, 6 month rate guarantees for new enrollees can be found on the market. This means that if you are effective 2/1 and there is a rate increase, 3/1, the increase may not hit your plan till 8/1 (six months from your original effective date). Small Group health plans can offer new groups 12 month rate increases depending on the carrier, special promotions, and the size of the group. Medicare supplement plans typically do not have rate guarantees. If you are effective 2/1 and the increase is 3/1, your rate will likely go up 3/1 with the rest of the members. Keep in mind, these rate increases are separate from age specific increases from moving into a new age band.
When rate increases do occur, run a quick quote from www.Las-Vegas-Health-Insurance-Expert.com to see if there are better (or newer) options for you, your family, or your company. Plans and options are constantly changing and we can help you compare your current health insurance coverage versus what the market now has to offer.
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