Questions for ERs with individual health insurance

[mark500]

Scenario:

I give my 90 days notice to my employer that has group health insurance. One month after I quit, I am diagnosed with leukemia.
I use COBRA law to maintain coverage for 18 months.
During those 18 months, I must find an individual health insurance policy.
I cannot find coverage without permanent exclusion for leukemia, or the premiums are unaffordable.

To prevent this possibility, wouldn't it be wise to secure an individual health insurance policy before giving the 90 day notice to quit work? That way, I would be covered for the leukemia.

With individual health insurance policies, how often do the insurers raise the premiums with age and/or claims related to serious diseases? As I understand it, individual health insurance policies do not have as much protection from premium increases as do group plans.

 

[REWahoo]

I give my 90 days notice to my employer that has group health insurance. One month after I quit, I am diagnosed with leukemia.
I use COBRA law to maintain coverage for 18 months.
During those 18 months, I must find an individual health insurance policy.
I cannot find coverage without permanent exclusion for leukemia, or the premiums are unaffordable.

Does your state have a health insurance risk pool you could use in this event? Many states do and the rates are high but not astronomical (my state's rates are 2X the "standard" premium).

Georgetown University runs a very good website on health insurance options.

To prevent this possibility, wouldn't it be wise to secure an individual health insurance policy before giving the 90 day notice to quit work? That way, I would be covered for the leukemia.

I had the same thought and applied for individual policies for DW and I just prior to retiring. Because we hadn't exhausted COBRA, we were offered coverage but with several exclusions due to what the underwriters considered pre existing conditions. We weren't willing to do that and opted for COBRA.

With individual health insurance policies, how often do the insurers raise the premiums with age and/or claims related to serious diseases? As I understand it, individual health insurance policies do not have as much protection from premium increases as do group plans.

The Georgetown website can give you specifics, but as I understand it you cannot be singled out for rate increases based on claims/serious diseases once you get coverage. Generally, your premiums may be increased whenever you renew the policy (usually annually), but increases must be applied to all persons in your class and not on an individual basis. A class may be grouped by age, sex, or by each individual health plan product.

 

[Martha]

Scenario:

I give my 90 days notice to my employer that has group health insurance. One month after I quit, I am diagnosed with leukemia.
I use COBRA law to maintain coverage for 18 months.
During those 18 months, I must find an individual health insurance policy.
I cannot find coverage without permanent exclusion for leukemia, or the premiums are unaffordable.

To prevent this possibility, wouldn't it be wise to secure an individual health insurance policy before giving the 90 day notice to quit work? That way, I would be covered for the leukemia.

That is what Dog51 did. Makes some sense if you are perfectly healthy and thus can get an affordable individual policy.

With individual health insurance policies, how often do the insurers raise the premiums with age and/or claims related to serious diseases? As I understand it, individual health insurance policies do not have as much protection from premium increases as do group plans.

Federal law (HIPAA)requires guaranteed renewability of individual health plans (though the insurer can cancel the plan for everyone). However, HIPAA is silent on premium increases. A number of states allow insurers in the individual market to increase rates based on claims or the age of covered individuals. Other states require community rating of health insurance premiums. In those states no policyholder can be charged more than any other based on health status, health history, or other risk factors. Other states require modified community rating with adjustments permitted for age, but not health status. Yet other states impose rating bands that limit how much premiums can vary based on health status, age, and other factors.

So it depends where you live.

 

[perinova]

Martha - I think you are absolutely right you can keep your policy but your premium will increase just as the employer health insurance increases premium to the company based on actual results, and just as your car insurance after an accident.
In fact: won't your premium increase to the level of a high risk pool?

If this is right: Don't worry you WILL pay high premium no matter what. Get your "healthy" individual insurance as soon as possible. It will be cheaper than COBRA. And use this insurance as long as you are healthy.

In states where you insurances can't deny or adjust premiums based on health conditions everyone pays "high risk" premium (welcome to NJ ~$1000/month for a $10000 deductible familly insurance for everyone. Those laws seemed good at the onset but since healthy individuals stopped getting insurance...
Mandatory insurance to solve this problem in Mass.?

perinova

 

[mark500]

Hmm.

If you have no pre-existing conditions, it is probably a bad idea to use COBRA .

During those 18 months you (or anyone in your family) could develp a serious "excludable" illness, and you might not be able to secure a low base rate for an individual health insurance policy.

 

[Rich_by_the_Bay]

Sorry to learn of your misfortune. I work in a cancer hospital and your story is not rare. You have an expensive disease; there is lots of hope but you will need your insurance.

Given the virtual impossibility of obtaining any policy that requires underwriting under these circumstances, if you have an opportunity to find acceptable employment that offers decent group health I would grab it. Use COBRA to buy some time for that purpose if necessary.

The bright side is that having obtained FIRE, you don't need to be that concerned with the compensation of a new temporary job, just the health insurance.

Good luck with all you challenges.

 

[farmerEd]

Sorry to learn of your misfortune. I work in a cancer hospital and your story is not rare. You have an expensive disease; there is lots of hope but you will need your insurance.

Good luck with all you challenges.

I am pretty sure the OP was laying out a "what-if" scenario...I don't think he said he actually has cancer

 

[mark500]

It was a "what if" scenario. Thanks for the compassion, but I don't have leukemia or something else bad...yet.

 

[dory36]

I had private insurance in place before I pulled the plug on my last job. Seemed prudent, and only cost me a couple of months of premiums for overlapping coverage.

 

[TromboneAl]

The question is: should I set up the new insurance as soon as possible in case I come down with some new disease?

The answer is yes. As Dory pointed out, your cost is a few months of extra coverage. The benefit is that if you get some new disease, you'll be covered.

The chances that you get some new disease are pretty slim, but if it happens, and you didn't change your coverage, you'll feel very very bad.

Of course, if you take this idea to the extreme, you should get coverage years before you need it. So, you just need to balance the cost and benefit.

 

[Jane_Doe]

Mark 500-

I got separate policies from Blue Cross/Blue Shield, for each of our family - me, DH, and two kids - they are 17 & 20. That way they can't be cancelled out after they leave the nest, God forbid they need it. It worked out cheaper for DH and I to have separate policies, but we each have 2500 deductables to meet so you have to compare that as well.

Something interesting to note that I didn't used to realise - Our coverage never covered well visits - only serious ailments. However, when the dr.'s ofc submits a claim, the ins company doesn't pay it, but miraculously the amount billed by the dr. goes down much lower. Don't understand the system, but I know it "pays" to submit everything, and then pay any medical bills after the adjustment. Even if you are not "covered" - it almost always is much lower. That just isn't right - Why do they have to play that game?

Anyone else run across this, too?

Jane

 

[Martha]

Yup. That is the way it is. Always submit the bills to the insurer to get the negotatied rates.

 

[perinova]

For those who would consider moving for a cheaper health insurance
Breakdown of insurance cost by State for family coverage:

cheap states under $400 /mo (at least $100 cheaper than US average)
AR AZ DC IL IA KY MI MO NE NV NM ND OH OR PA=best TX UT WI

expensive states $700 /mo and above (at least $100 more than US average)
AK ME MA NJ=worse NY VT

average cost states $500-$600 /mo well... the others

 

[REWahoo]

pernovia,

What's the source for the information? Not contesting the accuracy, just want to know where it came from.

 

[perinova]

Sorry I should have done that
Information came from Book (2006) from Paul Zane Pilzer.
There is a table there on pages 244 245.
The data gives the exact cost for each state. There is also cost data for individuals and for HSA coverage.
AND I just FOUND OUT: The author has put all the detailed data at
www.TNHIS.com/** (just include **=your state's abbreviation) 8)

 

[KB]

Blue Cross/Blue Shield providers have a contract with the plan (BC or BS) to bill the subscriber for a negotiated rate or a rate from a fee schedule. The difference between the negotiated rate/fee schedule (also called the allowed amount) and the billed amount must be written off by the BC/BS plan.

That is part of the provider contract. Hope I explained that clearly.
I spent 22 years working for a Blue Shield plan.

 

[youbet]

Blue Cross/Blue Shield providers have a contract with the plan (BC or BS) to bill the subscriber for a negotiated rate or a rate from a fee schedule.  The difference between the negotiated rate/fee schedule (also called the allowed amount) and the billed amount must be written off by the BC/BS plan.

KB..... Didn't you mean that the difference between the negotiated rate/fee and the billed amount must be written off by the provider.......not by BC/BS?

 

[tryan]

COBRA law to maintain coverage for 18 months

That was the second reason we skipped COBRA. Any life long illness found in any of us during the 18 months would have ended my retirement.

Even overlapped the work plan with the individual plan (BC/BS) by 1 month.

 

[TromboneAl]

Is that a good book? Did it save you anything?

 

[tryan]

yes ... that was the first reason I opted out of COBRA.

BC/BS with a pregnancy exemption and claiming non-smoker was a little more than 1/2 my COBRA payment.

 

[audreyh1]

Another reason to get individual health insurance quickly and avoid COBRA is because COBRA coverage is usually expensive since it is a low (or no) deductible plan with very comprehensive coverage.

But really, getting individual coverage before a nasty pre-existing condition shows up is very, very wise.

Audrey

 

[Rich_by_the_Bay]

Another reason to get individual health insurance quickly and avoid COBRA is because COBRA coverage is usually expensive since it is a low (or no) deductible plan with very comprehensive coverage.

Really? I thought it was 18 months continuation of your policy from employment plus a few extra percent premium for administrative reasons. So what you get is basically what you had, on your nickel.

Was I misinformed?

 

[perinova]

I was offered COBRA before (I declined: too expensive).

It is basically the same plan as during employment, same deductible etc.
The cost (premium) is the same as during employment (give or take a small admin. cost? I am not sure of that). The whole employer paid portion being now passed on the former employee.

audreyh1 may have meant that her employer plan is/was an HMO kind of plan with no deductible?

 

[Papi]

Another reason to get individual health insurance quickly and avoid COBRA is because COBRA coverage is usually expensive since it is a low (or no) deductible plan with very comprehensive coverage.

But really, getting individual coverage before a nasty pre-existing condition shows up is very, very wise.

Audrey

Hi Audrey,

When you say "before", how long "before" do you mean?  I plan on ERing in 5 years.  Do I get individual coverage today, in 2 years, 4.5 years, 5 years, etc?  How do you figure out when you should get individual coverage?

Thanks!

 

[Martha]

Papi, the answer to your question is a big "it depends."

Things to look at:

*How much does an individual policy cost which provides the coverage you want?
*How much does your policy at work cost? Are you going to drop that policy?
*Does your state allow insurance companies to raise your premiums in the future based on your health/claims? Based on age?
*How does your state deal with HIPAA rights? Does it allow you to move from your group policy to an individual policy with no underwriting? Does it have a risk pool? Or does your state allow insurance companies to price the individual policy at whatever amount they chose?

As I stated above:

Federal law (HIPAA)requires guaranteed renewability of individual health plans (though the insurer can cancel the plan for everyone). However, HIPAA is silent on premium increases. A number of states allow insurers in the individual market to increase rates based on claims or the age of covered individuals. Other states require community rating of health insurance premiums. In those states no policyholder can be charged more than any other based on health status, health history, or other risk factors. Other states require modified community rating with adjustments permitted for age, but not health status. Yet other states impose rating bands that limit how much premiums can vary based on health status, age, and other factors.


So if you are healthy, in a place where individual insurance isn't too pricey, and your state prohibits raising rates based on your health or claims, it might make sense to buy an individual policy sooner rather than later.