Health Insurance Underwriter

slowly in order to protect against extreme rate shock to some populations, especially younger individuals. Additionally, it is extremely important that wide adjustments be allowed for non-health measures. At a minimum, variations need to be allowed for applicant age of at least five to one (meaning that the rate of the oldest applicant may be no more than five times the rate of the youngest applicant). In addition to age, variations in premium rates should be allowed for other factors such as wellness plan participation, smoking status, industry, family composition and geography.

Finally, the federal government should also make improvements to existing law to make health insurance coverage more portable for people who leave their jobs and employer-based coverage and need to buy coverage in the individual market. Examples of such individuals include early retirees or people who are starting a small business or freelancing, perhaps because they are having trouble finding other work with employer-based coverage. HIPAA attempts to provide individuals who are leaving group health insurance coverage with portability protections to make it easier for them to purchase coverage in the individual market. Unfortunately, the protections are confusing and many consumers unintentionally invalidate their HIPAA guaranteed-issue rights without realizing it, and then risk being denied coverage when they apply for individual coverage.

Under current law, individuals who are leaving group coverage must exhaust either COBRA continuation coverage or any state-mandated continuation-of-coverage option if COBRA is not applicable, before they have any group-to-individual portability rights under HIPAA. Once the consumer exhausts these options, if available, then he or she can purchase certain types of individual coverage on a guaranteed-issue basis, provided that there is no more than a 63- day break in coverage.

Most people who leave group coverage are unaware of all of the stipulations required to receive federal portability-of-

coverage protections. Faced with high COBRA or state-continuation premiums, many individuals decline such coverage initially or after a few months. Then, depending on their health status or a family member’s, they may experience extreme difficulty obtaining individual-market coverage. To solve this problem, the HIPAA requirement to exhaust state continuation coverage or COBRA before federal guarantees are available should be rescinded, and individuals leaving group coverage should be able to exercise their federal group-to-individual portability rights immediately, provided that there is no more than a 63-day break in coverage.

Subsidies

Some changes need to be made in our tax system simply to provide equity for individual market consumers with their counterparts in employer-sponsored plans. For example, removing the 7.5% of adjusted gross limit of medical expenses on tax filers’ itemized deduction Schedule A form and allowing the deduction of individual insurance premiums as a medical expense in itemized deductions would help many people who are part-time workers or who work for employers that don’t offer health insurance coverage. And to put self-employed individuals who are sole proprietors or who have Sub-S corporations on a level playing field with businesses organized as “C” corporations, their current deduction from gross income should be changed to a full deductible business expense on Schedule C.