Leaving COBRA before 18 months affects pre-existing conditions exclusions?

[John Galt III]

Hi,

I am in Pa. I have separated from my employer and am COBRA eligible. The literature they sent me indicated that if I were to drop COBRA before the 18 month maximum allowed, and went on individual health insurance, the indiv health ins co could exclude coverage for any pre-existing conditions.

But can't an insurance company exclude pre-existing, and/or increase the rate anyway, for individuals? As I understand it, whenever I apply for private health insurance, on or off COBRA, or just moving from one ins co to another, the new ins co can exclude pre-existing conditions, or charge a higher premium because of them.

Here is the sentence : "Second, you will lose the guaranteed right to purchase individual health insurance policies that do not impose such pre-existing condition exclusion if you do not get continuation coverage for the maximum time available to you"


This implies that now, in the early COBRA window ( I haven't signed up for it yet, and am still before the 3/1/2013 enrollment deadline) I have a right to purchase an individual health insurance policy that does not impose a pre-existing condition exclusion. OK, but it probably would be very expensive, no?


Thanks for any insight !

[gerrym51]

Quote:

Originally Posted by John Galt III Hi, I am in Pa. I have separated from my employer and am COBRA eligible. The literature they sent me indicated that if I were to drop COBRA before the 18 month maximum allowed, and went on individual health insurance, the indiv health ins co could exclude coverage for any pre-existing conditions. But can't an insurance company exclude pre-existing, and/or increase the rate anyway, for individuals? As I understand it, whenever I apply for private health insurance, on or off COBRA, or just moving from one ins co to another, the new ins co can exclude pre-existing conditions, or charge a higher premium because of them. Here is the sentence : "Second, you will lose the guaranteed right to purchase individual health insurance policies that do not impose such pre-existing condition exclusion if you do not get continuation coverage for the maximum time available to you" This implies that now, in the early COBRA window ( I haven't signed up for it yet, and am still before the 3/1/2013 enrollment deadline) I have a right to purchase an individual health insurance policy that does not impose a pre-existing condition exclusion. OK, but it probably would be very expensive, no? Thanks for any insight !

i am not an expert but if you are going to do it buy the new coverage than stop paying cobra bill

[DallasGuy]

Here is the sentence : "Second, you will lose the guaranteed right to purchase individual health insurance policies that do not impose such pre-existing condition exclusion if you do not get continuation coverage for the maximum time available to you"

I'm guessing that this is referring to any coverage you might get from another employer that does not impose pre-existing condition exclusions.

As far as I know whenever you apply for an individual health insurance policy, the health insurance company always has the right to exclude some coverages based on pre-existing conditions.

Having said that, if Obamacare stays as it is currently, starting in Jan 2014 companies on the individual health insurance market can't exclude coverage based on pre-existing conditions.

Anyone else, please correct me if I'm wrong on this.

[Animorph]

By 2014 you should be able to do what you want. The COBRA language is almost outdated. On the other hand, it may be beneficial to get individual health insurance in 2013. It could be cheaper, and might continue to save you some in 2014.

[rbmrtn]

I think that is part of the HIPAA law. If you take COBRA and exhaust it you are then eligible to purchase a "HIPAA qualified" plan. That varies from state to state, many have a state insurance pool, or some policy provided by an insurer. I found it is pretty much impossible to purchase individual HI, even if you have no conditions, over 50. It was easier to go COBRA then state risk pool.

This should all be moot point in 2014.

[MichaelB]

Under HIPAA regulation if you cease continuous coverage for more than 63 days a new policy can exclude coverage for pre-existing conditions for up to 12 months. As long as you get new coverage within the 63 day period HIPAA guarantees portability regardless of pre-existing conditions.

It does not guarantee an insurance company will issue an individual policy, nor does it guarantee an issued policy will not be cancelled. The safest bet is to take the Cobra option, which continues the same policy you had under your previous employer, and change once you have been accepted under a new policy.

Beginning Jan 1 of next year standardized policies will be available in each state that guarantee coverage for individuals regardless of circumstance.

[gerrym51]

Quote:

Originally Posted by MichaelB Under HIPAA regulation if you cease continuous coverage for more than 63 days a new policy can exclude coverage for pre-existing conditions for up to 12 months. As long as you get new coverage within the 63 day period HIPAA guarantees portability regardless of pre-existing conditions. It does not guarantee an insurance company will issue an individual policy, nor does it guarantee an issued policy will not be cancelled. The safest bet is to take the Cobra option, which continues the same policy you had under your previous employer, and change once you have been accepted under a new policy. Beginning Jan 1 of next year standardized policies will be available in each state that guarantee coverage for individuals regardless of circumstance.

i live in mass. which already has a from of obamacare.

here is how cobra and new insurance works. if you are on cobra and it exhaussts or you decide to go on other insurance you can go on private insurance -however-open enrollment is july 1to august 15th. in this time period no questions asked about prior insurance coverage.

if cobra not taken or dropped at other times of year you must furnish proof that you had insurance within 62 days of buying and they can do some exclusions for awhile- i'm not sure of exact rules as far as that.

i know this because i am timing my retirement to have my cobra coverage expire within the july 1 to august 15th window

[MichaelB]

Quote:

Originally Posted by gerrym51 i live in mass. which already has a from of obamacare. here is how cobra and new insurance works. if you are on cobra and it exhaussts or you decide to go on other insurance you can go on private insurance -however-open enrollment is july 1to august 15th. in this time period no questions asked about prior insurance coverage. if cobra not taken or dropped at other times of year you must furnish proof that you had insurance within 62 days of buying and they can do some exclusions for awhile- i'm not sure of exact rules as far as that. i know this because i am timing my retirement to have my cobra coverage expire within the july 1 to august 15th window

That's helpful, thanks. From what I've read the state exchanges will work in a similar fashion. A once a year enrollment window, and outside that window one needs to have current coverage to automatically get new and full coverage.

[John Galt III]

OK, 2014, here we come!

But seriously, I called the company that administers the Cobra that I am on, and they did not know what that sentence meant !! They referred me to the Dept of Labor (gave me the correct 800 number) and the Dept of Labor did confirm that the sentence means that if I switch from Cobra to private individual HI before month 18, then the private HI co can exclude pre-existing conditions, but, as someone else pointed out, they can already do that, anyway, so what's the big deal?

I went to a State Farm agent's office today, and he suggested I apply for a Capital Blue Cross hdhp $5,000 ded policy, ( I found it on eHealthInsurance and showed it to him. He can't issue it to me) which was listed at $173 per mo, before underwriting. He said the policy premium only goes up about 10 to 15 % after underwriting, if at all. He also mentioned that all insurance companies, even Blue Cross, whom he said was reputable, will sometimes wait to do a thorough check of the med history until you make a claim, then say you had a pre-existing condition, and not pay the claim, cancel your policy, refund your premiums. So there is some danger in taking the less expensive way!

I might go ahead and apply for this $173 per month policy. I would then, if accepted, keep it until 2014, and go on Obamacare, in which my premiums would be even lower, for better coverage, unless the law changes.

[rbmrtn]

If you are already on COBRA why would you risk dealing with an insurance company. Even if they didn't reject out right, as soon as you needed it they will go back and find something to disqualify/reject your claim.

[gerrym51]

Quote:

Originally Posted by rbmrtn If you are already on COBRA why would you risk dealing with an insurance company. Even if they didn't reject out right, as soon as you needed it they will go back and find something to disqualify/reject your claim.

cobra is not cheap. 102 percent of a companies cost. for example when i start cobra to keep the plan i have now will cost me 500 dollars per month just for me.

the thing that all of you have to understand that obamacare is romneycare IN ALL WAYS.

there are no cheap insurance plans under obamacare or romneycare.

it will cost me under mass romneycare about 500 dollars per month just like my cobra-however i will have a 2500 dollar deductible on top of that not the 750 deductible under cobra.

[John Galt III]

Quote:

Originally Posted by rbmrtn If you are already on COBRA why would you risk dealing with an insurance company. Even if they didn't reject out right, as soon as you needed it they will go back and find something to disqualify/reject your claim.

rbmrtn,

I'm not on COBRA yet. But I am considering it. It would cost $420 a month for medical and dental. A good medical, with no deductible, $2,100 max out of pocket, $25 copays, and 11% coinsurance. Not bad at all. But I'll probably never use it!! The truth is, I was all psyched to sign up for Cobra when I was planning my escape from the world of work, and $420 a month sounded reasonable, but now that it's time to write the check every month it feels different. Especially since I will never even use it (I hope).


I get an even split of people telling me to go on Cobra vs going with the cheaper route. As usual I must roll the dice myself and live with the results (as we all do).

Seven years ago, I was offered Cobra, declined it, and went without any HI for 12 months. No problems, luckily.

Not an easy decision for me, now that the time has arrived.

[gerrym51]

Quote:

Originally Posted by John Galt III rbmrtn, I'm not on COBRA yet. But I am considering it. It would cost $420 a month for medical and dental. A good medical, with no deductible, $2,100 max out of pocket, $25 copays, and 11% coinsurance. Not bad at all. But I'll probably never use it!! The truth is, I was all psyched to sign up for Cobra when I was planning my escape from the world of work, and $420 a month sounded reasonable, but now that it's time to write the check every month it feels different. Especially since I will never even use it (I hope). I get an even split of people telling me to go on Cobra vs going with the cheaper route. As usual I must roll the dice myself and live with the results (as we all do). Seven years ago, I was offered Cobra, declined it, and went without any HI for 12 months. No problems, luckily. Not an easy decision for me, now that the time has arrived.

in the world of obamacare/romneycare you will have no choice. you must buy insurance or be penalized by irs. in mass we have to supply proof every year for insurance. we get sent a form from insurance company to supply

[John Galt III]

Quote:

Originally Posted by gerrym51 cobra is not cheap. 102 percent of a companies cost. for example when i start cobra to keep the plan i have now will cost me 500 dollars per month just for me. the thing that all of you have to understand that obamacare is romneycare IN ALL WAYS. there are no cheap insurance plans under obamacare or romneycare. it will cost me under mass romneycare about 500 dollars per month just like my cobra-however i will have a 2500 dollar deductible on top of that not the 750 deductible under cobra.

Gerrym,

If your premiums are $500 a month under Romney care, you must have a fairly impressive annual income. My income will be nice and low in 2014, probably under $12,000. I checked on the Kaiser website, and it indicated I would be eligible for Medicaid at minimal monthly cost, probably less than $100 per month !!

[gerrym51]

Quote:

Originally Posted by John Galt III Gerrym, If your premiums are $500 a month under Romney care, you must have a fairly impressive annual income. My income will be nice and low in 2014, probably under $12,000. I checked on the Kaiser website, and it indicated I would be eligible for Medicaid at minimal monthly cost, probably less than $100 per month !!

i am over the maximum . i don't know about obamacare but all sources of income are included in mass.

[growing_older]

Quote:

He also mentioned that all insurance companies... will sometimes wait to do a thorough check of the med history until you make a claim, then say you had a pre-existing condition, and not pay the claim, cancel your policy, refund your premiums.

This retroactive un-insurance scares me the most about this system. How can one protect against losing your insurance at the point that you actually need it.

[gerrym51]

Quote:

Originally Posted by growing_older This retroactive un-insurance scares me the most about this system. How can one protect against losing your insurance at the point that you actually need it.

thi will no longer happen under obamacare-but the policies will be much higher priced.

[rbmrtn]

I'm sure it varies a lot by state. My state risk pool was cheaper than COBRA and last employers policy. Very few people over 50 can actually purchase an individual plan and those do are uprated substantially. The cost of HI is just part of the price of getting off the wheel early. I know many that are stuck in a job they don't want, for money they don't need, just to maintain access to HI. In 2014 that should change.

[MichaelB]

Quote:

Originally Posted by John Galt III Gerrym, If your premiums are $500 a month under Romney care, you must have a fairly impressive annual income. My income will be nice and low in 2014, probably under $12,000. I checked on the Kaiser website, and it indicated I would be eligible for Medicaid at minimal monthly cost, probably less than $100 per month !!

AFAIK Pennsylvania has not yet indicated it will implement the Medicaid expansion.

[obgyn65]

This is my understanding also.

Quote:

Originally Posted by DallasGuy Having said that, if Obamacare stays as it is currently, starting in Jan 2014 companies on the individual health insurance market can't exclude coverage based on pre-existing conditions. Anyone else, please correct me if I'm wrong on this.