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.com
Plans are underwritten by American Medical and Life insurance Company of New York, New York and are available in all 50 states.
