Your husband has retired early and his COBRA has run out. Your employer can't offer you a group insurance plan. You've been turned down for individual coverage because you are too high risk--you have a pre-existing condition. How do you get insurance? There are a few alternatives that may help:
Individual insurance policies
"Groups of one"
COBRA continuation coverage
HIPAA coverage
High-risk pools
Even if you don't read the rest of this article, please check out The Georgetown University Health Policy Institute's Consumer Guide for Getting and Keeping Health Insurance. You may view the guides online or download print-friendly versions of the guides. There's one for each state and the District of Columbia.
Individual Insurance Policies May Help People Without Group Coverage
In a few states, "medical underwriting" (charging higher premiums to sicker individuals) is simply not allowed. So individual policies are available and more affordable than they would be in other states.
Beyond these enlightened few states, a few more require that there be an "insurer of last resort"--an insurance company that must guarantee coverage to anyone who applies. These insurers may charge exorbitant premiums, though.
More information: American Diabetes Association's page on individual health insurance policies.
Groups of One Coverage May Help Self-employed Individuals
Federal law requires a company to have two employees, minimum, before it can offer a group health insurance plan to those two employees. In some states, however, a "group of one" is sufficient. Anyone can be self-employed and secure group health insurance coverage for themselves. In these states, insurers must offer coverage to groups of one. And rating limits apply -- premiums must stay at reasonable levels.
More information: American Diabetes Association's page on "groups of one" coverage for self-employed individuals.
COBRA Continuation Coverage May Help People Who Are Losing Group Health Coverage
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law that allows employees and their dependents (current, widowed, or divorced spouses, and/or dependent children) to continue their group health insurance coverage for 18-36 months after they lose a job or coverage would otherwise end. COBRA-eligible individuals pay premiums out of pocket, and those premiums can be 102% of what the company is charged for similar employee coverage.
Let's say you depend on your spouse for health insurance, but your spouse wants to retire early. He's not eligible yet for Medicare and has no employer-provided retiree health benefits. You don't work.
Under COBRA, you and your spouse may continue health insurance coverage with his employer's group plan if the employer had 20 employees or more in the year before your spouse retires. You would have 30 days to contact your benefits department and/or insurance plan to sign up.
More information:
Department of Labor's Continuation of Health Benefits (COBRA) Web page.
Department of Labor's FAQs on Continuation of Health Benefits (COBRA) Web page explains in detail what situations entitle employees, dependent children, and current/divorced/widowed spouses for COBRA coverage.
HIPAA Coverage Protects People in Group and Individual Insurance Plans
HIPAA (Health Insurance Portability and Accountability Act) established protections for certain people covered by either individual or group health insurance plans. As the DOL Web page on HIPAA explains, HIPAA includes protections for coverage under group health plans that
- limit exclusions for preexisting conditions;
- prohibit discrimination against employees and dependents based on their health status; and
- allow a special opportunity to enroll in a new plan to individuals in certain circumstances.
HIPAA may also give you a right to purchase individual coverage if you have no group health plan coverage available, and have exhausted COBRA or other continuation coverage.
Once people become HIPAA-eligible, they are guaranteed an offer of at
least two health insurance policies, regardless of any pre-existing
medical conditions they may have. In some states, there are caps on
what insurers may charge for this HIPAA-eligible insurance coverage.
To be HIPAA eligible, you must:
- Have had 18 months of continuous creditable coverage, at least the last day of that being under a group health plan. You may be asked to confirm this by showing a certificate of credible coverage. (See Center for Medicare Services FAQs page on creditable coverage for more info.)
- Have used up any COBRA coverage you were eligible for.
- Not be eligible for Medicare.
- Not have health insurance.
- Apply for coverage under HIPAA within 63 days of losing your prior health insurance coverage.
More information: Department of Labor's FAQs page on Continuation of Coverage under HIPAA.
High-Risk Pools Help the Medically Uninsurable
High-risk pools offer an important last resort for people who have been denied medical coverage because they are too sick, are HIPAA-eligible, are being charged exorbitant fees for private insurance, or who meet other key conditions (which may vary by state).
In 2005, 33 states offer high-risk pools. High-risk pools offer health insurance coverage similar to that sold in the private health insurance market. Benefits may be limited, and/or have a maximum lifetime cap. Some states' plans maybe closed to new enrollment and/or have a waiting list. Premiums for coverage through a high-risk pool can be very high, costing twice as much as those for private health insurance.
More information:
View map of states that offer high-risk pools: http://www.healthinsurance.org/riskpoolinfo.html (scroll down until you see the map).
American Diabetes Association's page on High-Risk Pools.
NASCHIP's Web site provides contact information for state high-risk pools.
Health Affairs presents an article that explores the challenges involved with high-risk pools, including funding problems, enrollment limitations, affordability, and waiting periods.
