mh67511

I have a question about health insurance. When they determine how much your pay...do they take your lifestyle into question?

What I am saying is, does an obese smoker pay the same amount as someone who doesn't smoke, eats healthy, and exercises 4-5 times a week? Or does it really just depend on what company you have?

I really have no idea because I get coverage under my parents as long as I am a full-time student.

((I am taking a Healthy Lifestyles class right now and we are learning all about how the choices we make can cost us a lot of money in the long run. This is what prompted the question.))

AuburnGrad

If you are strictly referring to group health insurance plans through employers, I do not believe that smokers or other people who live "high-risk" lifestyles pay any more than a healthy person with no preexisting conditions.

With an individual plan (not covered by a comapny), people with preexisting conditions or lifestyles deemed "high-risk" could be denied coverage...I'm not sure if they are lucky enough to be covered if their premiums would be any higher than the average American, though.

All I do know is that I'm denied coverage for having a disorder that could lead to future health problems. Nevermind the fact that I'm not diabetic, not obese (although I will admit I need to lose some weight), my blood pressure and cholesterol are always lower than what is considered in the normal range. Yet, someone who smokes three packs a day and who may have one of the problems I just listed can be covered with health insurance because he or she is lucky enough to have group insurance through his or her employer.

SuperDeluxe

You're age AND if you smoke both factor into how much you pay

AuburnGrad

But on an employer's group plan, neither factor into how much an individual pays, do they? The age of employees may mean a rise in premiums, but one worker will not have a higher premium than another, right? Unless, of course, he or she is on a family plan, and/or until one retires. When my father retires, his health insurance premium will go up $700 a month!

I'm clueless when it comes to insurance, so I would like a definitive answer on this, too.

ceilirose

Not in all cases. When I went to work for myself I joined a single user's group plan and payed the advertised premium. My age and whether I smoked or not was not taken into consideration.

Maybe the insurance companies use those factors internally to come up with their premiums. In my case I've paid what was advertised.

pixiedude

I've got an individual catastrophic ($5,000) deductible. I believe they do surcharge people who admit they smoke, though I don't recall how much. The big price factor is age.

There was also a long questionnaire about treatment for previous illness. I didn't have any of the conditions they asked about, so it didn't affect me, but I suspect that if I had, the company would either charge me more, or add exclusionary riders saying that they would not pay for treatment of these diseases.

There's an element of popular bias to this sort of "guilty victim" risk analysis. Eg, I have more cholesterol than is considered ideal by the government (and these kinds of numbers are always a moving target). An actuary could conclude that I'm a financial risk to the company on this ground.

However, I don't drive, and rarely ride in cars, so I'm less likely than many other policy holders to have a traffic-related injury, but I've never heard of anyone arguing that non-drivers should get a break on insurance because they take fewer traffic risks.

I'm left-handed, which puts me at statistical risk for injury and early death due to a variety of causes. Today, most people in the US would not hold me culpable for this "lifestyle choice," anymore than they would for my shorter-than-average height, which has been statistically correlated with high blood pressure. But until WW2 in the US, and still in many parts of the world, left-handedness was/is considered an antisocial habit that could, and should, be broken.

I drink on average one alcoholic beverage a week, which reduces my risk of accident due to intoxication, compared to more frequent drinkers, but statistically raises my risk of cardiovascular disease compared to men who have five a week, or whatever the latest research says. So would this be an actuarial wash?

Years ago, I read that married men at all ages are healthier than single ones, but that single women were healthier at all ages than married ones. But I suspect that, for social reasons, no insurer would dare adjust prices to reward spinsterhood.

mh67511

WTF? I am left-handed...I might die earlier?

girl in a cardigan

I worked in employee benefits for an independent insurance company that sold all of the major California carriers. I specialized in small group (under 50 lives), but most of this is true for large group as well.

When your employer first applies for group coverage (or when they apply to a new carrier), the carrier looks at the applications and determines what the RAF (Risk Adjustment Factor) for your group will be. The standard is 1.0. If your group has mostly young people with no health conditions and a large population, it can go down as low as .90. If your group has an older population or a group of like 2 people, the RAF can go as high as 1.10. Once the carrier determines the RAF, then your employer will know which set of age-banded rates to use.

This is where you come in. The bands usually go under 25/29, 30-39, 40-49, 50-54, 55-59, 60-64, 65+ (primary & secondary). Depending on your age, your employer is charged one of those rates for you. Whether you are a healthy 20 year old or a 21 year old with a 2 pack a day habit, your rate would be the same for that year. Your employer determines the amount that you contribute, but most carriers require a 75% contribution by the employer for the employee's coverage. Dependent coverage is usually not covered by the employer though if you get a nice employer, it can be.

Every year the plan renews and the carrier gives out the new (higher) rates. At that time, the carrier can also change the RAF. If your group had a 1.0 for the first year and very little usage or no big expenses, the carrier may drop the RAF to .95. If you had high usage or hired a bunch of smokers, they may up the RAF to 1.05 or 1.10.

I'm not as good as individual coverage as I only did minor work for our individual desk. I'm sure this is probably more than you wanted to know about insurance, but if you have any other specific questions, please let me know. I have my own carrier preferences, but I'll try to be as impartial as possible

pixiedude

Around 7-8 years ago, I read The Left-Hander Syndrome: The Causes and Consequences of Left-Handedness, written in 1981 by Stanley Coren. He started out studying sleep disorders. Since both left-handed people and elderly people tend to have more sleep disorders than the rest of the population, he had to include some left-handed, elderly people in a control group. His difficulty finding enough to meet the requirements of his statistical protocol led him to study why the percentage of left-handers drops off with age.

He started out thinking that it was probably because older people were more likely to have been taught to prefer their right hand when they were children, or perhaps developed a right-hand preference after decades of using tools and machines designed for right-handers. But by the end of his study, he became convinced that the left-handers weren't "converting", they were dying, several years earlier than demographically similar right-handers, for a variety of reasons. The most important was accidents.

It's really worth reading, even if you take his conclusions with a grain of salt, because he describes in such detail the ways he comes up with to test the "sidedness" of people's startle responses, for instance. He wrote this book for non-scientists, after seeing his results sensationalized in the press, and decided that he had an obligation to make his methods and results clear to the public.

Since then, other researchers have disputed his claims. From the accounts I've read in the news, none of them has tried to replicate his painstaking research, but one point that has been raised against his conclusions is that it's unlikely that the insurance industry would have missed such a statistically significant marker of risk for injury and early death as Coren made left-handedness out to be.

I did a little Googling around for this reply. but I can't say I found anything terribly conclusive. Perhaps the best summary I found of current knowledge (without getting off my lazy butt and going to the library) is this The Straight Dope column from 1996:

Do Left-handers Die Young?