Individual insurance costs keep going up

By Megg Mueller on August 26th, 2010

If you pay for an individual health insurance plan and your coverage is up for renewal, don't be surprised if your rates go up. Rates for medical insurance purchased on the individual market may increase even if your health stays the same, and you don't switch to a different plan--do nothing different and you still might pay more.

The Kaiser Family Foundation (KFF) just released a poll that shows that 77 percent of respondents saw an increase in their premiums when they went to renew health insurance policies with their current insurance companies. Only about 16 percent of respondents switched plans or companies in order to save money, while the rest stayed and paid the higher rates.

Some sacrifice coverage for better premiums

Unfortunately, those who did save money most likely did so at the expense of coverage. Those surveyed reported that new plans did not have the same comprehensive coverage benefits as previous health plans. Plus, with lower premiums some consumers may have higher--sometimes prohibitively high--deductibles. So, when people "buy down" coverage, they may also start going without routine medical care.

While it's true that most Americans get health insurance coverage through employers, about 14 million people under the age of 65 buy individual insurance coverage. Insurance companies claim these rate increases are necessary to offset the rising cost of medical treatment, and unfortunately, most people aren't in a position to argue against the claims of health insurance companies or able to negotiate for lower costs.

Until 2014, when the Patient Protection and Affordable Care Act is supposed to make buying individual insurance through exchanges more affordable, and subsidies are provided to help those at perilous income levels, there's little chance these rate increases will end. If your coverage is up for renewal, you should start shopping around.

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