Want to get a preexisting condition like asthma covered? You may have to prove you have your disease under control.
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Q: What’s the best way to maintain my health-care coverage if I have a chronic condition?
A: The first thing I recommend is to see if there is any way you can qualify for job-based coverage. Are you in a job that offers benefits that you hadn’t signed up for, or do you have a spouse with a job that has benefits?
The reason is that you have the most legal protection in job-based health plans. Under the Health Insurance Portability and Accountability Act (HIPAA), if the coverage is offered, the employer can’t say, "I’m not going to let you into my health plan because you have breast cancer"—or any other health issue. They must offer you the same benefits and they must kick in the same percentage of premium as they would for anyone else.
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Q: So my chronic health condition will not be a problem if I have coverage through an employer?
A: Although the employer cannot discriminate against you, the health plan can still deny coverage of preexisting conditions for new employees for a period of 6 to 12 months. However, if you had any kind of prior health insurance—and no gap in coverage—the amount of time you had it can be credited against the exclusion period of your new plan.
Bottom line: Under HIPAA, a gap in coverage is defined as 63 days or more (although in some states it may be longer under state law). Once you hit 63 days without insurance, treatment for your condition can be denied for 12 months when you enroll in a new health plan. The maximum legal exclusion period for any group health plan is 12 months (or 18 months if you join the health plan late). However, if you have an individual health plan, the laws vary a lot by state, and you should contact your state insurance department for details.
Q: What if I leave my job—how do I keep my coverage?
A: If your employer had at least 20 employees and sponsored a health plan, you will probably be eligible to receive continued coverage under that plan for up to 18 months through the Consolidated Omnibus Budget Reconciliation Act (COBRA). This is true even if you quit because you’re too sick to work. But brace yourself for sticker shock—the employer is no longer required to contribute anything toward the premium, so you’ll have to pay 100% of it. An average plan costs about $350 a month for an individual, and can be more than $1,000 for a family. I encourage people to take COBRA if possible, but many cannot because they can’t afford the premiums.
Bottom line: For people who work at companies with fewer than 20 employees, 40 states offer COBRA expansion programs, often referred to as "mini-COBRA," which provide continuation coverage for 3 to 36 months (depending on the state). Check with your state insurance department to find out what is offered.
Q: What happens after 18 months, when my COBRA or state continuation coverage runs out?
A: Then your options start to get a little tricky. You become what we call "HIPAA-eligible." The law states that if you’re chronically ill, no matter where you live, there has to exist a non-group insurance option that can’t turn you down. It varies state by state, but for instance, about 30 states mandate a "high-risk pool" plan to sell insurance to people who cannot pass medical underwriting for a normal policy. HIPAA coverage also will not impose a preexisting condition exclusion, which is an important protection. However, HIPAA coverage can be very expensive, because federal law doesn’t limit the cost of this type of coverage.
Bottom line: Try convincing a prospective insurer that you are an acceptable risk. Some insurers will automatically deny coverage when they learn you have diabetes, for instance, but you may be able to successfully argue that your diabetes is under control.
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Have you ever been denied coverage because of a health condition?
A: You’re left with buying a policy on your own in the individual market. A few states require at least one insurer to sell health insurance to any resident without regard to the person’s health. We call this a "guaranteed issue" policy. New York, New Jersey, Vermont, Massachusetts, and Maine are five states that require all insurers in the individual market to sell to any resident without regard to the person’s health. So if your situation is particularly dire, you could move to the Northeast. Without premium subsidies, though, policies can be very expensive. In most other states, you can be turned down by health insurers in the individual market if you have even a mild health condition. If you live in a state that offers a high-risk pool, you might try that as an alternate source of coverage. Unless you are HIPAA-eligible, however, the high-risk pool will probably exclude from coverage (for 6 to 12 months) the very preexisting condition that made you eligible for the pool in the first place. As a result, high-risk pool programs tend to be very difficult to enroll in.
Bottom line: For more information about coverage options in your state, check out the National Association of Health Underwriter guide for medically uninsurable individuals.