In most U.S. states, including CT, if you apply for a health insurance policy on your own (not through an employer), the insurance company makes you fill out a form about your medical history. If they determine you have now or previously have had any illness or health condition that is likely to cost them money in the future (like a heart condition or prior cancer), they either will not give you insurance, or charge you a very high rate, or else exclude anything related to that expensive condition. This is what is the case in CT, and is WHAT HAPPENS IN THE ABSENCE OF community rating. In the absence of community rating, if you happen to get sick at the wrong time: say before you lose or leave your job or retire early, or before your insurance company stops selling policies in your state, or you move from another state, it makes life very expensive for you, and you may even go broke.

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This is not the case in states that have what is called Community Rating Laws. In the early 1990s, a number of states, including NY, NJ, MA, and VT passed reforms requiring Community Rating or Modified Community Rating. What this means, in the case of "Community Rating" is that, provided you have had health insurance from any source during a specified prior period (typically the 1 year prior to applying for new insurance), when you apply for any new insurance, the insurance company has to give you insurance, cannot exclude pre-existing conditions, and has to charge you exactly the same as what they charge any other person living in the same area of the state, regardless of your health. In the case of "Modified Community Rating", it is the same deal, except the rate charged is allowed to be higher for older people, but still not based on health. (Some may prefer "Modified Community Rating", as it gives younger people a reasonable break, and they often have accumulated less money, anyway.)

If you think about it, the reason for the requirement in Community Rated states of having insurance for a year prior to applying new insurance (without which the insurance company is allowed to charge you whatever they want or exclude pre-existing conditions), is so that people don't abuse the system and just get insurance once they get sick. WIth that requirement, people trying to freeload by buying insurance only when they got sick would have an excluded pre-existing condition or much higher insurance rates, and could lose huge amounts of money.

But, under community rating, or modified community rating, as in CTs neighboring states of NY, NJ, MA, and VT, for people who do not try to abuse the system, you get a pretty reasonable insurance rate, which can't get higher if you get sick, and can't leave you with humongous medical bills when you are uncovered, as long as you pay the standard rate that everyone pays, and maintain that coverage continuously.

THE RATES EVERYONE PAYS IN COMMUNITY RATED STATES THAT NEIGHBOR CT:

STATE	CHECK RATES HERE	HEALTH INSURANCE RULES AND GENERAL INFO HERE
NY	NY Rates	NY Rules
NJ	NJ Rates	NJ Rules
MA	MA Rates (Connector Programs under new Mass Reform): Here are some test zip codes: 01201: Pittsfield, MA 01104: Springfield, MA 02114: Boston, MA	(Modified Community Rating Still Maintained under 2007 reform)
VT	VT Rates	VT Rules

WHAT HAPPENS TO YOUR RATES AND COVERAGE IN CONNECTICUT IF YOU HAVE A MEDICAL CONDITION?

Of course, if you lose your insurance at your job, or retire early, or move into the state, or your current insurance company decides to stop selling insurance in the state, and you have a substantial medical condition, you won't get insurance from a private insurance company, unless it excludes your expensive condition, or they charge you a huge premium. So you're stuck regarding an individual policy.

There's another way you might get stuck, which you might not expect. Say you do develop a medical condition: a heart problem, cancer, etc., and at the time you currently have private insurance. You might feel secure: you have a policy, you keep paying the premium, and it is true that your company can not cancel your policy unless they decide to cancel all policies in the state. But that sense of security is false. What will happen is this: all of the people who are in your insurance policy's "pool" of people were pretty healthy when they got issued their policy. But over time, a few have gotten sick, but most are still pretty healthy. The small number of sick people in the pool will start to make rates rise a bit. Then other insurance companies, and possibly your own insurance company, will seek out the people in the pool who are still healthy, and sell them insurance that is a bit cheaper, since there are no sick people in that new pool. As they keep doing this, only pretty sick people will be left in your pool, and your insurance rates will get very high. You won't be able to get new insurance from a private company, though, unless they exclude your expensive condition. So, just like people who had an explicit loss of an old insurer, you're stuck, and you really need reasonably priced insurance or you may go broke. (This continuous increase in price due to other insurance companies cherry-picking out healthy people from the pool actually happened to me about 5 or 10 years ago here in CT. I had a policy that started at about $1000 a year, and in less than 5 years it went to about $5000 a year, which was more than the cost of the high risk pool for my young age at the time. When I called the insurance company that had issued the policy to ask how high the rate might go, they told me they couldn't say, but then they connected me immediately to their Connecticut agent, who tried to sell me a new pre-existing-screened policy. (That is, they tried to cherry-pick me from their own pool.) At that point, I just took the high-risk pool even though I was healthy, in order to avoid any part in the insane system, and also resolved to leave CT for a community-rated state at the nearest economically opportune time.) (Aside: that insurance company probably had cherry picked other people out of its own pool prior, and that was probably, in part, responsible for my rate rising so high. Whether that is illegal or not -- I haven't checked -- is irrelevant. If they hadn't cherry picked healthy people out, other insurance companies would have. The pre-existing-screened system is fundamentally unsound without some form of community rating. Moreover, folks of an economics or mathematical bent will easily see that this product being billed as "insurance", which is supposed to pool risk, actually pools only the risk of costs for a period of time after disease onset, that period of time getting shorter and shorter as the technology for cherry-picking gets better and better. Only restraint on the part of cherry pickers, motivated not by any morality, but rather by not making too obvious the uselessness of the consequent product, prevents them from using computer and internet technology to bring that period of time of being insured down to say 1 hour from disease onset.)

The last resort high-risk pool is the entity designed by CT law to give some protection if you get stuck without insurance as you easily can in CT, as above. A number of states that are not community rated have such an entity, (subsidized by the government or other policies) and how much good they do depends on the state. A problem is that it's pretty expensive. These are last years rates for a high deductible ($2500 ded/$7500 per person max copay) plan, and here they are for an HMO with $5000 per person max copay. For a person in their early 60s without a that looks like about $23,000 per year per sick person in CT. For that age group, this is double or much more what your total medical payout would be in our neighboring states of NY, NJ, MA, and VT! Financially, CT is a very risky place to be. (Insurance may be lower if you're not sick now, since insurance companies don't have to sell to sick people. But, if you get sick, in a while your rates will be much higher). So the somewhat cheaper insurance you may have isn't very good insurance.

For some additional reference or information on this issue, here is Health Insurance site for Connecticut State. (This is a separate site than the HRA, which is an independent state-regulated). The information on the site is not terribly informative, and they give you no hint that your financial situation is much more dangerous in the state. You may find still find some helpful information on the site, and you can call them and see what options you may have. Note that there is something of a patchwork of low-income and for-employer plans that may conceivably help you in particular situations. You might find out about these if you call.

Say a CT Insurance Company Covers Me and Takes my Premiums: Do I have to Worry About the Not Paying Medical Bills Because They Accuse Me of Not Reporting a Pre-Existing Condition?? See CBS Evening News with Katie Couric story . Note all the reader discussion, after the story, generally highlighting the financial risk and ruin.

Technical note (individual/group covered by different state rules): Note that Connecticut, like many other states that do not have community rating for individual policies, has had, as of 1993, modified community rating for small group policies, i.e. policies covering the employees of businesses. This is the result of CT businesses screaming to the legislature, at that time, that the non-community-rated "cherry-picking" system was ridiculous, and they were having to fire sick workers, etc., just to survive, because they couldn't afford the really high premiums of sick workers. So the CT legislature changed the system to the reasonable one for businesses. (And I've recently observed the president of the Connecticut Business and Industry Association still asserting that the pre-1993 pre-existing-condition-screened system for business was ridiculous and destroying businesses, and still lauding (in 2007) the current modified-community-rating system for BUSINESS.) But, observe, INDIVIDUALS, being much weaker than businesses in CT, and perhaps having no substantial lobby that is smart enough to not be fooled by the nonsense from the powerful state insurance industry, still, 14 years later, have the faulty and financially dangerous pre-existing-condition screened system! And all CT residents under 65, if they find they can no longer rely on their business-based group insurance for whatever reason, are then at the mercy of the CT INDIVIDUAL insurance rules!



BEWARE THE FALSE ARGUMENT: INSURERS LEAVE THE STATE WHEN ANY FORM OF COMMUNITY RATING IS ENACTED. Many insurers do indeed leave the state when community rating is enacted. That's not the false part. The false part is what the insurers leaving means. It means two things: companies that have the business model of identifying healthy people who currently have health insurance, but can "cherry pick them" to sell them new insurance, will realise that there pernicious and destabilized practice has come to an end in the state and leave. (Good riddance.) A few more reputable insurers may leave as well: it simply means the new market, with cherry picking eliminated, is now one in which there must now be competition to actually insure well and efficiently, and they just have to leave. (In economics this is called "creative destruction" and it is a good thing.)

Who am I? I am Norm Spier, a mathematical statistician who lived in CT for 20 years ending in 5/07. I have been motivated to put this information on the internet by observing how few CT citizens -- even the most informed -- actually know about this critical deficiency in their financial security. (As with many of you, I really would prefer national universal coverage -- like every other industrialized country -- community rating will only help people with pretty decent incomes to start. In any case, lack of community rating, with those miserable high-risk rules in CT, are still important to know about. Folks may well be advised not to settle there, to avoid financial problems in the future, stemming from that you can't guarantee your own good health in the future. Indeed, though I had settled there for work some years ago, the dangerous situtation with the individual health insurance is what caused me to leave.)

This organization is trying to get health care for everyone in CT: HEALTHCARE4EVERY1 .

(They have a friendly web site, which makes it easy to email your state representatives and tell them you want health insurance for all in CT.


If you have any comments, please email me at norm@nastechservices.com