Newsletter Updates
» whatever happened to nj health insurance
Saturday, November 01, 2003 - Our colleague just received a NJ BC/BS printout of the new rates for individuals (self-employed) people buying insurance.
The absolute cheapest monthly outlay for a family seeking coverage is $592.76. And for that, they are buying a $10,000 deductible plan that pays 50% of the charges up to $30,000!
If you would like to purchase an HMO plan that has a $30 co-pay for office visits, and many restrictions on medications, doctors, procedures etc., the monthly rate is $1179.65.
For laughs, if a family would prefer the old fashioned $500. deductible that pays 80% of bills, the monthly premium is $5319.79. No joke-- it's the official printout. They do guarantee these rates until January 31, 2004, but if you get in quickly, these rates are guaranteed through December, 2004. Hurry!
Why are rates so high? In a word: Trenton. Well meaning politicians have set up an array of insurance regulations and mandates that do not exist anywhere else in the United States. Here are six examples:
- "Community rating." Every person, male or female, age 18 or 64 gets charged the same rate. The young and healthy do not value insurance enough to pay the high rates, so only the older, sicker people remain. The rates rise.
- "Guaranteed issue." Insurance companies are forced to take on everyone, regardless of risk. People thus have an incentive to wait until they get sick to get in. One can find he has an illness, buy insurance, and, after the obligatory one-year pre-existing condition waiting period, have all expenses paid. This makes the rates rise.
- Mandated $300. per year allowance per person for "preventive care." This adds $500 in insurance costs per person when factoring in administrative costs.
- Government mandating coverage for many things--eg. in-vitro fertilization--it jacks up the price of insurance for all.
- Making high deductible insurance illegal. No one is allowed to purchase more affordable high deductible insurance unless he has a medical savings account.
- Government regulations are different for individuals, small businesses, large businesses and HMO's. This is very confusing and few understand it enough to fix it.