Health insurance costs high for age 55 and up

Health insurance rates continue to rise as the cost of medical care goes up. Particularly hard hit for individual coverage are folks in the 55 and older age bracket who are buying outside of a group plan for the first time. They are considered the highest risk pre-Medicare age bracket by insurance providers, according to local agents.

This is the age at which people begin to have strokes, heart attacks, cancer or may develop high blood pressure or diabetes, according to Louis Barth-olomew, agent with Rebsamen Thom-ison Insurance Company.

Although individual health insurance is not cheap at any age, insurance companies are leery of people 55 and older, and their caution is reflected in the premiums assessed.

A person taking early retirement who hasn't yet reached the age for Medicare would be wise to shop around for rates as soon as possible, even if they plan to use the grace period on their group plan under Consolidated Omnibus Budget Reconciliation Act, according to Teresa Klingensmith, life and health insurance manager at Great Southern Insurance.

"It's not always wise to carry the COBRA plan for the full 18 months allowed," Klingensmith said. A person may have a stroke, heart attack or develop cancer during the grace period and become uninsurable, she warned.

The government has taken steps to protect people who has have one of these conditions prior to coming off his former group plan under the Health Insurance Portability and Accountability Act, or HIPAA, established about 1995, according to Bartholomew.

Bartholomew gave an example under one local HMO plan in which the individual is guaranteed coverage at age 58 with a $558 premium per month for a male and $566 per month for a female.

The premium increases to $734 for the male who purchases at age 60 and $698 for the female, he stated.

At this stage in life, the man's risk factor has increased because the risk of prostate problems has gone up, and some of the risk for the woman is reduced because she is considered beyond the age to be plagued with problems of the reproductive system.

Before COBRA and HIPAA were initiated, people with chronic high blood pressure or diabetes were considered uninsurable after they left their group plans. While government intervention prevented these people from being excluded from coverage, in many cases the rates alone put the policies out of reach.

A healthy individual older than 55 gets a better break, with premiums ranging from $200 per month to $350 per month for adequate coverage. They must answer all health questions on the application and have no pre-existing diseases, according to Bartholomew.

Sometimes a person can opt for a reduced premium if they are willing to sign a waiver that extends the waiting period to exclude pre-existing conditions, such as heart disease and cancer, to up to 2 years. The most common waiting period in such policies is 12 months, Barth-olomew said.

"We have to accept that in America we have the best medical care in the world and that we have to pay for it," said Nick Love, owner of Love Insurance & Financial Service Inc. The best thing a person 55 or older can do to alleviate the high cost of individual health insurance is to take advantage of a group plan if possible. This could mean finding a post-career job that provides health care benefits.

It is also possible to form a small group, in the case where a person leaves a job to become self-employed, Love said. Even a husband and wife in a home-based business can form a group and get some leverage on the premium assessed.

Love said he believes that as long as medical costs keep rising, insurance rates will go up accordingly. There appears to be no end in sight, he said.

Bartholomew noted there was a 10 percent increase in rates in the last year and records show a similar annual increase has occurred each year in the last few years.

People should study their options carefully when taking early retirement and be aware of the possibilities.

It is possible to get premiums down by raising deductibles, according to Klingensmith. The person must decide how much risk of illness they are able to assume themselves.

Love agreed. "Even if they take a $5,000 deductible, they would still be covered against catastrophe," he said.

The toughest thing with people coming out of group health insurance is revealing the rates, Love said. Once the shock has worn off, the next step is to show them options and let them choose what fits their needs.