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Health insurance, unlike property and casualty products such as auto insurance and homeowners policies, is a guaranteed renewable product for individuals subscribed to Ohio Farm Bureau health plans. In other words, as long as premiums are paid, an individual cannot be cancelled unless there is some form of fraud or misrepresentation.

This is an extremely important factor when considering how risks and rates are determined.

In property and casualty insurance, policyholders are rated initially based upon their "experience" – driving records, accidents, homeowners claims, type of car driven. The same is true in health insurance at the time of initial application. Premiums can be established with rating factors (such as health history, age, plan type) or if underwriting criteria are met. In both instances, people can be declined coverage.

That is where the road forks, so to speak.

With the majority of property and casualty products, an insured can expect premium increases based upon "individual" history such as at-fault accidents, moving violations, and claims – or even be cancelled for a poor driving history.

In health insurance, once accepted into a plan, a person can have multiple surgeries or develop a chronic condition and his or her "individual" rates cannot be changed – except when age changes or if another plan is selected. However, there will be premium increases for the entire plan. The experience of all insureds in a plan is "pooled" and premiums or rate increases are established. Generally speaking, the worse the loss experience of the overall plan, the larger the premium increase. But no one is singled out for premium changes because of adverse claims history.

In layman's terms, multiple traffic tickets or accidents in a year will most likely cause a person's auto premiums to be increased "individually" or could result in cancellation. Yet, in health insurance, an individual cannot be assessed premium increases or cancellation of coverage based upon having a personal medical condition or surgeries in a given year or over time.

Generally, the cost of repairing a damaged vehicle or home is moderate unless there is a catastrophic loss. Health insurance claims can soar to hundreds of thousands or even millions of dollars. Insurance companies hope that this potential is spread over many health policyholders to mitigate risk. So, setting prices for health insurance extends beyond you and your family's health conditions.

This analogy might help us better understand health insurance and appreciate its importance. Health insurance is about being there to provide quality health care and cover medical costs. Catastrophic illness or injury can strike any of us at any age, which is really why we buy health insurance protection.

The Ohio Farm Bureau sponsors MyHealth, a popular health insurance program for members which is available in all counties and has a variety of plan options. Contact a nearby Nationwide agent or call your Farm Bureau county office for details.