It\’s bad enough that health insurance rates in California keep going up (at an alarming rate in the last 18 months) but now we\’re starting to lose some of our payment options. It\’s really important to make sure your payment means is locked in and consistent since the main reason that most plans are lapsed unintentionally is due to missed payment. We want to avoid this at all costs since re-apply would require re-underwriting based on health outside of the grace period which we\’ll discuss in more detail. Now let\’s look at the changes in payment options for individual and family health coverage.

The standard payment option of a billing by mail is definitely still available. Most carriers will have a range of months you can choose from such as 1 month, bi-monthly, or quarterly. The bill will reflect this amount chosen. Some carriers will not allow a monthly billing with bi-monthly being the smallest duration. Most carriers have instituted fees for a direct billing by mail which generally run $1 to $2 monthly. Some members are adamant about receiving a hard bill or more importantly, not having any kind of auto-deduction but there are concerns. First, many lapses of coverage are due to not receiving a bill or more likely, receiving a bill and misplacing or tossing it out. We\’ve all been there. The other issue is now on the application and enrollment side. We used to be able to submit an application by fax or online without the first payment and if approved, the carrier would send out a bill for the first month\’s premium. This is no longer the case. Some carriers now require at least the first month\’s premium in-house before they will finalize or process the application. This can be a real delay to the whole process. Let\’s take a look at the other two options, one of which has been sidelined to only the first premium payment in most cases.

Credit cards were the first alternative option used for billing besides a direct billing and it allowed a great deal of flexibility and control in terms of paying California health insurance bills. They allowed a credit card payment for the first month\’s premium (which most carriers generally still do) which greatly sped up the application process since we could fax or apply online right away. They would also allow a member to pay re-occurring health insurance premium by credit card. When health reform was passed with it\’s MLR requirement (a percentage of total premium that must be used for health care re-imbursement), the carriers looked to cut any administrative cost it could find. One of these cuts was the ability to use credit cards since there\’s a vendor fee that must be paid by the carriers to the credit card company. As a result, we have since lost the ability to use credit cards for payment outside of the initial month\’s premium which facilitates applying for California health insurance.

The third payment option that we have not lost (yet) is the auto-deduction from a checking account. This can be done for the first month\’s and reoccurring premium as well. It\’s generally month to month and the auto-deduction will occur the first few days of each re-occurring month although the initial month\’s pull will generally happen immediately after approval of the policy. Keep in mind that you have a 10 day free look window from when they come back with an offer to cancel the coverage never effective for a full refund regardless of how you made the payment. There is no application fee.

Most California health insurance plans have a 30 day grace period for payment. Keep in mind that health insurance is generally pre-pay which means that you\’re paying for the next month in advance. The payment made up front with the application goes towards your first month of premium.

Dennis Jarvis is a licensed California health insurance agent with extensive knowledge of the Individual California health market. affordable California health insurance

Dennis Jarvis is a licensed California health insurance agent with extensive knowledge of the Individual and Small Group California health insurance market. http://www.calhealth.net

Author Bio: Dennis Jarvis is a licensed California health insurance agent with extensive knowledge of the Individual California health market. affordable California health insurance

Category: Finances
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