Preferred medical insurance plans are based on the health of families and individuals that apply for coverage. A “preferred” rating is often given to applicants that don’t have any existing conditions and meet underwriting guidelines of the insurer. Of course, rates are typically lower when you earn this type of classification.
Many companies have a “Super Preferred” category which represents their lowest available premiums. However, you can still negotiate very affordable premiums if you are not currently being treated for a serious illness or injury. And if you were treated in the past for these things, we’ll help you compare the most suitable plans.
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 classification. A 5’4” female will probably have to weigh less than 165 pounds.
Different carriers, however, will have slight variations to these numbers. A few selected companies may vary from these examples by 15 pounds. And sometimes (mostly on “temporary” policies), you are not asked to disclose your height and weight!
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 amount you pay. But a combination of major weight problems along with multiple conditions could cause an underwriter to deny coverage or increase the premium. Occasionally, a different plan may be offered, which may contain some limitations.
How Much Lower Are Preferred Rates?
Each company determines their own underwriting criteria and guidelines, but generally, a preferred classification is about 10%-20% less than a “standard” 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. It’s possible that a major condition that occurred more than 10 years ago, may not impact the consumer’s premium. The big variable is the wording of the questions on the application.
Many companies offer “modified” classes that will often provide charges 25%-100% above normal. While this isn’t an ideal rate, it does have its place. Sometimes, there are only a few different classifications. However, a few carriers will have many rate classes…even as many as 10 different ones! Usually, Blue Cross has many tiers while UnitedHealthcare has approximately three.
For example, if an applicant for 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 estimate. This “modified” increase does not impact the benefits of the policy, just the cost. If there are other family members applying for coverage, that could be viewed as more favorable and receive a much more attractive offer.
Other common conditions that can cause the original quoted premium to increase are restless leg syndrome, irritable bowel syndrome, gout, 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 cost of the policy. On most underwritten plans, insulin-dependent diabetics will be declined so perhaps we can suggest other alternatives.
But everything changes in 2014 when all policies will become guaranteed approved and all underwriting (OK, most of it) will end. Until that time, there are still many attractive policies that are very budget-oriented.
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%. If you are in reasonably good health, a low deductible is typically not advisable. An HSA may be a better policy option. Other low cost plan information can be found here.
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. A higher deductible could drastically cut your health care expenses.
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 and compare offers from different companies.