Major Medical Health Insurance Rates

Preferred medical insurance plans are based on the health of families and individuals that apply for medical coverage. A “preferred” rating is often given to applicants that don’t have any existing conditions and meet underwriting guidelines of the health insurer. Of course, rates are typically lower when you earn this type of rating.

Who Qualifies For A Preferred Medical Plan?

Although each insurer has a different set of guidelines, there are some common factors that each company uses. The BMI (Body Mass Index) is commonly utilized to help determine a rating. For example, if you are a 5’10” male, you will probably have to weigh less than 200 pounds to qualify for the best rate. A 5’4” female will probably have to weigh less than 165 pounds. Different carriers, however, will have slight variations to these numbers.

Also, if an applicant weighs more than these suggested weight limits, it does not mean their application for coverage will be declined. They could be assigned a “standard” rating, which may slightly, but not significantly raise the rate. But a combination of major weight problems along with multiple conditions could cause an underwriter to deny coverage.

How Much Lower Are Preferred Rates?

Each company determines their own underwriting criteria and guidelines, but generally, a preferred rate is about 10%-20% less than a “standard” rate in health insurance. Typically, the insured must be taking no medication (there are exceptions) and have no ongoing conditions (again…there may be exceptions) to qualify for the best rate.

Many companies offer “modified” rate classes that will often provide rates 25%-100% above the normal rate. While this isn’t an ideal rate, it does have its place. Sometimes, there are only a few different rate classes. However, a few carriers will have many rate classes…even as much as 10 different ones!

For example, if an applicant for medical coverage takes medications for high blood pressure and high cholesterol, and is also 35 pounds overweight, it is possible the policy will be approved. However, the issued rate may be 75% higher than the original quoted rate. This “modified” increase does not impact the benefits of the policy, just the cost.

Other common conditions that can cause the original quoted premium to increase are restless leg syndrome, gerd, irritable bowel syndrome, asthma, seizures, arthritis, headaches, and sleep apnea. Keep in mind that this is not an all-inclusive list and the severity of the condition will affect the rate.

Are Some Medical Insurance Plans Better Than Others?

Yes. The most expensive policies will often have low or no major medical deductible. For example, often HMO plans will contain a small daily maximum expense instead of a larger deductible such as $2,500. Many PPO plans offer low deductible options (such as $250 or $500), which can raise the rate as much as 25%-40%.

Depending on the carrier and state you reside, you may see a “Cadillac” plan that features extra benefits such as brand-name prescription benefits with no deductible to meet, enhanced mental illness coverage and first-dollar coverage on hospital claims with no coinsurance or deductible. These plans are very expensive, so unless your employer is paying the cost, it may be more cost-effective to purchase a policy that costs less.

Other forms of insurance, such as dental, life and vehicle plans, will also have preferred classifications. But health care is clearly the most intriguing, since in many instances you can change your behavior and improve your own class. When you request to view rates at the top of the page, you’ll be able to determine your own personal rating.