Blue Cross & Shield Individual Underwriting Info

RATING COUNTIES:  California is divided into different geographic regions.  Why?  The costs of health care differ by where they are delivered, e.g., people in LA pay more for the same medical procedure than folks in San Diego.  People in LA therefore pay more for their health insurance.  In California, Blue Cross has Rating Areas 1-14;  Blue Shield.has Regions 1-9.

INSURED CATEGORIES:

Blue Cross®                               Blue Shield®

  Single                                        Single

  Subscriber & Spouse              Party of Two

  Family (3/more)                         Family (3/more)

  Subscriber & 1 Child 

  Subscriber & Children

RATE INCREASES:  Why do rates go up? 

1)  A change in Age Bracket, e.g. when 30-34 becomes 35-39. 

2)  When Statewide Rate increases occur.  How often?  Every 6-18 months.  Usually from 5-12%.  What are the main reasons that cause Statewide Rate increases?  

• Escalating hospital and doctor fees
• Demand for expensive high-tech procedures
• Rising costs for pharmaceuticals (prescription drugs)
• Increased use of emergency rooms for non-emergencies
• Costs of conforming with government mandates and regulations
• HealthNet, 3/24/05:  "According to the US General Accounting Office, approximately 10 percent of the more than $700 billion in health care costs come from health insurance fraud and abuse."

Can your policy have rates increased because of excessive claims history?  Nope.  Rates increase for all identical policy types in a California Area/Region.

RATES (Premiums/Price):  In the past, individual policies were issued with Waivers or Exclusions for medical conditions.  Today, they are issued to cover all conditions, but the rate can be multiplies by a percentage:

Blue Cross®:

   Level I:  The Quoted standard rate by Agent or Company -- the rate most people obtain.

   Level I + 20:    Quoted rate +20% extra charge (If HMO, 20% is maximum/Decline...)

   Level I + 50:    Quoted rate +50% extra charge

   Level I + 75:   Quoted rate +75% extra charge

   Level I + 100:  Quoted rate +100% extra charge

   Level III:  If the Application is postponed or declined.  Next step, would be to apply for MRMIP (Major Risk Medical Insurance Program).  Pronounced "Mr. Mip", this is guaranteed health insurance for residents of California.  Applications are guaranteed to be accepted if conditions are met -- a condition like being declined coverage. However, MRMIP rates are higher, benefits lower, and there is a usually a waiting list.  A one-page Request Form to qualify for MRMIP is available -- ask us.

Blue Shield®:  For Copay, Deductible, and HMO Plans:

   Tier 1:  Quoted standard rate by Agents or Company -- the rate most people obtain.

   Tier 2:  Quoted rate +20% extra charge

   Tier 3:  Quoted rate +50% extra charge

   Tier 4:  Quoted rate +75% extra charge

   Tier 5:  Quoted rate +267% extra charge

Questions?  Tel/Fax: 1.800.994.2583 Toll Free in California

Note:  Blue Cross® of California, Blue Shield® of California, and the Cross and Shield Symbols are registered service marks of the Blue Cross and Blue Shield Association, and association of independent Blue Cross and Blue Shield Plans.

                     © Copyright 2004 Paul Shnable Insurance Services - California License #0476133