Do research before leaving group health insurance
09 01 08 - 11:45
By JANE GLENN HAAS
The Orange County Register
If you are too young for Medicare but considering leaving a job that offers group health insurance, it pays to do some research.
After a yearlong investigation, Consumer Reports concludes 89 percent of the people under 65 who look for individual health insurance do not buy it because it is too costly, because they are turned down for health reasons, or because benefits are inadequate.
"Private insurance is virtually out of the question for 76 percent of uninsured Americans - and those who do have insurance told us wrenching stories about the high costs and poor coverage they receive," says Nancy Metcalf, health editor at Consumer Reports.
She calls searching for private insurance "daunting" and a challenge to any adult who hopes to retire early, loses a job, is self-employed or has an adult child leaving a group plan.
"The nature of health insurance is that the only people profitably to insure are those who are healthy," Metcalf says. "Think about homeowner's insurance. We pay it annually but 99.9 percent of us never make a claim."
Question: Why can a person get coverage in one state but may not qualify in another?
Answer: The insurance industry is regulated on a state-by-state basis. There is no uniformity. There are enormous differences in disqualifying medical conditions.
Q: You cite PacificCare, which may exclude anyone who takes prescription medications for high blood pressure, acid reflux, asthma, migraines, arthritis. Aetna won't insure anyone who's had a hip or knee replacement. Other insurers have equally onerous health hurdles. Some of those conditions are tough to avoid after 50. What alternatives do we have?
A: It is very shocking to a lot of people. There is no good answer for the way the individual insurance system works today. People just don't realize they are only paying 25 percent or 30 percent of the premium when they have group insurance. Consumer Reports found that the median out-of-pocket medical expenses for the last 12 months were $2,264 for those with individual insurance vs. $973 for those with employer-based plans.
Q: You have many tales of insurance woe in your article. What's an individual to do?
A: Start by going to www.healthinsuranceinfo.net to check out coverage in your state. You really need to be careful leaving a group plan. There is a little window for coverage.
The federal Health Insurance Portability and Accountability Act (HIPPA) provides some protection if you are switching from job-based group coverage to an individual plan even if you have a medical condition that could preclude insurance.
But to exercise your HIPPA rights, you first have to exhaust all job-based coverage available, including COBRA, which allows you to continue in your employer's plan for 18 months by paying the full cost plus 2 percent.
HIPPA is like a get-out-of-jail-free card for people with pre-existing conditions. But you must apply for individual coverage within 63 days after your old coverage ends.
Every state has to make sure there is at least one policy available to you if you meet these conditions.
Q: Other suggestions?
A: Know your state laws. Be careful leaving a plan. Research the market. Get adequate benefits. Look beyond the premium at the "hidden" costs; and keep looking. If you can't pass medical underwriting, there are other possible options, such as high-risk pools in 34 states.
Q: What are other ways people can educate themselves?
A: Go to www.consumerreports.org/health for unbiased comparisons and www.eHealthInsurance.com links to hundreds of insurance plans across the country.
Q: And good luck?
A: Yes.