Question on Obtaining Private Health Insurance

[mykidslovedogs]

Originally Posted by Nords

So, yes, I'd say that you're right about getting coverage before you get your next physical.

This is just an FYI, I've found that if you are over age 55 and haven't had a physical in the past several years, the underwriter will likely request one before issuing a policy. Newly diagnosed high cholesterol can cause a decline in the short-run, but if it gets under control either with medication or diet and exercise within the next 6 months, you can often times reapply with favorable results.

I bet you all guessed by now that I am an insurance agent....however, I don't intend on marketing myself through your forum. You all can feel free to ask me any questions, though, and I'll do the best I can.

[Tracy42]

All insurance companies are limited for individual policies to the state(s) in which they are licensed to do business. Each state has different rules about what can be excluded/included in the policy. With BCBS plans, when you move across the state line, you typically lose eligibility to keep your prior individual policy, even with the same insurance company. For example, Kentucky and Indiana are both WellPoint BCBS states, but Kentucky has guaranteed issue individual insurance and Indiana does not. If you change your residence from Kentucky to Indiana, you lose eligibility under your Kentucky WellPoint plan, and would have to apply anew (with underwriting) to WellPoint for an individual policy in Indiana. It's possible that some of the other multi-state BCBS companies (Illinois and Texas are operated by the same plan, for example) may grandfather you in from one state they operate in to another, but for sure if you are switching BCBS carriers, you will have to re-apply in your new state.

An exception to this would be if you were lucky enough to be issued an individual conversion policy as part of a group retirement benefit (not many of these around anymore). In that case you would be able to keep your coverage in place despite the residence change to another state, and because BCBS plans grant reciprocal access to each other's provider networks, you would have participating providers (and discounts) wherever you ended up.

[Rich_in_Tampa]

Originally Posted by Tracy42

All insurance companies are limited for individual policies to the state(s) in which they are licensed to do business... when you move across the state line, you typically lose eligibility to keep your prior individual policy, even with the same insurance company

Thank you, Tracy. That's helpful to know.

So, if someone with great individual or group coverage in one state decides to move to another state (career, family, retirement, etc.) and does not join a new group policy, they can be dropped, or their premiums could change drastically? Or that hypertension they were so well covered for in their original state my now exclude them from coverage in a different state?

Sounds like health insurance "anarchy" can seriously trap you, or at least be a major factor in your decision to move from one state to another. Not good.

[magellan_nh]

I've heard some horror stories about people leaving out big stuff from a health-care application and then having a giant bill denied later on because they didn't provide an accurate and complete application.

Does anyone know what happens if you forget to list something from your past on your application? Is there a time limit of how far the "have you ever" question really goes back? Also, is there a period of time after which it doesn't matter if you missed something irrelevent from 20 years ago on the application?

I recently filled out a BCBS application for an individual policy for my wife and I and I'm amazed at how detailed the application is. I think I got all the big stuff, but I'm not positive I covered every last symptom from every doctor visit for the past 40+ years, yet the way the application is worded, that's what they are asking for.

Jim

[Rich_in_Tampa]

Originally Posted by magellan

I've heard some horror stories about people leaving out big stuff from a health-care application and then having a giant bill denied later on because they didn't provide an accurate and complete application.

Jim, I am sure it can vary from contract to contract but falsifying an application either explicitly or by omission certainly can jeopardize your coverage. Whether that relates solely to conditions related to the omission or to the entire contract I don't know.

Life insurance policies have (or used to have) a contestability provision whereby if a stated period of time elapsed (e.g. 2 years) the insurer no longer had the right to rescind coverage based on information provided in the application. Sounds like something states might mandate. Never heard about this with a health policy.

All you can and should do is answer the questions the best you can. Sometimes my patients ask me about their applications; the only errors I saw were when they tried to use a little more technical jargon than they really understood. For example, some patients think that hypertension means stress and anxiety, and when asked if they had this would answer from that perspective. Or they think that asthma is an allergy, not a respiratory disorder -- things like that.

No law against stating, "not sure."

[mykidslovedogs]

Originally Posted by magellan

I've heard some horror stories about people leaving out big stuff from a health-care application and then having a giant bill denied later on because they didn't provide an accurate and complete application.

Does anyone know what happens if you forget to list something from your past on your application? Is there a time limit of how far the "have you ever" question really goes back? Also, is there a period of time after which it doesn't matter if you missed something irrelevent from 20 years ago on the application?

I recently filled out a BCBS application for an individual policy for my wife and I and I'm amazed at how detailed the application is. I think I got all the big stuff, but I'm not positive I covered every last symptom from every doctor visit for the past 40+ years, yet the way the application is worded, that's what they are asking for.

Jim

In Colorado, the contestability law regarding misstatements is two years. However, there is no limitation on fraudulent failure to disclose. It's pretty easy for insurance companies to tell the difference between a misstatement and a fraudulent failure to disclose. People usually don't forget the big things. With a misstatement, they'll usually just go back and re-underwrite the condition vs. rescinding coverage. For example, I had a client who failed to disclose that she had high cholesterol. After she filled a prescription about 30 days after obtaining the policy, the insurance company went back and re-underwrote her and asked her for back pay on the additional premium she would have been charged had the insurance company known she had the condition. This could have been a misstatement or fraud. Either way, it was not wise to leave it off of the application. The insurance carrier could have rescinded coverage, but they were fair in that they only charged her what she would have owed had she been honest on the application, and they offered for her to keep the coverage if she would back pay.

However, let's say you purposefully fail to disclose cancer, and a couple of months down the road you end up with a large claim related to the removal of a cancerous tumor. Well, then, it is likely the insurance carrier will rescind coverage and return all of your premiums you paid back to you, just as if you never had the policy. Cancer is not something that people usually forget about. When you fail to disclose something like that, it's going to be hard to prove that it was a simple misstatement.

[mykidslovedogs]

Originally Posted by Tracy42

All insurance companies are limited for individual policies to the state(s) in which they are licensed to do business. Each state has different rules about what can be excluded/included in the policy. With BCBS plans, when you move across the state line, you typically lose eligibility to keep your prior individual policy, even with the same insurance company.

That's true with BCBS, but not so true with other carriers like Humana One and Golden Rule that have large nationwide networks and are separate entities in different states like BCBS is. For example, Anthem BCBS of Colorado operates separately from BCBS of Arizona, so when you move across state lines, you have to requalify. However, with plans like Humana One and Golden Rule, these companies are operated out of the same headquarters no matter which State you live in, so as long as these carriers have a network in the area and do business in that state, you won't have to be re-underwritten when you move. In a case like that, all you have to do is change your address and your premiums will likely change based on the rates in that State. You can call your carrier before you move or even before you buy your policy to make sure whether or not you will have to re-qualify in a new state.

[mykidslovedogs]

Originally Posted by mykidslovedogs

That's true with BCBS, but not so true with other carriers like Humana One and Golden Rule that have large nationwide networks and are separate entities in different states like BCBS is.

Oops, that sentence should have said...and are NOT separate entities in different states...

[modlair]

I have some additional data. To my astonishment it seems to be good news. It also falls in the category of Read The Friggin Manual.

I have typed below a paragraph (the abbrevs are mine) from the policy documentation I was given. This is a $2500 deductible policy with I think 5K max out of pocket. It is BC/BS. "This Agreement" seems to be the policy in my hands.

"Transfer of Coverage

If you move to an area served by another Blue Cross and/or Blue Shield organization, coverage may be transferred to the BC and/or BS organization serving your new address. The new BC and/or BS org must offer you at least its group conversion policy. This is a type of policy normally provided to employees who leave a group and apply for new coverage as an individual. Conversion policies provide coverage without an exam or health statement. If you accept the conversion policy, the new BC and/or BS org will credit you with the length of your enrollment under this Agreement for purposes of waiting periods. Any physical or mental conditions covered by this Agreement will be covered by the new BC and/or BS org without a new waiting period if the new BC and/or BS org offers this feature to others carrying the same coverage. The Premiums and Benefits available from the new BC and/or BS org may vary significantly from those offered by this Agreement. The new BC and/or BS org may also offer you other types of coverage that are outside of this transfer of coverage program."

There are some items of worry in there as to varied premiums, but it very much looks like a condition that develops while under this policy will not be an exclusion in a new policy bought due to relocation.

I am surprised they let people get away with this. It would surely be a way for them to make more money by reducing their risk when someone moves.

[REWahoo]

Originally Posted by rodmail

"Transfer of Coverage

If you move to an area served by another Blue Cross and/or Blue Shield organization, coverage may be transferred to the BC and/or BS organization serving your new address. The new BC and/or BS org must offer you at least its group conversion policy. This is a type of policy normally provided to employees who leave a group and apply for new coverage as an individual. Conversion policies provide coverage without an exam or health statement. If you accept the conversion policy, the new BC and/or BS org will credit you with the length of your enrollment under this Agreement for purposes of waiting periods. Any physical or mental conditions covered by this Agreement will be covered by the new BC and/or BS org without a new waiting period if the new BC and/or BS org offers this feature to others carrying the same coverage. The Premiums and Benefits available from the new BC and/or BS org may vary significantly from those offered by this Agreement. The new BC and/or BS org may also offer you other types of coverage that are outside of this transfer of coverage program."

I'm sure it will come as no surprise that all BC/BS policies are not created equal. Mine states:

"A change in address may result in:
- A change in premium
- Termination of coverage if the permanent residence is outside the state..."

[modlair]

I suppose I could still be worried, but your point about all such policies not being equal gives rise to the question . . . how does this policy I have now have the ability to impose a requirement on another BC/BS organization?

It would appear that even though in different states, they are in some way still part of a single org that can impose requirements on its . . . component parts? BTW the policy does say I have to notify them of change of address within 30 days.

I'm going to call them and chat about all this, but the text does say what it says.

[mykidslovedogs]

Rodmail -

Conversion of coverage is guaranteed issue and hideously expensive. Unfortunately, BCBS companies in the varying states operate as separate entities, so they don't make their coverage portable from state to state without reunderwriting. On the otherhand, a Humana One or Golden Rule policy or even a Time Insurance/Assurant Health policy would probably be different, because they operate under the same entity from state to state, so a lot of times, these companies offer portability of coverage from one state to the next just as long as they are doing business in that state.

[Martha]

Rodmail, as Mykids said, conversion policies can be very expensive. Also, they often don't provide as good coverage as your original plan. If you are healthy you may do better going through the underwriting process and buying individual insurance.

[magellan_nh]

Thanks to Rich and Mykids for the info above. I've definitely covered everything significant on the application. My concern was more about a visit to the doc in 1991 for strep throat that I missed, or something like that.

Anyhow, another question I wonder about is if some insurance companies are much better negotiating prices with care providers than others?

For example, I currently have COBRA under BCBS and when I look at EOB's, I'm amazed at how much less than "list" the negotiated price is. For an example, the lab cost for a thyroid test is listed at around $140, but gets paid at $24. When I'm paying all the bills, I'd much rather $24 than $140. I know this has been talked about plenty before, but it seems really important.

If one insurer is better than others at negotiating prices, even if their policy was more expensive by $50 per month, it might still be the best deal (all things equal), just because of the low prices you get as a result of having coverage through them.

Anyone know of any sources of info on this?

Jim

[mykidslovedogs]

I don't think the negotiated discounts are going to vary that much from carrier to carrier.

[kz]

Just last week hubby and I were declined by Humana since he has borderline sleep apnea. Shocked the heck out of me. Our agent says BCBS will insure us with a slightly higher premium but I'm not holding my breath. Our blood pressures are 120/80, our cholesterols below 200, within the standard weight for our height, walk 2.5 miles a day and yet sleep apnea got us. Actually they'll insure me but not him. For now we'll stay with previous employer's plan although it hurts to fork out $1140/month. The saving grace, though, is we can afford it and they can never cancel us.

[mykidslovedogs]

KZ - Yes, sleep apnea of any sort raises a real red flag with insurance companies. I have run into that before with other clients of mine. I guess it must create a high risk for the insurance company. Just a question..why are you not going to accept the coverage for yourself and leave your husband on the old plan? Wouldn't that reduce your premiums significantly if you accepted the other policy? It is definately possible that Blue Cross may accept with a rate up, but their premiums might be higher for you than Humana One (it depends on the state you live in). I have lots of clients with spouses on two different plans. Blue Cross has recently changed underwriting guidelines to allow for rate-ups instead of exclusions and declines. You might also check into Aetna and see if they are doing business in your state. Their underwriting guidelines seem to be a bit "looser" as well.

[whitestick]

Originally Posted by magellan

Anyhow, another question I wonder about is if some insurance companies are much better negotiating prices with care providers than others?

For example, I currently have COBRA under BCBS and when I look at EOB's, I'm amazed at how much less than "list" the negotiated price is. For an example, the lab cost for a thyroid test is listed at around $140, but gets paid at $24. When I'm paying all the bills, I'd much rather $24 than $140. I know this has been talked about plenty before, but it seems really important.

If one insurer is better than others at negotiating prices, even if their policy was more expensive by $50 per month, it might still be the best deal (all things equal), just because of the low prices you get as a result of having coverage through them.

Anyone know of any sources of info on this?

Jim

I don't know of source of info, but I have observed the same thing. My DW and I have different carriers, and occasionally the hospital messes up and bills the wrong one first, and there are major differences between what each carrier accepts as an negotiated price. In one instance there was several thousand dollars difference, and of course, when we have a co-pay, it affects our percentage as well.