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COBRA and Individual Medical Insurance
Old 09-25-2010, 12:37 PM   #1
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COBRA and Individual Medical Insurance

Anyone have experience with running out of COBRA insurance and getting an individual policy? I was wondering if it makes more sense to got to the doctor for a physical before it runs out and get treated if he finds anything while we have good insurance.

I have read that you shouldn't have tests done while on COBRA because then you might have a pre-existing condition when you go looking for private insurance. I thought if you don't have a lapse of 63 days between insurance policies that it didn't matter?

My husband and I will be 55 next year when the insurance runs out so we figure it will cost us plenty even without any pre-existing conditions.

Anyone know what would be the best thing to do? Do they require a physical normally when applying for new medical insurance?
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Old 09-25-2010, 04:24 PM   #2
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Do they require a physical normally when applying for new medical insurance?
Not normally.

Depending on cost, you might consider skipping COBRA altogether and getting individual policies as you lose employee coverage.

Some good info here if you haven't already seen it: (FAQ archive) Buying Private Health Insurance
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Old 09-26-2010, 10:53 AM   #3
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I went on COBRA in July, 2007, when I cut my weekly hours worked from 20 to 12, making me ineligible for group health coverage in my (former) company's plan. In those 18 months, while I still had dental coverage as part of COBRA, I had some costly dental work done.

In 2008, I was looking for a decent, affordable individual HI policy to begin in January, 2009, after COBRA expired (whether I was still working or not; I would RE at the end of October). I did not need any physical exam because there was never any lapse in coverage (or a permissible lapse of 63 days). My new HI policy cost about $100 more a month and did not include dental, although by then the cost of my dental coverage under COBRA plus copays and deductibles was about the same as simply paying the whole bill myself as along as I had no major problems - hence why I had that costly dental work done in 2007-08.

Most of my HI premiums, even though in 2011 they will have risen by 50% over their 2009 levels, are tax-deductible so that mitigates their fast-rising amounts. Still, it puts a small dent in my long-term ER budget.
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Old 09-26-2010, 02:01 PM   #4
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I am sure that you are aware of this, but I was in a similar situation and age when I looked into individual insurance.

That fact is when you are over 55, the insurance companies will label ANYTHING as pre existing to exclude you.

For example, when I was 55 I applied for private insurance, but at a recent physical, had a blood pressure reading of 136/85. It was due to white coat syndrome, happens all the time.

Was rejected and told not to apply unless it got below 120/80 for six months.

Healthy in every other way.

My only point is, many think pre-existing has to besomething major like heart disease, cancer, diabetic, etc. but they will use anything.

So just take care in assuming you can get. (It will only be harder until 2014 when they will have to take you, but at hardly an affordable cost)
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Old 09-27-2010, 12:26 PM   #5
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So are you saying, I shouldn't get a physical before my "good" insurance with COBRA runs out because the private insurers will use any test results as a reason not to insure me even though there would be no lapse in coverage?
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Old 09-27-2010, 12:43 PM   #6
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It is normally a big mistake to continue with COBRA if you know that you will probably go to individual insurance later. COBRA is just temporary insurance, not real long term health insurance. In fact, temporary insurance that you buy in time blocks is normally much cheaper (like half the price) than long term insurance that cannot drop you.

My understanding is that the not-having-a-lapse issue without medical underwriting is relevant to insurance offered under HIPAA rules, and this is more expensive insurance (possibly much more expensive). You will not want to restrict yourself to these policies or this avenue to get your insurance. I don't remember the details exactly.

I think my individual health insurance had something to the effect that you must have had a physical in the last 3 years. But I am not sure what the norm is.

You could start the process, and see what the applications require.

You should get all of your medical records as soon as possible, you will probably need them for the application process. This can take time to get them.

You have made a big mistake by going on COBRA and waiting until now to begin this process, you will have to work quickly now and start researching and gathering medical records.

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Old 09-27-2010, 02:54 PM   #7
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All I was saying is that the more that is on record, no matter how much you might consider it minor, the insurance companies can and will use to not approve an application OR highly likely, charge much more to cover.

DO NOT believe rates you see on einsurance and other websites, they always will charge 25% to 100% more depending on what they pick out to as driver for potential issues in underwriters mind.

Hope you have good luck in today's climate and have better luck than I did considering I have no major issues, am not overweight, etc.

Of course there might be the high risk pool back up in your state that new health care bill set up, but those policies are very high priced, you have to uninsured for six months and cover major medical, but not much on normal doctor visits (At least in my state)
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Old 09-28-2010, 04:19 PM   #8
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Originally Posted by Corporate ORphan View Post
Anyone have experience with running out of COBRA insurance and getting an individual policy? I was wondering if it makes more sense to got to the doctor for a physical before it runs out and get treated if he finds anything while we have good insurance.

I have read that you shouldn't have tests done while on COBRA because then you might have a pre-existing condition when you go looking for private insurance. I thought if you don't have a lapse of 63 days between insurance policies that it didn't matter?

My husband and I will be 55 next year when the insurance runs out so we figure it will cost us plenty even without any pre-existing conditions.

Anyone know what would be the best thing to do? Do they require a physical normally when applying for new medical insurance?
Lock in the insurance, then go to the doctor afterwards. Most companies don't require any physical exam for health insurance. You will be in a world of trouble if they find something on the exam that you weren't expecting. If you can't qualify for coverage, you would have to take a guaranteed-issue HIPAA policy when your 18 months of COBRA is up. Regardless of COBRA being 18 months in duration, you should lock in your individual insurability as soon as possible. I see it over and over and over and over again where people wait until month 16 to start looking for new coverage and something happened to their health between months 1-16 causing them to be ineligible.

Talk to an independent agent that represents the major health insurance companies in your state. Ask plenty of questions.
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Old 09-28-2010, 09:21 PM   #9
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Earlier this year I retired and went from my company health insurance to individual. In my case I stayed with the same insurance company (Aetna). When I applied for the new policy Aetna called me and asked questions on every doctor visit I've had for at least the past 5 years. Not sure how much of the details of my medical history Aetna had access to. From the questions I was asked my impression was that they only had records of the dates/times of office visits and charges but not the results of the visits. They knew from the charges that I had a colonoscopy when I turned 50 but wanted me to tell them if any problems were found.
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Old 09-29-2010, 07:45 AM   #10
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So I should start looking now even though I can stay on COBRA until August of 2011? SInce I was laid off I am getting a 65% discount on the insurance for 15 months so its a pretty good deal.
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Old 09-29-2010, 07:50 AM   #11
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So I should start looking now even though I can stay on COBRA until August of 2011? SInce I was laid off I am getting a 65% discount on the insurance for 15 months so its a pretty good deal.
That is a good deal. Depends if you feel like gambling on your insurability. If you had to pay HIPAA premiums starting in 2011, the deal wouldn't look so good anymore. If only we could predict the future...
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Old 09-29-2010, 07:57 AM   #12
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So I should start looking now even though I can stay on COBRA until August of 2011? SInce I was laid off I am getting a 65% discount on the insurance for 15 months so its a pretty good deal.
You need to balance the current short-term savings with the potential risk of developing a health issue that will make it difficult and costly(er) to get an individual policy. The sad fact is you may already have a pre-existing condition and not realize it.

In my case (5 years ago) I went on COBRA. But my spouse and I did apply for individual policies prior to going on COBRA so we could do a cost comparison. Turns out a couple of what to me appeared to be trivial past medical issues for DW was not trivial to health insurers. The only way to get coverage for her was through the state high risk pool, so I opted to go on COBRA for the 18 months and risk me having a problem as well and both of us ending up in the pool.

The point is, every situation is different and you have to look at all your options. You can't do that until you apply for individual coverage and see what those options are.
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Old 09-29-2010, 08:18 AM   #13
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Orphan...I'm glad you started this thread because I am in the exact same situation that you describe. Laid off in February 2010 and have COBRA with a 65% discount until June 2011. Great coverage for my husband and I at a very reasonable cost so I dread needing to secure other coverage. My husband was laid off four months earlier so we happily took this as a sign that the universe wanted us to retire. I'm 59 and he is 57.

Looking at the expenses of our typical healh care needs now, I'm considering keeping COBRA until at least May 2011 and applying for a catastrophic HI policy with a high deductable.....like $5000/yr. I'll need to work the numbers, but seems like this might be the most cost effective for us unless, of course, catastrophe happens. There's that "if only we could predict the future" again......
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Old 09-29-2010, 09:56 AM   #14
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So I should start looking now even though I can stay on COBRA until August of 2011? SInce I was laid off I am getting a 65% discount on the insurance for 15 months so its a pretty good deal.
No harm in starting to look. The subsidy is wonderful for those who are receiving it, but I'd also say this: Y'all could develop a serious medical condition between now and August 2011. There's something to be said for having Uncle Sam pay 65% of your premiums, but there is also something to be said to locking in "preferred" rates now if you are healthy, have a desirable BMI and no significant preexisting conditions.

If there is anything you need to do to "get healthier" (lose weight, quit smoking or drinking, exercise more) to get preferred rates, you have about 10 months to get there.

As far as the 63 day lapse goes, HIPAA requires that if you have qualifying coverage and exhaust COBRA with no gap in coverage of 63 days or more, insurers can not carve out preexisting condition exclusions. It says nothing about the affordability of such a policy.
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Old 09-30-2010, 08:14 AM   #15
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I hadn't thought about locking in the rate while my husband and I are healthy (at least I think we are... my guess is the insurers will probably classify some minor things as pre-existing conditions). However, wouldn't they just increase the rates the following year based on whatever was ailing us?

Also, if I go to an individual policy before the COBRA runs out, don't I lose the protection from HIPAA that requires them to cover us (though it might not be affordable.)
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Old 09-30-2010, 08:25 AM   #16
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I hadn't thought about locking in the rate while my husband and I are healthy (at least I think we are... my guess is the insurers will probably classify some minor things as pre-existing conditions). However, wouldn't they just increase the rates the following year based on whatever was ailing us?

Also, if I go to an individual policy before the COBRA runs out, don't I lose the protection from HIPAA that requires them to cover us (though it might not be affordable.)
They can't increase the rates based on your claims, they can only increase the rates for all policyholders. Either way, the rates next year will still be higher than this year if you wait until COBRA runs out. You wouldn't need the HIPAA "protection" if you have already locked in your insurability with an individual market plan since they can't take it away from you.

If you want to share what type of pre-existing conditions there are, I can give you some input on what to expect. Every company is different in their underwriting and I would suggest finding a local independent agent who offers coverage from the major carriers in your area and can give you more specific guidance.
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Old 09-30-2010, 08:36 AM   #17
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I hadn't thought about locking in the rate while my husband and I are healthy (at least I think we are... my guess is the insurers will probably classify some minor things as pre-existing conditions).[ However, wouldn't they just increase the rates the following year based on whatever was ailing us?
Depends on the condition. Some conditions may cause you to be turned down for insurance. As dgoldenz says, insurance companies differ on how they treat pre-existing conditions and whether those conditions will prevent you from buying a policy. Sometimes they will be excluded from a policy, but not all states allow insurance companies to do that. Sometimes they may cause you to pay a higher rate, but again, state law can limit insurance companies ability to charge you a higher rate.

There is some dispute out there over how often insurance companies raise rates based on individual claims experience. Some states don't allow it. But there is evidence that it has happened with some companies in some states. However, even if insurance companies rarely do this, they may increase the rate for your whole group and then encourage people who are healthy to buy a new, cheaper insurance plan.

These complexities are reasons to work with an independent insurance broker who can help you find the best plan for you with an insurer that has a good reputation.

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Also, if I go to an individual policy before the COBRA runs out, don't I lose the protection from HIPAA that requires them to cover us (though it might not be affordable.)
Yes, but you will have insurance so you don't need the HIPAA protection. HIPAA only protects you when moving from the group plan to the non-group plan.
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Old 10-01-2010, 03:19 PM   #18
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Thanks for all the info.

As far as pre-existing conditions, last year: my husband had a small skin cancer or a pre-skin cancerous (don't remember exactly what it was) lesion removed (in fact it was so small the first doctor removed all of it when he did the biopsy leaving nothing for the plastic surgeon to remove.) I had a small pre-cancerous lesion removed. We both had polyps removed during colonoscopies. That's really all I can think of. Everything else is normal. We don't take any meds. Any info you can give me on how they would treat those things would be great!

Another question, I have heard you don't get that much of a deal if you sign up for a group policy vs an individual one. We have a friend who owns his own small business that supplies health insurance for his employees. We were thinking of seeing if we could get on his policy and pay him for it. Would that probably be a better deal for us?
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Old 10-01-2010, 03:27 PM   #19
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You can't get on his group policy without being an employee. I would look at a company that doesn't use exclusion riders. Usually that is your local BCBS or Aetna, though there might be a regional company in your area that works the same way. Contact an independent agent. They will have a better idea of what company might work and it doesn't cost you anything.
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Old 10-01-2010, 03:30 PM   #20
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Thanks for all the info.

As far as pre-existing conditions, last year: my husband had a small skin cancer or a pre-skin cancerous (don't remember exactly what it was) lesion removed (in fact it was so small the first doctor removed all of it when he did the biopsy leaving nothing for the plastic surgeon to remove.) I had a small pre-cancerous lesion removed. We both had polyps removed during colonoscopies. That's really all I can think of. Everything else is normal. We don't take any meds. Any info you can give me on how they would treat those things would be great!
I cannot predict how your application might be treated, but DW had a similar situation regarding the removal of a pre-cancerous skin lesion and it was regarded as a pre-existing condition. She was excluded from coverage for skin cancers of any type.
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