RE: the post about health ins, credit and health

[Fireup2020]

RE: the post about health ins, credit and health

Please do not laugh or yell too much in response.

I am trying to overcome my ignorance in this matter, so am posting the question, since none of these things have ever occurred to me. What does one's health or credit history have to do with medical insurance?

(I was active in military, currently a reservist, currently a civil servant, and use the VA for much of my health care - if this helps explain my ignorance)

Thanks!

 

[W2R]

Apparently if you are not healthy and you apply for an individual health insurance policy, insurace companies are likely to quote high rates or refuse to insure you at all.

I would imagine the same might be true if your credit history is bad (?)

I haven't run into any of this, since I am covered on a group policy. Hope this helps.

 

[mykidslovedogs]

Credit history doesn't matter. If you pay your premiums, you are covered. As soon as you stop, the policy will lapse.

As far as health history goes, it does make a difference in the individual market. Unlike group or employer sponsored insurance, which is guaranteed issue, individual health insurance is typically medically underwritten, meaning you can be rated, have exclusions of coverage for conditions that existed before the policy went into force, or you can even be declined for coverage if you present a very high risk to the insurance carrier. It has to be this way, otherwise, no one would ever buy health insurance until they get sick.

In the group market (employer-sponsored), insurance carriers are somewhat protected from adverse selection (buying insurance only when it is needed) because they can prevent someone from enrolling late by enforcing open enrollement periods and they deal with the law of large numbers, too, so the unhealthy people's claims are offset by the healthier people's premiums. Healthy people are motivated to participate, because the employer's pays the majority or even all of their premiums, so that helps offset the claims of the unhealthy people.

If you live in NJ, I don't think you have to deal with medical underwriting, because I'm pretty sure NJ state law requires all insurance to be guaranteed issue (even individual plans)...thus insurance becomes extremely expensive in the individual market in that state, because no one buys it until they get sick. There's no incentive for healthy people to buy it, because, number one, the premiums are too high, and number two, they know they can get it if they need it. Since the market gets flooded with more unhealthy people than healthy, the premiums go waaaayyyy up. Also, very few carriers want to do business there because of the state laws, so competition is lacking, thus prices are driven higher because of that too. Therefore, even though you can't be declined coverage, you also are unlikely to be able to afford coverage in that state without having it through an employer-sponsored plan.

 

[cute fuzzy bunny]

Credit history doesn't matter.

Wellll...heres the thing...theres an established correlation between poor credit history and poor health. Insurers "resolve" this problem by limiting their coverages and plans to specific zip codes. You might find that a fair number of "bad neighborhoods" filled with people of poor health and equally poor credit history are not in a "covered area".

I noticed that a good number of insurers dont offer their better plans in my area, for example.

 

[mykidslovedogs]

What state do you live in? Usually, coverage areas have to do with HMO products. I haven't experienced "coverage areas" with PPO's. If a network exists in and around the zipcode, then you can buy the policy in that area with a PPO. At least, that's been my experience in Colorado.

 

[cute fuzzy bunny]

Yep, they were HMO's.

California.

 

[mykidslovedogs]

Kaiser? In Colorado, Kaiser is the only carrier with "coverage areas" that I know of.

 

[cute fuzzy bunny]

Kaiser and there were two others that offered plans a bit further south but not in my area...Pacificare might have been one of them. Its been a couple of years.

 

[whitestick]

Allow me to hijack for a moment and ask another newbie question about the health insurance. I and DW currently have group coverage at Megacorps, respectively. They both "allow" us to continue our coverage, albeit paying for the full share, of which they claim they have been paying 80%.
Question is, do we continue to have to re-enroll each year after we have made the initial selection to continue with them. They typically haven't given much time from notice to close, and if we will be on the road travelling, I'm concerned that we may miss the open enrollement one year, and lose the coverage. I know that is the way that it works while we are working, albeit rather then losing coverage, it just defaults to the plan they prefer, rather then the one we want (better coverage, lower deductibles, etc.)
Our concern stems from we both have a number of pre-existing conditions, and would not want to have to get into the high risk pools, if we can help it.
Thanks.
If the answer is "it depends on the company" then so be it, I thought maybe others have a common experience or there might be a standard way it's done.

 

[kramer]

Allow me to hijack for a moment and ask another newbie question about the health insurance. I and DW currently have group coverage at Megacorps, respectively. They both "allow" us to continue our coverage, albeit paying for the full share, of which they claim they have been paying 80%.
Question is, do we continue to have to re-enroll each year after we have made the initial selection to continue with them. They typically haven't given much time from notice to close, and if we will be on the road travelling, I'm concerned that we may miss the open enrollement one year, and lose the coverage. I know that is the way that it works while we are working, albeit rather then losing coverage, it just defaults to the plan they prefer, rather then the one we want (better coverage, lower deductibles, etc.)
Our concern stems from we both have a number of pre-existing conditions, and would not want to have to get into the high risk pools, if we can help it.
Thanks.
If the answer is "it depends on the company" then so be it, I thought maybe others have a common experience or there might be a standard way it's done.

Hi Whitestick, I work for a Fortune 500 company. At my company, if you don't do anything you are automatically enrolled in the same options the following year. I think this is the way it is at most companies. Also, everything for us is all on-line, and I assume most Megacorps are like this now. We just go to a certain external web page with our username and password, and we can see all of our options. Most companies spend a lot of time educating about the options. My company had several seminars this year, and they even extended the open enrollment period a couple of weeks because they were shutting down one of the major medical insurance options and so many had to choose one of three other options.

So basically, I wouldn't worry about missing it on the road as long as you have access to email. But, it is important to really pay attention. When the notice goes out, plan to take some time to really study your options. Don't be like I used to be, and mostly ignore it until the last minute, and not put a lot of thought into my choices. I mean why should I spend a lot of time on it -- health care is free since somebody else is paying, right?

Also, perhaps you can contact HR and find out the exact dates in advance if you are going on a particularly long business trip, for instance.

Kramer

ps: The other thing that struck me about this year's open enrollment was all the whining about having to actually pay anything out-of-pocket as co-pays for their own health care. These co-workers are people making more than the average General Practicioner physician in the US. I almost couldn't take it.

 

[Martha]

Credit history doesn't matter. If you pay your premiums, you are covered. As soon as you stop, the policy will lapse.

From what I have read, health insurers currently profess not to be checking credit as part of their underwriting process. However, most health insurers keep their underwriting guidelines as a trade secret. I haven't looked at the fair credit reporting act for some time, but I know there are requirement to inform someone if they are denied a product due to bad credit, I don't recall if they have to inform someone if they are charged a different rate based on their credit history. If they aren't checking credit histories now, they may be in the future as that seems to be a trend in the insurance industry.

I have read that most auto insurers are now checking credit histories.

There does seem to be a correlation between auto insurance and homeowner's insurance claims and poor credit history.

 

[cute fuzzy bunny]

There does seem to be a correlation between auto insurance and homeowner's insurance claims and poor credit history.

There is a very strong correlation. As we noted in another thread, people that make bad decisions seem to make a trend out of it.

California disallows the practice, but my insurer was easily able to tell me my credit history and score, and wouldnt you know it? Right after he saw how good it was he said "You know, we have this higher level of insurance only for low risk clients...its very hard to qualify for but the premiums are lower and the coverage levels are higher..."

Hmm...

 

[mykidslovedogs]

As far as health insurance goes in Colorado, I have never seen anyone get denied because of credit history. On the other hand, I think it's different in the property and casualty insurance market. If you are self employed and you are purchasing "group of one" health insurance, or if you are an employer, they do check to make sure that your income is enough to cover the premiums.

As far as open enrollment goes, I just met with a person who was a teacher, and she had forgotten to give a forwarding address when she moved after retirement. She did not get her retirement benefit notice, and she failed to sign up. Unfortunately, the school district is now disallowing her to ever sign up for the retirement benefit since she missed the deadline. I don't know how it is with open enrollment retirment benefits after you sign up. I primarily deal with small groups that don't offer retirement benefits. My parents get a packet each year for their "open enrollment" period. They always reveiew it and make changes. Also, if the company you worked for in the past changes to a different carrier, it is possible that you will have to fill out some paperwork, even in retirement, during the enrollment period. Therefore, I would always make sure that you can retrieve important mail, even if you are travelling. Perhaps, you can ask a relative to collect your mail?

 

[kramer]

Whitestick, Sorry, I see that I misunderstood your post -- I thought you meant that you were traveling on business and worried about missing the open enrollment period, but I think you mean that you will be retired and are worried about missing updates. I bet this is very individual by company and maybe you should talk to your companies' HR departments.

Obviously, everything on-line would be the best solution. Having a reliable relative sort mail could definitely work out. There are mail forwarding services that scan in the envelopes you receive in mail and you can select which ones are forwarded, etc. I think relative plus on-line would be the best solution. Maybe HR will provide you with an 800 number you could call from anywhere and they will pre-warn you on the dates, too.

Kramer