Coleman on Health Insurance Today: Post COBRA Options

On April 1, Janice Darby-Coleman, senior account manager and million dollar producer for the Health Insurance Professionals, a general health insurance agency, presented post-COBRA options for those who seek affordable healthcare insurance. Shortly after leaving college, Joyce joined a well-known insurance company and became aware of what happens behind the scenes when claims are filed. This knowledge, combined with a belief that all individuals and families should be able to have affordable insurance, cast her into the role of “Insurance Consumer Advocate,” and began a life-long effort to achieve the best for her clients.

Post COBRA Concerns: Pre-Existing Conditions?

Most individuals “in search” came from corporate environments that provided Group Policies which were subsequently maintained through COBRA. Under COBRA, the individual is entitled to the same coverage for eighteen months that was provided while employed, albeit at higher rates. If such cases, the pre-existing condition was “grandfathered” into the COBRA coverage. However, when COBRA coverage expires, the individual must replace his insurance with another provider—and therein lies the danger.

In qualifying for a new health insurance provider, applicants are divided into two groups: those with a “Pre-Existing Condition,” and those without. Pre-existing conditions include heart attack, stroke, cancer, and other serious systemic health issues (see your individual policy for a list) that constitute morbidity factors. If an individual is deemed to have a high number of “morbidity factors, he/she can be disqualified from coverage altogether.

While such news is alarming, and the temptation to hide the pre-existing condition beckons, the consequences of failing to reveal a pre-existing condition can be lethal, as well. A “keep it honest, keep it real” disclosure approach must be adopted,” as non-disclosure of a pre-existing condition on an application is considered fraud and grounds for rescission of the coverage.

It must be remembered that Illinois is deemed an “insurance friendly state,” meaning that legislation/legislators favor the insurance industry with the result that insurance companies can raise premiums to offset their expenses, without a cap, and they generally do!

All Hope Not Lost: High Risk Pools

Some insurance companies refuse to cover individuals with “pre-existing conditions,” or they provide coverage at egregious rates. Nonetheless, there are certain companies who will, in fact, provide insurance to those with high morbidity factors, but a pre-application inventory of your situation is essential. One of these programs is the “ICHIP Program” (Illinois Comprehensive Health Insurance Program). More details can be found at http://www.ICHIP.com. The phone number for ICHIP is 800-962-8384. A companion program known as Kids Care can be reached at 866-468-7543.

Investigate MINIMEDS—which are plans that accept any health condition except HIV. The costs run as low as $150 per month, but carefully review what is covered and especially what is not. Mini-meds are available through two or three companies, and they discount office visits; if you stay within their network, the office visit costs will be lower but you are limited to 4-5 visits annually. If you want prescription coverage, you must stay within their network.

Look for GROUP POLICIES: If you are a member of an organization (AMA, ABA, Lyons Club, etc.) you may be able to obtain insurance at group rates

Find a SINGLE DEDUCTIBLE POLICY: You may have a high deductible, but look for a plan that allows you to pay the high deductible; after that, 100% of expenses are covered. In January, the government authorized the HSA (Health Savings Plan) in conjunction with certain high deductible plans. Use the out-of-pocket expense (health/vision/dental) as tax deductions under the HSA. See Joyce Coleman for more information on HSA’s. http://www.thip7.yahoo.com

Research Is the Key to Success!

Another source for those with pre-existing conditions is “Health Insurance Information” or http://www.healthinsuranceinfo.net. Also, look for the “Consumer’s Guide to Getting & Keeping Insurance” which addresses protections, COBRA issues, and the ICHIP Program.

To ascertain whether the insurance company is less than desirable, check out this site: http://www.screwedbyinsurance.com , which is a discussion of companies with unfavorable claims payment records. Also, conduct a “Google” search for the “State of Illinois Department of Insurance.” To find itself listed by the Illinois Dept. of Insurance, a company must have ten (10) outstanding claims of a serious magnitude; watch for the names of these companies with bad track-records, and of course—steer clear.

Medical Information Bureau: Critical Information

The Medical Information Bureau (MIB) is located in Boston and is relied upon by insurance companies to provide them with YOUR medical history. Most individuals are unaware that the MIB, similar to a credit reporting company relied upon for credit checks, will offer-up your medical history to an insurance company that inquires as to your health history. Occasionally, the MIB report can contain clerical errors that may jeopardize your status for coverage.

It is important for each individual to request, for a modest fee (approx. $8) a copy of the MIB report that is being sent to insurers to check for inaccuracies. DO THIS PRIOR TO APPLYING FOR INSURANCE COVERAGE, or you may find yourself in the position of being “declined” for insurance coverage once erroneous information is relied upon by the insurer. Furthermore, once you have been declined by an insurance company, you must indicate that fact to subsequent insurance companies—which may also trigger their decision to decline your application. If errors in your MIB report are found, you must go to the originating physician who reported the information and request that he change the report and submit a revised report to the MIB.

How to Choose an Insurance Plan:

To select an insurance plan, consider the following criteria:

1. Rating of the Insurance Company: This rating identifies how well they pay their claims.

2. Lifetime Maximum Amounts: Ask how much is allowed per incident per year? (The norm is between 3-5 millions dollars as a lifetime maximum.)

3. Individual Plan vs. Group Association Plan: Look for plans with larger group associations. The law states that you cannot be cancelled or singled-out, but the insurance companies can put you into a very small group (2), and there is no limit on what insurers can charge.

4. Stability: Note the stability of the Company in an area. Are they looking to leave a geographic location? Check with the Department of Insurance to see if that company’s name is repeatedly appearing—it is a red flag on stability.

5. Rate Guarantees: Some plans will only guarantee their rates for 6 months, or 9 months. Go for the plan that guarantees rates for at least 12 months.

Overwhelmed? Here’s a solution:

Coleman suggests the best approach is to find a good insurance broker to help work through all options. For further discussion, contact Ms. Coleman at the following:

Joyce Darby-Coleman
The Health Insurance Professionals
1900 Highland Avenue
Lombard, IL 60146
800-508-5696
630-202-2276 Cell
Email: thip7@yahoo.com