If you are not familiar with the new "American Recovery and Reinvestment Act Of 2009" then you need to learn more at the U.S. Department of Labor web site. In a nutshell, this new Federal Act entitles you to a 65% reduction in your monthly COBRA continuation premium if you lost your job after September 1st, 2008. Granted it only lasts for 9 months, but it is most certainly going to help millions of American's who have lost their employer sponsored group health insurance coverage.
However, there are "strings attached," for those who earn more than $125,000 or $250,000 for married couples filing a joint federal income tax return, in that, if your income meets or exceeds these amounts, you may have to repay all or part of the premium reduction. Therefore, if you are in a higher income bracket, you may wish to consider waiving your right to the premium reduction as it may increase your income tax liability for the year. For more information on how higher income earners are affected by this Act, please refer to the March 25, 2009 Issue of Forbes Magazine.
But, what if you decide to elect COBRA? The question then becomes, "What do you do after the 9 month COBRA subsidy expires or when your COBRA runs out altogether?" Luckily, there are several lower cost alternatives to paying high priced COBRA continuation premiums. And, depending on what state you live in, there may be other health insurance options that you can select when your 9 month subsidy expires or when COBRA finally runs out at the end of 18 months. They are as follows:
- State Continuation of Coverage
- Individual Health Insurance Policy
- Small Group Health Insurance Plan
- State Risk Pool Coverage
- Defined Benefit Health Insurance Plan
Let's take a look at these alternative plans:
1. The first option is "State Continuation of Coverage." Many States offer State Continuation of Coverage. While State Continuation of Coverage does not follow Cobra continuation laws, it does allow you to continue your employer sponsored group coverage for up to 9 months even if your former employer employed less than 20 employees. This law does not apply to self-funded plans, so make sure to check with your State's Department of Insurance to see if your State mandates State Continuation of Coverage.
2. The second option, an "Individual Health Insurance Policy" is typically the best and most affordable alternative for relatively healthy individuals. An individual health plan can be purchased at any time and is a great way to maintain many of the same kinds of benefits that you had through your former employer's sponsored group health plan.
However, an Individual Health Insurance policy has to be "underwritten" before it is issued. During the "underwriting" process, the insurance company scrutinizes the applicant's health history to determine if it will extend an offer for insurance coverage. This process allows the insurance company to "decline" coverage to applicants with serious pre-existing or chronic medical conditions or to modify the coverage it extends to the applicant.
Today, the "Individual" health insurance market has become quite competitive; therefore, many insurance carriers are willing to offer health insurance coverage to individuals with certain controlled pre-existing medical conditions, like high blood pressure or high cholesterol.
Other times, the insurance company will offer the applicant coverage, but will refuse to cover a specific body part or pre-existing condition. In these cases, the insurance company issues what is known as an "exclusion rider." An exclusion rider is a way for the insurance company to exclude coverage for a specific body part or a specific medical condition (e.g. right knee, uterine fibroids). Exclusion riders can be permanent (body part or condition excluded coverage for the life of policy) or temporary, (body part or condition excluded coverage for a specific period of time.)
Often, if an exclusion rider is placed on a body part and the insured receives no further treatment on that body part or if the rider is in place to exclude a pre-existing medical condition and the insured's condition completely resolves, the policyholder can request that the insurance company remove the exclusion rider from the policy. Typically, requests to remove a rider can be made after one or two years. Ultimately, the insurance company will makes the final decision on whether the exclusion rider will be removed.
A HSA qualified HDHP (Health Savings Account qualified High Deductible Health Plan) may offer a more affordable consumer-driven healthcare option to individuals that are searching for a health plan with very low monthly premiums. Typically, these plans offer policyholders greater flexibility and control in where their health care dollars are spent. Plans often come with a fixed aggregate family deductible, which mean that a separate deductible does not have to be met for each family member on the plan.
In addition to the significant cost savings, policyholders can fund their Health Savings Account (HSA) to pay for routine medical expenses or alternative medical therapies, like acupuncture. Any money in the HSA that is not used for medical expenses can be rolled over to the next year and excess funds can be transferred to a tax deductible, tax deferred, interest bearing account, commonly referred to as a "Medical IRA." These types of health plans can offer tremendous tax advantages to policyholders. Not only can policyholders save money on their health insurance premiums, but they also can use this savings to build a nest egg for retirement. Many HSA administrators now offer thousands of no load mutual funds to transfer your HSA funds into so you can potentially earn an even higher rate of interest.
For more information on HSA qualified HDHPs, click here.
3. The third option is a "Small Group Health Insurance Plan." This type of plan can be purchased immediately and might just be what the doctor ordered for those individuals that that have been "declined" coverage for an "Individual" health plan. It might also be another option for individuals who are looking for coverage without an "exclusion rider" on a pre-existing medical condition because group health insurance provides "guaranteed insurability," which means that all applicants and their families will receive health insurance coverage for all pre-existing medical conditions.
Because recent layoffs and a tough job market have created opportunities for many professionals thinking about starting their own business, here are a few things to keep in mind when considering group health insurance coverage. Typically, a company must have a minimum of two employees. Insurance companies typically allow husband and wife to enroll separately so the two-employee minimum can be met. The company must have a Federal Tax ID number, which means that sole proprietors, will have to incorporate, unless they have an existing business with a Federal Tax ID. To qualify for a small group plan, at least two of the employees on the plan must work a minimum of 30 hours per week and must receive a wage for the 30 hours worked.
On a Small Group Health Insurance plan, a large portion of the monthly premiums are determined by the health status of those individuals participating in the plan. Even if only one individual has a serious medical condition, that individual's condition is likely to adversely affect everyone's health insurance premiums. This means that even healthy group participants will pay a higher monthly premium. It may also mean that premiums can increase dramatically (up to 300% higher or more depending on your State) if someone covered on the group plan develops a serious condition or if an individual with a serious medical condition is hired at a later date.
This is important to keep in mind if your business is likely to grow, as your insurance contract may require you to offer new employees health insurance benefits and also require the corporation to pay a portion of your employees health insurance premiums.
The main advantage of a Small Group Health Insurance Plan is that it provides seamless continuation of coverage for those individuals who have pre-existing conditions such as Diabetes or Cancer providing that they have a minimum of 18 months of prior continuous health insurance coverage with no lapse in coverage of more than 63 days.
4. The forth option is a "State Insurance Risk Pool." This option is primarily for individuals who have serious medical conditions and who have been "declined" individual health insurance coverage. Many states, but not all, provide individuals with pre-existing conditions the opportunity to obtain seamless continuation of health insurance coverage after their COBRA continuation expires, or if they lost their employer sponsored group coverage due to a policy cancellation and they were unable to obtain an individual health insurance policy on the open market because of their pre-existing conditions.
State Insurance Risk Pools often offer immediate coverage to individuals that would normally render someone "uninsurable" on the individual health insurance market. To qualify for a State Insurance Risk Pool, applicants have to show "proof of credible coverage" for a minimum of 18 months prior to application, with no lapse in coverage of more than 63 days. Although Risk Pool coverage is also available to those who have been "declined" coverage on an Individual Health Insurance policy, there is usually a 6 or 12 months waiting period before preexisting conditions will be covered if the applicant fails to show "proof of credible coverage." To find if your state has a State High Risk Insurance Pool, click here.
5. A fifth alternative, recently advertised on the Fox News Channel is now available. It is a known as a "Defined Benefit Health Insurance Plan." These affordable policies can be purchased at any time and are issued on an individual basis regardless of health history, which means they can be a unique option for individuals that have been "declined" individual health insurance coverage.However, these policies should be considered last, because coverage is limited and they are not designed to act as a comprehensive major medical plan. Although these policies offer limited benefits, they do offer an unlimited surgical benefit, therefore, they can be a financial lifesaver for anyone who is in need of surgical treatment for a pre-existing condition and might be exploring lower cost surgical options oversees. In addition, these plans also offer up to $1,000 a day for hospital coverage lasting up to 100 days. Outpatient doctor office visits & Labs.
Fortunately, these plans are HIPPA qualified, which means that all pre-existing conditions will be covered from day one, providing that the insured has "proof of credible coverage." Again, "credible coverage" is defined as health insurance coverage that has been in place for a minimum of 18 months prior to application, with no lapse in coverage for more than 63 days. To learn more about "Defined Benefit" health insurance plans, click here.
In all cases, Individuals should keep in mind when deciding whether to continue their health insurance coverage under COBRA that they will continue to pay for a health plan that was designed and purchased by someone else; specifically, their former employer. In addition, great portions of the COBRA premiums they pay are dependant, and will continue to be dependant, on the health status of their former employer's group.
Since the majority of employer sponsored group health plans have a low deductible, monthly COBRA premiums will be significantly higher. Therefore, it is prudent for anyone considering COBRA continuation coverage to explore all of their health insurance options, especially an "Individual" Health Insurance Policy.
This is especially true if one is healthy and rarely goes to the doctor and continues a their employer sponsored group health plan that offers a $20 Copay for doctors visits and a $15 Copay for prescription medications. If these are benefits that the individual is not likely to use, they might want to think twice before selecting COBRA continuation coverage.
In fact, healthy individuals can usually reduce their COBRA premiums as much as 50% or more by purchasing an Individual Health Insurance policy with a higher deductible. Furthermore, families can experience dramatic savings and have more control over their health care expenses by purchasing an HSA qualified HDHP.
Regardless of the decision, it is important for consumers to explore all of their healthcare options prior to making a purchasing decision. Taking the time to perform your own due diligence before making a health insurance selection may not only save you money, but it may save your life.
To see a list of Frequently Asked Questions (FAQ's) relating to Health Insurance, click here.
About the author: C. Steven Tucker, is the President of Small Business Insurance Services, Inc. He is a multi-state licensed insurance broker who has been serving the Small Business community and Self-Employed for 15 years. C. Steven has served as a Subject matter expert for the Wall Street Journal and Fortune Small Business Magazine and hosts his own internet radio show, entitled, "Health Insurance 101." He is also touted for being a consumer watchdog against greedy insurance companies, insurance scams and unscrupulous agents on Twitter.
Universal Healthcare is primarily an ideology championed by the Democrats. However, contrary to popular belief, a nationalized health care system for all Americans, has never been on the agenda for President Obama. Read more about President Obama's healthcare policy here.
His agenda, instead, has always been to assist those who are rendered uninsurable and or are in need of assistance in obtaining health care coverage due to low income. Part of his plan is to expand the role of SCHIP and State Insurance Risk Pools so that those who are rendered "uninsurable" on the individual major medical market have "guaranteed insurability" through their respective State Insurance Risk Pools.
Although many states already have a State Insurance Risk Pools, some states, like Arizona do not. These states desperately need such Insurance Risk Pools and until recently, have not been able to adequately provide coverage to the "uninsurable" due to the lack of funding.
In fact, President Obama's plan is to provide more Federal funding to existing State Insurance Risk Pools to drive the premiums down. Thereby, making this option more affordable for those who cannot obtain "individual" health insurance coverage on the open market. To see if your state has an Insurance Risk Pool, click here:
In terms of Universal Healthcare for everyone in the United States, however, we must research how well "socialized medicine" has actually worked for other countries. Although proponents of a single payer system often bring up the point that it has worked flawlessly for other countries like France and Canada, the fact remains that many people living in these countries have a different perspective on how effectively their health care system is working.
For example, to see the faces and stories of Canadians who are at the mercy of Canada's Universal Healthcare system, please watch these short, but very informative video documentaries by Stewart Browning:
In fact, many Canadians hire high priced "health care brokers" to arrange medical procedures in the United States because of the terrible bureaucracy that controls health care in Canada. Quite often, we also hear the main stream media reporting on the number of uninsured in the United States.
Something that is rarely discussed, however, is who the uninsured really are. For the real facts on who make up the 47 million uninsured, please watch:
"Before turning to government as the solution, some unheralded facts about America's health care system should be considered," says Scott W. Atlas, a senior fellow at the Hoover Institution and a professor at the Stanford University Medical Center.
Americans have a better survival rates than Europeans for common cancers:
- Breast cancer mortality is 52 percent higher in Germany than in the United States, and 88 percent higher in the United Kingdom.
- Prostate cancer mortality is 604 percent higher in the United Kingdom and 457 percent higher in Norway.
- The mortality rate for colorectal cancer among British men and women is about 40 percent higher.
Americans have better access to treatment for chronic diseases than patients do in other developed countries: For example, 56 percent of Americans benefit by taking statins, which reduce cholesterol and protect against heart disease. By comparison, of those patients who could benefit from these drugs, only 36 percent of the Dutch, 29 percent of the Swiss, 26 percent of Germans, 23 percent of Britons and 17 percent of Italians receive them.
Lower income Americans are in better health than comparable Canadians: Twice as many American seniors with below-median incomes self-report "excellent"
health compared to Canadian seniors (11.7 percent versus 5.8 percent).
Conversely, white Canadian young adults with below-median incomes are
20 percent more likely than lower income Americans to describe their
health as "fair or poor."
Americans spend less time waiting for care than patients in Canada and the United Kingdom: Canadian
and British patients wait about twice as long -- sometimes more than a
year -- to see a specialist, to have elective surgery like hip
replacements or to get radiation treatment for cancer. Currently,
approximately 827,429 people are waiting for some type of procedure in
Canada and nearly 1.8 million people are waiting for a hospital
admission or outpatient treatment in England.
Source: Scott W. Atlas, 10 Surprising Facts About American Health Care, National Center for Policy Analysis, Brief Analysis No. 649, 3/24/09
Because of how the Single Payer System is designed, Canadian citizens have no where near the level of healthcare choices that American citizens do. As a matter of fact, until very recently (2005) it was not even possible for a Canadian citizen to pay for their own healthcare or to purchase a private health insurance policy that would "bump them up the long waiting list" to expedite their medical treatments.
Fortunately, because of a recent court ruling, some Canadian citizens have now been given the right to purchase their own private health insurance. However, access to care in Canada is still limited, and there are many hard battles yet to be fought.
Let's take a look at one brave doctor, Dr. Chaoulli,
who took his client's case all the way to the Canadian Supreme Court
and won. Dr. Chaoulli launched his legal challenge in the Canadian
court system when his client, George Zeliotis, waited more than a year
for hip-replacement surgery.
In this case, Canada's high court, who found for the Plaintiff, issued the following statement: "The
evidence in this case shows that delays in the public healthcare system
are widespread, and that, in some serious cases, patients die as a
result of waiting lists for public healthcare. The evidence also
demonstrates that the prohibition against private health insurance and
its consequence of denying people vital healthcare result in physical
and psychological suffering that meets a threshold test of seriousness."
Furthermore, Justice Marie Deschamps said, "Many
patients on non-urgent waiting lists are in pain and cannot fully enjoy
any real quality of life. The right to life and to personal
inviolability is therefore affected by the waiting times."
The Vancouver, British Columbia-based Fraser Institute which keeps track of Canadian waiting times for various medical procedures states in their 14th annual edition of "Waiting Your Turn: Hospital Waiting Lists in Canada (2006)," that, "the
total waiting time between referral from a general practitioner and
treatment, averaged across all 12 specialties and 10 provinces
surveyed, rose from 17.7 weeks in 2003 to 17.9 weeks in 2006."
Depending on which Canadian province you live in, to have an MRI you may be required a wait between 7 and 33 weeks! To have orthopedic surgery you may be required to wait 14 weeks before you can see a general practitioner to obtain a referral to the see the orthopedic surgeon and then another 24 weeks from the time you see the orthopedic surgeon to the time you actually have surgery.
So, before you jump on the Universal Healthcare bandwagon, please watch the aforementioned videos (all of them) and then spend some time reading through the real life horror stories of Canadian citizens who were left in the lurch by the Canadian healthcare system, which has been documented in a very well-researched article published in the Wall Street Journal titled "Too Old For Hip Surgery."
These videos and the WSJ article will at least give you some greater insight into what could happen when government is in total charge of controlling our healthcare and medical decisions.
If fact, if we think about it, What has our government done correctly to convince the American people that they should hand over our healthcare freedoms for them to control?
- National Debt? Two Billion dollars of interest accruing every 2 hours.
- Gas prices? 50% of every dollar at the pump goes to Washington, but, who does Washington point its fingers at when it discusses this problem?
- Katrina? American citizens held hostage in an overcrowded stadium. Buses never utilized to drive people to safety. Promises of water and food which never arrived. Parts of New Orleans still a disaster zone.
- Fannie Mae? Pseudo government entity that allows employees to still receive bonuses after its failure.
- Social security? Robbed for other expenditures. Underfunded and likely to run out of money.
- Medicaid? Robbed to pay for other expenditures. Underfunded and likely to run out of money.
- $2 trillion "Porkulus Maximus" Bill? The Bill that Congress admits they didn't read, but signed anyway.
- TARP? Billions of dollars unaccounted for because money was distributed with no oversight committee in place. Money that has a high probability of fraud. Portions still unaccounted for, even with an oversight committee.
"How will the government, once it tells 300 million people "go see the doctor pay everyone's medical bills?"
If you want to know what such a government endeavor will really cost the U.S. Tax Payer, please read the April 12, 2009 Wall Street Journal article entitled "The End of Private Health Insurance."
Real healthcare reform can be accomplished when the fraud and abuse is weeded out of our existing Federal and State entitlement programs via a legitimate needs assessment and when the quality and safety of healthcare is systematically improved.
Citizens must also do their part by becoming informed health insurance consumer and they must also learn how to become an advocate for themselves when important medical decisions are made. Additionally, American should carefully citizens the decision to trade health care choice for the temporary financial security that our government may promise.
In my opinion, we must continue to work diligently to improve our existing system and to keep the bulk of our nation's risk in the private health care sector where it belongs.
About the author: C. Steven Tucker, is the President of Small Business Insurance Services, Inc. He is a multi-state licensed insurance broker who has been serving the Small Business community and Self-Employed for 15 years. C. Steven has served as a Subject matter expert for the Wall Street Journal and Fortune Small Business Magazine and hosts his own internet radio show, entitled, "Health Insurance 101." He is also touted for being a consumer watchdog against greedy insurance companies, insurance scams and unscrupulous agents on Twitter.
I have been an insurance broker in the state of Illinois for the past 15 years and I have seen first hand what happens when an over burdened, tax funded, Government controlled, entitlement program like Medicaid is offered to those with incomes well into the middle class.
Last year, SCHIP covered about 7 million low-income children and Medicaid covered an additional 23 million. This year, 2009, the U.S House of Representatives passed the H.R.2 SCHIP Expansion Bill which adds another 6.5 million children to Medicaid.
In fact, according to U.S. Census Bureau data, 42 million children will now be eligible. The bill also allows States to receive federal reimbursement for adding more immigrant children and pregnant immigrant mothers, and removes the 5 year waiting period now required for legal immigrants to be eligible. This would enable immigrants to become eligible for health benefits the moment they get here.
Currently, the present income eligibility cap is $44,000 for a family of 4. The new bill raised the Medicaid limit to $66,000. New York will even include families who earn $88,000 and other states allow families to subtract from their income calculation what they spend on rent or mortgage or heating or food or transportation. This means that children in some families who have incomes well over $100,000 will now be eligible.
With the median U.S. household income around $50,000, 60% of U.S. households still earning less than $62,000. This means that 3 out of 5 American households will now qualify for free health care for their children. It also means that the other 2 out of 5 household will have the burden of paying for all of this!
Let's take a look to see how some of these programs are doing. Click here to read about the Medicaid "expansion" program enacted in my home State, Illinois, by our recently impeached and now infamous Democratic Governor Rod Blagojevich.
In fact, Blago was so "generous" that he expanded these Medicaid entitlement programs to include a defunct "All Kids Covered" plan, a defunct "Mom's & Babies" plan and an equally defunct "Family Care" plan.
These entitlement programs were designed to provide FREE health insurance coverage to all low income women who are currently pregnant (Mom's & Babies) and all children - here legally or ILLEGALLY (All Kids Covered) but they were also to provide FREE health insurance to all low income mothers of children who are insured under the "All Kids Covered" program (Family Care).
Now, one does not need to study actuarial science to quickly conclude that these
types of entitlement expansion programs simply can not continue to work
without massive and endless influxes of tax payer dollars. In fact, the State of Illinois is currently $1.5 Billion (yes, that's BILLION) behind in payment of claims to medical practitioners
who have already provided treatment to program recipients. Furthermore,
submitted claims by unpaid practitioners have accrued a potential
liability of $81 million in interest due to payment delays over the past 8 years.
Read more about the problems with claims payments here.
Update: As of January 2009 a moratorium has been placed on the sliding scale portion of the Illinois Family Care and the Mom's & Babies program. One can only wonder why. Could it be due to lack of funding?
Illinois had been lauded as the "Flagship" state for all others to follow regarding the expansion of the Medicaid entitlement programs. If this is the template for all others to follow, then god help us all, or at least those of us that actually fund the Medicaid system through our hard earned tax dollars.
Weighty decisions such as expanding the Medicaid system to virtually "All Kids" regardless of their actual need, simply can not be made based entirely on emotion! Prudent decision makers must weigh the desire to help all mankind against fiscal REALITY. There simply is not enough money to provide such irresponsible expansions of the Medicaid program.
This is the real reason why President Bush vetoed the SCHIP program
after the $780,000,000,000 (BILLION) "Porkulus Maximus" Bailout Bill
passed in the Senate which was pushed hard by the Democratic Party. Of
course, despite the caution of conservatives in the Republican party,
the SCHIP bill did pass both the House and
Senate in 2009.
But how can we afford to pay for such entitlement programs? Should we limit these programs to those that truly cannot afford to purchase individual health insurance on the open market? How will we determine who is deserving of such entitlements (e.g. legal residents of this country who actually qualify during a legitimate needs assessment.)
What about personal responsibility? Should we also pay for the middle class if they can afford to purchase health insurance on their own?
Expansion of these entitlement programs to the middle class may be well meaning, but it is undoubtedly a fiscally irresponsible act that will end up crippling the already over burdened system.
We might not feel the direct impact of this now, but we most certainly will when all of the "Baby Boomers" start entering the Assisted Living and Long Term Care arena. Should we just let Boomers who don't have the forethought to purchase Long Term Care insurance off of the financial hook while taxpayers shoulder the burden?
Today, those of us who are in need of health insurance have many options to choose from and, contrary to popular belief many of these options are priced very affordably.
An integral part of being personally responsible is that you take the time to explore ALL of your options so you can fiscially sound decisions BEFORE leaning on a an already over burdened Medicaid system.
If you have other options, you should never leave any decisions up government bureaucrats, especially your healthcare.
About the author: C. Steven Tucker, is the President of Small Business Insurance Services, Inc. He is a multi-state licensed insurance broker who has been serving the Small Business community and Self-Employed for 15 years. C. Steven has served as a Subject matter expert for the Wall Street Journal and Fortune Small Business Magazine and hosts his own internet radio show, entitled, "Health Insurance 101." He is also touted for being a consumer watchdog against greedy insurance companies, insurance scams and unscrupulous agents on Twitter.
I have been a multi-state licensed health and life insurance broker for over a decade and one of the biggest challenges I have had to deal with throughout the years, has been trying to help individuals that have been labeled as "uninsurable."
On the Individual Health Insurance market, insurance companies get to "pick and choose" who they offer individual health insurance coverage. This means that insurance companies tend to offer coverage to healthy individuals versus individuals with serious pre-existing medical conditions. In fact, since insurance companies are not obligated to offer anyone coverage on an individual health plan, quite often, individuals with serious pre-existing medical conations are often "declined coverage" altogether.
Once an individual is declined health insurance coverage, that "decline" ends up on their Medical Information Bureau Report (MIB), which other insurance companies have access to. This makes them very likely to be declined again in the future when they apply for health insurance coverage with a different carrier.
Quite often, individuals that have been declined coverage find themselves labeled as "uninsurable." This uninsurable status usually lasts for many years, and in some cases, may last for the rest of the individual's life.
Here is a list of just a few of the pre-existing medical conditions that likely render an applicant uninsurable for ten years or more are:
On many occasions, I also run into individuals that have "less serious" pre-existing medical conditions. Quite often, many of the carriers I represent, classify certain conditions, like Hypertension (high blood pressure) or Hyperlipidimia (high cholesterol) as "rateable conditions." Rateable Conditions are medical conditions that are normally controlled with medication. However, most insurance carriers also consider obesity and smoking as "rateable conditions."
If an individual with a "rateable condition," applies for health insurance coverage, the insurance company may offer the applicant coverage for a pre-existing conditions if the applicant coverage agrees to pay a higher monthly premium. These are premium increases are known as "Rate ups."
In general, insurance companies can "rate up" an applicant for a variety of reasons which are not necessarily limited to the applicant's pre-existing medical condition. For example, individuals who smoke or are more than 30 lbs overweight often receive a "rate-up" because their risk factors are higher.
Sometimes, insurance carriers will refuse to offer coverage to applicants that have more than two or more rateable conditions. For example, if the applicant has the two aforementioned conditions and is also over weight, the underwriting guidelines for that insurance carrier may classify the applicant as "uninsurable."
In fact, many carriers adopt a "3 strikes your out" underwriting process, which means that an applicant with three "rateable conditions," whether controlled or not, is automatically declined health insurance coverage.So, what happens if you find yourself in this category, specifically:
What do you do if you are labeled uninsurable?
For many years, depending on the state you live in, you only had two options. They were as follows:
1.) If you have a corporate tax i.d. number you can purchase a small group health insurance policy from most insurance carriers. With this scenario a minimum of two people (often husband & wife) who work for the same corporation can apply for a small group health insurance policy.After a period of time, or in some cases immediately (depending on how many months you have had prior health insurance coverage without a lapse) pre-existing conditions will be covered provided that they are a covered expense on the policy.
2.) Enroll in your states State Insurance Risk Pool (if your state is fortunate enough to have one). For example, in my home state of Illinois the risk pool is called the Illinois Comprehensive Health Insurance Plan (ICHIP). ICHIP is a state health benefits program and not an insurance company. Persons must qualify for coverage but in most cases if the applicant is coming off an exhausted qualified COBRA continuation plan from a prior employer sponsored group, their pre existing conditions will be covered from day one, provided that those conditions are a covered expense on the ICHIP policy.
ICHIP and all insurance risk pools, are by no means entitlement programs because they are not free! Premiums charged are established by law at from 125%-150% above the average rates charged individuals for comparable major medical coverage by five or more of the largest insurance companies in the individual health insurance market in that state.
These premiums are far from affordable for many people. The rates for a person 50 years of age living in Chicago can range from $554 monthly for a $5,200 deductible plan to $852 monthly for a $500 deductible plan.
For those who do not have an insurance risk pool in their state, their health insurance options are even more limited, especially if they are "uninsurable."
Fortunately, there is now another option that is available through American Medical & Life Insurance Company of New York, New York. This company is now offering a "Defined Benefit Health Insurance Policy" that will offer coverage to the "uninsurable" with only three restrictions.
They are as follows:
1.) Individuals may not be Medicare recipients.
2.) Individuals may not be receiving disability benefits.
3.) Individuals may not be receiving workers' compensation benefits.
There are no other underwriting requirements which means that regardless of someone's health history, they can obtain major medical health insurance coverage.
What exactly is covered by a Defined Benefit Health Insurance policy?
American Medical & Life Insurance Company has four different Defined Benefit Health Insurance Policies to choose from.
Below are a list of benefits on the best of the four different plan options. Remember, All benefits are provided on a "first dollar" basis, which means that you don't have to pay your deductible first to receive these benefits.
- $1,000 per day covered for the first 100 days of hospital admission
- $2,000 in additional coverage for the first day of hospital admission
- $1,000 in additional coverage for the first 15 days of Intensive Care or Critical Care
- Unlimited inpatient our outpatient Surgical Benefit provided on all plans
- One Preventative Care Visit is covered per insured per calendar year with a $150 allowance for that visit
- Up to 7 outpatient doctor office visits included with the with no co pay or deductible required
- Mail order Generic & Brand name medications are discounted at up to 50%
- Medically necessary diagnostic tests and x-rays performed in a doctor's office or outpatient facility (e.g. MRI, CAT Scan, EKG, Mammography) are covered up to $400 per visit with a 5 visit allowance per year
- There is a 12 month waiting period for Pre Existing conditions. However, because the plan is HIPAA compliant this waiting period will be waived if you have a Certificate of Creditable coverage from another health insurance plan showing 18 months of prior coverage with no lapse of more than 63 days
- $5,000 of Critical Illness coverage provided for Primary Insured & Spouse (optional on other 3 plans)
- Nationwide P.P.O. network (www.multiplan.com)
Arguably, these benefits rival the "first dollar" benefits provided on most major medical health insurance policies on the market today. And, the most attractive part about this kind of health insurance policy is that the premium required is typically well below half the premium required for ICHIP and other state insurance risk pools.
Additionally, just like the state insurance risk pool coverage, a Defined Benefit Health Insurance policy is fully HIPAA compliant. This means that if you are coming off of an employer sponsored Cobra continuation plan and can produce a certificate of "creditable coverage" from this prior carrier showing that you had 18 months of prior coverage with no lapse of more than 63 days, your pre existing conditions will be covered immediately. This means that you will not be subject to 12 month waiting period for pre-existing conditions.
While a major medical health insurance policy is always the best way to insure yourself against the catastrophic illness and endless medical bills, a Defined Benefit health insurance policy is, most certainly, a cost effective way to protect yourself if you are rendered "uninsurable" on the individual health insurance market.Without a doubt, this is the finest Defined Benefit health insurance policy on the market today. Especially since many of the offers that target the uninsurable only consist of discounts on medical services. Although clever advertising is often used, discount plans, like "Care Entree" or "Ameriplan" which promise an entire family health coverage for $89 a month DO NOT health insurance!
This "health coverage" referred only a discount and it is so inexpensive because it provides nothing more than P.P.O. repricing which is the same reduced rate insurance companies often negotiate for medical services. Although not necessarily a bad thing for someone who has NO OTHER OPTION, a discount health plan should NEVER be confuses with Health Insurance Coverage.
Without a Major Medical or Defined Benefit health insurance policy, an individual can experience catastrophic medical bills with these types of "health plans." If the average P.P.O. discount on medical procedures performed within a P.P.O. network is between 25% & 40%, a 40% discount on a $100 doctor office visit is a good deal because the visit will only cost the discount card holder $60. However, if the medical bill is $100,000 and the discount card holder has to pay 60% of the bill, the $89 a month "discount health plan" is anything but a good deal. (60% of 100K = $60,000....Yikes!)
For more information on the Guarantee Issue Defined Benefit Health Insurance Plan, other Major Medical Plans and tips on how you can tell if a discount plan is actually "health insurance," please visit our web site @ www.smallbusinessinsuranceservices.com
If you have been classified as "uninsurable" and you want to check out rates and apply online for the aforementioned Defined Benefit Health Insurance plan offered through the Association for Independent Managers (AIM) click this link: aimhealthplans.comPlans are underwritten by American Medical and Life insurance Company of New York, New York and are available in all 50 states.
Mega Life & Health & Midwest National Life Finally Get What They Deserve!
This is a great day in the health insurance industry! Rarely is an insurance company held liable for improper conduct. The majority of the time the "Big Guy" takes advantage of the "Little Guy" and sadly the "Little Guy" has no recourse. But this is not the case today! After many years of repeated violations of insurance conduct laws the NAIC- (National Association of Insurance Commissioners) has levied one of the largest market conduct fines in insurance history against Mega Life & Health insurance company, Midwest National Life insurance company, a.k.a. Health Markets, a.ka. NASE - National Association for Affordable Services, formerly known as U.I.C.I. The fine is 20 Million Dollars and in my informed opinion, it is not nearly enough and it has come much to late!
Health Markets has been slinging their garbage for many years across the country to many thousands of innocent consumers who had no idea the extreme limitations included with the so called insurance coverage provided by Mega & Midwest. They have consistently offered "schedule plans" which pay out an average of only $100,000 per illness (even though the policy is sold as a plan that covers you to One Million or Two Million lifetime). Their coverage traditionally also has no "stop loss number". This has lead to many innocent consumers suffering catastrophic financial losses.
The lack of a "stop loss number" is a very dangerous policy design. To further explain. The term 80/20 is often used when describing how a health insurance policy works. The typical major medical health insurance policy has an 80/20 of $10,000 "co-insurance" percentage split. This quite simply means that after you have satisfied your calendar year deductible the insurance company will pay 80% ($8,000) and the insured will pay 20% ($2,000) of the first $10,000 in medical bills that you incur. This first $10,000 is known as the "stop loss number". After this brief sharing arrangement is over the insurance company pays 100% up to $5 Million per insured for the rest of that calendar year for in network treatment. Everything starts over again on the first of each subsequent year. This greatly reduces the risk to the insured and it is a standard policy design feature included with most legitimate health insurance policies.
In stark contrast, in the case of the "schedule plans" offered through the two aforementioned companies, the terms "co-insurance" and "stop loss" are very rarely if ever discussed with a prospective insured. This is because they have a direct effect on how much the insured will pay in the event of a worse case scenario. Worse yet, Mega & Midwest have traditionally been offering their policies with No Stop Loss Number. This means that if the bill is One Million Dollars, the consumer would pay 20% of that amount ($200,000) before the insurance company would pay 100%. However, with the $100,000 maximum pay out per illness clause included with their insurance contract, Mega & Midwest would still only be responsible for $100,000 regardless of the size of the bill! What a sweet deal for Mega & Midwest. Arguably the worse part about the coverage they offer is the fact that it costs the same or more than a major medical policy without all of the dangerous limitations included with their schedule plans.
Would you buy a policy like that if it was fully explained to you? Most definately not, and the NAIC apparently agrees. This is the primary reason why after a 3 year 29 state investigation, Health Markets has finally had to face up to all the fraud they have been responsible for. On May 29th, 2008 they were hit with a $20 Million fine. Furthermore, a scathing "Market Conduct" report has been written as well. To read all about it visit: http://www.insurance.wa.gov/oicfiles/marketconduct/2007mc/RSA05292008Final.pdf
Market Conduct Report: http://www.insurance.wa.gov/oicfiles/marketconduct/2007mc/MegaReportFinal.pdf
If you or a loved one have fallen victim to this organization and have purchased one of their "insurance products" please do not hesitate to contact me via the contact us page of our web site @ www.smallbusinessinsuranceservices.com for a complete review of your situation and an immediate replacement of your coverage. The risk to you and your loved ones is much to great if you remain "insured" by any of the policies offered by this organization. You can also contact me directly toll free (866) 724 7123 or via email: steve@sbisvcs.com
