If you've recently lost employer-sponsored health insurance, you may be eligible for COBRA benefits, says Bruce Benton, president-elect for the National Assn. of Health Underwriters. Just be prepared for some sticker shock: "COBRA is expensive because it's the rate the employer was being charged [the premium you paid and what your employer kicked in] plus a small 2% administrative fee for federal COBRA and 10% for California COBRA," says Benton, who is also executive vice president for Genesis Financial & Insurance Services in Tarzana.
If you've exhausted your COBRA benefits, federal law guarantees you a plan in the private insurance market, regardless of your health status. The type of plan you'll have access to varies by state.
In California, health insurance companies that sell individual policies are required to make their two most popular plans available to people coming off COBRA, Benton says. Make sure that you receive a letter from your previous insurance company stating you've had coverage for at least 18 months. This is called a Certificate of Creditable Coverage, and you'll need it in order to qualify for what's called a HIPAA plan.
And although insurance companies are notorious for turning away consumers trying to buy coverage on their own, don't automatically assume that a preexisting health condition will disqualify you. According to Minoux, if your condition is fairly mild and well controlled, there may be carriers willing to extend coverage. She advises people to work with an experienced insurance broker. "Brokers know the carriers and have had experience submitting applications and know which one will accept what," she says.
You can find a licensed insurance agent in your area at the National Assn. of Health Underwriters website. Go to http://www.nahu.org, click on "Consumer Information" and choose "Find an Agent."
If you're in business for yourself, it's possible to get group coverage. According to Benton, small business owners with as few as two employees can qualify for a group plan. These plans are "guaranteed issue," meaning coverage is assured even if employees have preexisting health conditions. However, insurers can charge more because of their health status. The size of that mark-up depends on state law; in California, rates cannot be raised more than 10% above the standard-risk rate, Benton says.
Finally, in 2010 the Affordable Care Act made federally funded high-risk insurance pools available to people who could not obtain insurance on the private market. These plans, called Pre-Existing Condition Insurance Plans (PCIP), are administered by federal or state governments. California operates its own PCIP along with the Major Risk Medical Insurance Program (MRMIP), the high-risk pool that existed before healthcare reform.
To qualify for PCIP, you must be a U.S. citizen, have a preexisting health condition and be uninsured for at least six months before applying. MRMIP eligibility requirements are different: Although there can be a waiting list, you don't need to be uninsured for any period of time. However, premiums tend to be much higher and benefits aren't as robust as with PCIP.
You can find information about these plans — including benefits and premium rates as well as how to apply — by checking with your state's health department or by visiting pcip.gov. You can also call the PCIP assistance center at (866) 717-5826.
Zamosky has been writing about how to access and pay for healthcare for more than 10 years.
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