Health Insurance Options
What types of pre-existing conditions may prevent me from getting health insurance?
Almost everyone who has cancer history or heart disease is unfortunately uninsurable. Cancer is a little bit more forgivable if the person has gone through seven or more years of treatment free living, but anyone who has been treated with heart disease typically is uninsurable. Someone who is taking too many medications is also uninsurable. The insurance company looks at the cost of medications. For example, some psychiatric medications and headache medications are extremely expensive. If the insurance company looks at the costs and they see that you're going to be paying $400 a month in medication costs, the might well not want to accept you paying only $300 in premium. Health insurance companies have to work on a profit like everybody else, and if they see that the expenses are greater than the income, they're not going to accept you.
What might prevent me from being approved for health insurance?
A person might be nervous about qualifying for insurance if they have too many health problems. For example, if you're being treated for chiropractic problems and you're going to a dermatologist for acne problems and you're using a medication for headache problems. The insurance company adds the cost that they're going to incur immediately right off the bat from those conditions and they're going to decide if they think you're insurable or not. That could cause you to be uninsurable. People, obviously, that have had cancer or heart disease those are much more serious conditions and those conditions are also hard to insure. Unless a person applies on a group plan. So when somebody has an uninsurable condition I sometimes will recommend that we try to put in a small group plan for them.
What do I do if I am not approved for health insurance?
If you're not approved for health insurance, I try to find out why you weren't approved. Now, the insurance companies, under HIPAA laws, are very, very careful about giving me, the agent, a lot of your personal information. They try to protect your privacy, and they're good about it. But, I usually talk to my clients and say you're going to be getting a letter from the insurance company specifying exactly why they declined you. Call me when you get that letter and I will see if those reasons are reasonable. Sometimes it's just a matter of you having your doctor clarify what kind of condition you have, because sometimes the doctor's notes are sloppy, and the insurance companies don't really know how healthy you really are. A lot of times we fight the insurance company to change their mind, and I'd say about 30% of the time they'll change their mind, because they didn't realize this or that about your health. Sometimes you're completely uninsurable and we have to go to a California high-risk program. Sometimes if you have a business we can put you in a group program. There are all kinds of alternatives for people who think that they're uninsurable or who are uninsurable.
What is the "HIPAA Law", or the "Health Insurance Portability and Accountability Act"?
HIPAA stands for the Health Insurance Portability and Accountability Act. It's a fantastic program from the government that says that once you're on a group plan, and you've now exhausted your 18 to 36 months of COBRA, you still could be eligible for an individual policy if you're completely uninsurable. A lot of people, after they exhaust their COBRA benefits, can't find another job with group benefits. They then come to an agent and they say they need an individual health policy. They might not be insurable, but under the HIPAA laws, they're guaranteed to get an individual policy that will be more expensive than a normal policy, usually about double the price of a normal policy, but it still has full benefits, and it gives the person the ability to have a regular health insurance policy for the rest of their life.
What is the "State High Risk Health Insurance Pool"?
Is there a middle ground between easily insurable and uninsurable?
There are people who are completely insurable, and then there are people that are insurable, but have to pay a higher premium. For example, some companies say, "You're taking all these medications, you're taking all this treatment, and it's pretty darn expensive. We'll accept you, but instead of paying the normal rate of $300, we'll accept you at $600." You have the choice of continuing at that rate, or you can decline it. So they do give you some choices if you're between uninsurable and insurable.
What is an "HSA" or "Health Savings Account"?
An HSA plan is relatively new. It's a high-deductible health insurance policy. Usually with a $2,000, $3,000, or $5000, deductible and it's a special program where people are willing to say that they won't expect the insurance company to pay for absolutely anything during that deductible. The insurance company pays absolutely nothing during that high-deductible period, no co-pays, no nothing. This is because you have this high deductible policy the insurance company says you can also form an HSA account with various large banks and you can take money every year equal to your deductible and put it into this special account. It's almost like an IRA. As an example, if you have a $2,400 HSA policy you can put $2,400 into this special account, it reduces your income dollar for dollar. Let's say that you're earning $50,000 a year and you're paying income tax, if you put $2,400 into this HSA account at some bank, you're going to reduce your income and also reduce your income tax. So the savings on $2,400 might save you $1,200 of income tax. Now this money is sitting in your special account and the bank has given you a special debit card with a Visa or MasterCard name on it. When you go to a doctor or to the dentist, when you go to the pharmacy, when you have to pay for these expenses, you're out of pocket expenses are paid with pre-tax dollars, as compared to what most people pay for medical expense with after-tax dollars. If you don't use the money, the money sits there and earns on a tax-deferred basis like an IRA and you can use it at a later date. Sooner or later you'll probably have some type of medical expense and you can use it at a later date. The negative of an HSA program is that if you take the money out for non-medical reasons, non-dental reasons, non-prescription reasons, the government will assess you a 10% penalty and you'll have to pay income tax on that money because you're not using it for the purpose that they originally intended.
What is "Medicare"?
Medicare is a social security program that allows every American after they become 65 to have insurance at a much lower cost than they've ever experienced their whole lives. Medicare pays basically 80% of your medical expenses once you become 65 or if you're disabled prior to age 65.
What is a "Medicare supplemental health insurance policy", and do I need one?
Well, as I said, that a Medicare program pays 80% of your bills, And the Medicare supplement pays the other 20%. So various insurance companies sell Medicare supplements. Now if you don't have a Medicare supplement, you might be on the hook for 20% of the large number. So if you have a $200,000 medical problem and you don't have Medicare supplement, the government and Social Security and Medicare may only pay 80% of your expenses. You'll have to pay the other 20%. So most people will have a Medicare supplement to cover all those expenses, the 20%.
What is "Medicaid"?
Medicaid is a special federal program, funded not only from the federal government but from the state government. It covers people with very low income: people that have, generally, poverty level income. They can still get a pretty decent health insurance program from the government.
What is "short-term health insurance coverage", and when would I use it?
Short-term health coverage is for a person who is in the midst of changing jobs. Let's say that you're working for a company, you quit, and then it's going to take two months before you're accepted or before you're able to assume a new job. Or, if you start with a new job there is a clause in your contract that you're not covered under their health insurance policy for 90 days. So, a short-term policy gives you coverage in the interim, in the time between your covered and the time under the new program.
What is a "discount medical card"?
There are discount medical cards that are legitimate today. But most of them are not legitimate. They don't pay...they're not really insurance policies and they don't really give you a discount. Many insurance commissioners of many states are investigating these programs because they're really fraud. I would suggest that any person contact their insurance broker and find out if these discount medical cards really are good programs in their particular state. People should be very careful about purchasing them. If you have a good health insurance policy, it's going to have great benefits and if you're really paying for something, you'll probably never collect from it.
What is "prescription drug insurance"?
If you have a good health insurance policy, it has drug prescription benefits. And, many times you'll find that the drug prescription card benefits you'll see in these drug prescription programs, are really frauds in that they don't pay the benefits like they said they're going to. In most states, insurance commissioners are going after these programs left and right. So if you have a good health insurance plan, I would suggest not having a drug prescription plan, additional benefit.
