Health Coverage for All
How to find an affordable policy even if you're not healthy.
By Kimberly Lankford, Contributing Editor
From Kiplinger's Personal Finance magazine, July 2006
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Fight back
Sarah Leath had health insurance through an association for dental employees. But after premiums increased several times, the 40-year-old Indianapolis woman was paying $300 per month for coverage that had a $2,600 deductible. "I didn't feel it was worth paying that much for insurance I rarely used," says Leath. She began looking around for individual coverage, only to discover that insurers didn't consider her as healthy as she thought she was.
For instance, Central Reserve Life wanted to exclude coverage for ten years for any disease or disorder of the cervical back or spine because Leath had been in an auto accident in 2002 -- even though she's been "fine ever since." The company also wanted to exclude coverage for anything related to endometriosis, a condition that Leath has but that doesn't require treatment.
Leath's agent, Nicole Fairbairn, talked with Central Reserve Life, provided test results, clarified information from Leath's application and got the endometriosis exclusion reversed. Leath's premium increased by 20% over the original quote, but she's still paying only $187 per month -- far less than with her former group coverage. Her upper-back problems are still excluded, but in a few years Fairbairn plans to provide new medical records plus a doctor's statement to try to get that exclusion reversed as well. "Don't take no for an answer," advises Leath. "Find out why, and look for an agent who's willing to help you."
Insurers are required to provide a letter spelling out why you've been rejected, says Robert Hurley, vice-president of eHealthInsurance, so be sure to ask for one. A doctor's intervention could convince an insurer to reverse its decision. For example, insurers sometimes reject applicants who take anxiety medications when they fly because it shows up on their medical records as a mental-health drug, says Hurley. But an insurer might reconsider if a doctor explains that the drug was prescribed specifically for flying.
Similarly, if you're undergoing counseling, it's helpful if a doctor explains that the treatment is related to a particular situation, such as a death in the family, rather than chronic depression. And it doesn't hurt for a physician to tell an insurer how well you've been managing your condition over the past few years. Even something as simple as getting a doctor's note to clear up an error in your medical records, such as a wrong date, can make a difference in whether you're accepted or rejected by a company.
Know the rules
In most states, insurers can reject you for individual coverage because of a medical condition (see the box on the facing page for a look at states where you can't be rejected). But even if you don't qualify for individual health insurance, you may still be able to get coverage.
For example, employers with 20 or more employees are required to let you continue group coverage under the federal COBRA law for up to 18 months after you leave your job (some states have similar laws covering smaller workforces). You'll have to foot the entire bill, without the 50% to 75% subsidy generally provided by employers. But the insurer can't reject you or raise your rate because of your health.
Even if you don't have medical problems, it pays to sign up for COBRA when you leave a job and to maintain it until you qualify for another individual or group policy elsewhere. But COBRA is a temporary solution, so you need to find alternatives.