If you lost your health insurance recently, you should know the clock's ticking. Sixty-three days after the coverage period's end date, you will lose any special legal protections afforded you as a health insurance customer. If you want to keep those protections, you need to act, pronto.
This bit of advice, which you'll hear from most experts, is especially true if you have any pre-existing conditions. By law, private health insurers can deny you coverage or refuse to pay for any medical conditions you already have when you apply. But relatively recent laws prohibit insurance companies from blackballing you as long as you've had no "significant break" in coverage—that is, you haven't been without insurance for longer than 63 days.
- California Department of Insurance
- COBRA FAQ
- HIPAA Helpful Tips
- Major Risk Medical Insurance Program
- Healthy Families Program
- Access for Infants and Mothers Program
If you're thinking you don't have any pre-existing conditions serious enough to warrant such an exclusion, then you're like me. And you may, like me, be wrong.
I waited more than two months after transitioning jobs to apply for a new plan and was subsequently denied coverage, not because I had any life-threatening disease, but because of a minor bout with mononucleosis years earlier. That's right, I had a case of mono. The insurance company I picked makes it a policy of digging back 10 years into your medical history in order to make its underwriting decision. (The observant reader will note that 10 years is the same amount of time it takes to get a bankruptcy expunged from your credit history, not to mention that bankruptcy is what often results from major medical expenses when you don't have coverage.)
So here's why you should never go without coverage, how you hold onto your health insurance even if you lose your job, and what you can do if you make the same numskull mistake I did.
They Will Find A Way
Any significant break in coverage and you have to start from scratch. You no longer have what is called "creditable coverage" to shield you against that pre-existing condition clause. And you might be surprised by the kinds of medical issues some companies will cite as grounds to deny coverage altogether.
If you used Accutane to treat acne within the past year, for instance, you will be declined automatically, according to the underwriting guidelines for Anthem Blue Cross. The same goes if you suffer from rheumatoid arthritis or have a pacemaker.
According to Aetna's underwriting guidelines, you're a no-go if you are younger than 22 and receive allergy shots. Nor will the company take on anyone with chronic bronchitis or anyone younger than 34 who takes medication for sciatica.
Kaiser Permanente may write you off if you suffer from kidney stones or if you have undergone infertility treatment. Or, if you have breast implants. Sorry.
Simply put, stay insured. If you don't have a break in coverage, you generally can't be declined. But how do you prevent that break if you lose your job, or make the leap into the scary world of self-employment?
Buy an individual or family plan (you have other options, but more on that later). The answer sounds simple, but the legally prescribed steps you need to follow to keep your protection are fairly strict and can be a little confusing.
The first step is to extend your current or former plan through COBRA, an insurance option created with the 1986 Consolidated Omnibus Budget Reconciliation Act. COBRA requires insurers to continue offering an employer or group health plan to an individual even after he or she no longer works for that company.
But there is a catch: you have to pay the full premium, which includes the portion your employer was picking up. It's probably not as much as you'll be paying for that surgery you end up needing while you're uninsured, but it's still expensive. (Some good news here. Many recently unemployed individuals may qualify for a government subsidy that, at least for a period of time, will subsidize 65% of your COBRA premium.)
And don't wait to sign up for COBRA! You have about 60 days from the time you end your employment before you lose your eligibility.
The next step is to wait, but keep paying those COBRA premiums. If you get hired by a new employer, you can latch onto its group plan (if your employer is benevolent and offers coverage.) Otherwise, when your COBRA eligibility runs out after 18 months, you'll have to buy an individual or family plan through a private insurance company. Either way, another law, the Health Insurance Portability and Accountability Act, or HIPAA, prevents insurers from hitting you with that pre-existing condition clause. But you must stay on COBRA for the full 18 months, and (here it is again) you have 63 days to transition from COBRA to a new plan through HIPAA, or you're out of luck.
What If You Blow It?
If you do make the same mistake I did, you'll be entering a sort of no-man's land where your history of paying for health insurance no longer counts. Insurance companies will not have to cover any pre-existing condition for up to a year if you're applying for an individual plan or six months for a group plan. But you still have a few options.
Certain trade organizations and unions offer group health insurance or medical discounts to their members. So if you belong to, say, the Service Employees International Union, or the American Bar Association, or the Screen Actors Guild, you may want to check out their options.
You may also become eligible for certain government-run health plans if you're first declined coverage based on a pre-existing condition. Californians who have exhausted all other options can apply for the Major Risk Medical Insurance Program. Or you may be able to sign up for Medi-Cal, California's version of Medicaid, even if you make more than the maximum income normally allowed participants of that program.
If At First You Don't Succeed...
As for me, I did eventually get insurance. I applied for an individual plan at a different company, and this one only asked for five years of medical history, instead of 10. That difference, or more lenient underwriting guidelines for my particular situation, was enough to get me approved. The lesson here is that persistence and shopping around can pay off.
Meanwhile, the fairness of the current health care system is open to debate. But the fact is, you need to do everything you can to maintain your coverage. The punishment for 63 days of procrastination could be, well, six months to a year.