HIPAA Versus Underwritten: Premium Issue

Hope everyone had a good Thanksgiving and we are now heading into the Christmas season.

I ran across something interesting a few weeks ago and I wanted to share it with you. It forms the basis for the order in which I help people enroll in individual & family coverage in California.

As I mentioned in an earlier blog post, CA PPO plans are able to be rated up from the standard premium in increments determined by each carrier. Some carriers offer more tiers, meaning more chances to get coverage approved.

Anthem Blue Cross (CA) Level 1 (standard), +20%, +25%, +50%, +75%, +100% (6 tiers)
Blue Shield CA Tiers 1-5 (1 being 80% of standard cost which is not always realistic) (5 tiers)
Health Net CA standard, +25%, +50% (3 tiers)
Aetna A (standard), B and C (3 tiers)

As you can see, Anthem offers the best range with 6 full tiers, Blue Shield next with 5 (as stated, Tier 1 is less than likely in the majority of cases), and Health Net and Aetna have less at 3 tiers before decline.

With all of that out of the way, here is something to consider for those who are HIPAA-eligible:
There are cases where a rated premium on an underwritten plan can exceed the premium of the duplicate HIPAA plan. If you are approved say Level 1 + 50%, that premium may in fact be higher than the HIPAA PPO.

Now it gets sticky. Since you are enrolled in an underwritten plan, you have lost HIPAA eligibility (perhaps). There is a way around this if you are working with a good, head's up agent. During the 10-day free look period, you can cancel as never effective and retain HIPAA eligibility. It is a very short little window there.

The advantage of working with an agent (besides not costing you anything) is that we can see how the policy was rated before they even mail anything out to you. You won't know how you were approved until you receive the information in the mail if you bought direct.

Since this situation can and does happen, I prefer to enroll in HIPAA first then follow up immediately with an underwritten application. That way the HIPAA coverage is secured and we can try to get you a better offer through underwriting and make the switch.


  1. Thanks! I had no idea what they meant when I saw "Enrollment: Underwritten (1st), HIPAA (second)". Your post helped me a lot!!!
    All the best to you!



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