Private health insurance varies from state to state
17 03 08 - 12:38
Dow Jones Newswires
NEW YORK -- About 18 months ago, Shelley MacMahon, 53, and her husband Tom, 61, moved to New Mexico from New York. The attraction: being closer to family and year-round sunshine. But what started out as an adventure soon turned into a nightmare as Tom, who has high blood pressure and high cholesterol, struggled to find health insurance.
"We had no idea how hard it would be to find coverage," Shelley MacMahon said.
When contemplating moving to a different state, people generally consider how much it will cost to buy or rent a home and cover daily expenses. But if you need to buy private health insurance, you also should factor in medical expenses. It's an issue for Americans taking early retirement who need to buy coverage until they are eligible for Medicare, and for the self-employed like Tom MacMahon, who aren't covered under employer plans.
According to the U.S. Census Bureau, 47 million Americans were uninsured last year.
"If you get sick it can wipe you out financially," said Gary Claxton, a vice president at the Kaiser Family Foundation, a nonprofit focused on health-care issues.
According to a study by America's Health Insurance Plans, the average monthly premium nationwide was $189 for single coverage and $369 for a family in 2004, the latest year for which comprehensive data are available. In any one year, about 17 million Americans are covered by private health insurance.
Premiums vary widely by state. For instance, the average monthly premium for single policies ranged from $157 in California to $504 in New Jersey. Differences in the cost of providing health care services play a role, as do demographics. In the majority of states, insurers can factor in your age: even if you are healthy, expect to pay more as you age. For instance, in states that allow rating by age, monthly premiums for single policies ranged from $98 for a person between the ages of 18 and 24 to $349 a month for someone between 60 and 64, according to the AHIP study. You can get an idea of how much health insurance costs in your state at www.ehealthinsurance.com.
The MacMahons' move to New Mexico appeared to make sound financial sense. It's generally cheaper to buy a house in New Mexico than in New York. And the cost of living is lower. Plus, the average monthly premium for single policies, at $165, is among the lowest in the U.S. New York's average is $312, the third highest after Massachusetts and New Jersey.
However, in New York, insurers are required to charge all consumers the same or very similar premiums without regard to such factors as age, gender or health status. In New Mexico, on the other hand, insurers can factor these differences into higher or lower premiums, make permanent exclusions for pre-existing conditions or even deny coverage.
"If you have health problems, you shouldn't assume that you can get insurance," Claxton said.
Only a few states have "guaranteed issue," a requirement that all insurers sell all polices to all-comers, regardless of their health. The states where you can't be denied coverage are New York, New Jersey, Massachusetts, Maine and Vermont. Some other states apply more limited guaranteed-issue rights. For more information, consumer guides are available at www.Âhealthinsuranceinfo.net.