HEALTH INSURANCE 101
Pre Obamacare Health Insurance
The information on this page was compiled from a number of pages on the old version of this website. Most of the information is obsolete; pertaining only to those health insurance plans that were in effect prior to January 1, 2014, known as "grandfathered" plans.
I've left this information up for those with the old grandfathered plans and also for reference.
When a person first steps into the health insurance maze they sometimes do not know much about it or worse, they have pre-conceived notions about it.
All health care insurance policies are NOT the same!
If you "shop price" - - you will get badly burned!
Maybe not today, but it WILL eventually happen.
SOMETHING FOR NOTHING - Everybody would like to get something for nothing. It just doesn't happen with health insurance. This section goes into some of the details of health insurance. It also deals with the pitfalls and the traps that you may find yourself in after you get your cheap policy.
HEALTH INSURANCE IS NOT A "ONE SIZE FITS ALL" - If you think about it, shopping for health insurance is like shopping for a new car. You have a choice between the low end model with no options, a fully loaded luxury car, or something in between. You may also get a lemon, which will cost you more in the future than you care to think. Do you know which plans are which? If you shop for the cheapest you'll get the basic low end model which may or may not have the benefits and coverage you need.
YOU GET WHAT YOU PAY FOR!! - If you save $40 per month on your cheaper policy today but you find that you have a $100,000 hospital bill sometime in the future, how smart was that cheaper policy? You cannot get the best price, best service and best product all in one policy. You must decide which of these three you want to give up.
As a result of the Affordable Care Act, COBRA regulations are not as important as they used to be. As of January 1, 2014, if you've lost your group coverage you'll be able to purchase individual health insurance and your pre-existing conditions will be covered.
However, COBRA regulations are still in effect, so I'll leave this page up for reference. There could be situations where a COBRA plan will have better benefits or will be less expensive.
STATEMENT - I must be offered COBRA.
FAQ - Most COBRA requires continuation coverage to be offered to qualified covered employees, their spouses, their former spouses, and their dependent children when group coverage would otherwise be lost due to certain specific events. COBRA generally applies to all group health plans with at least 20 employees covered or by all state and local governments. The COBRA premium will be 102% of the costs that both you and your company paid unless you qualify for the subsidy.
STATEMENT - I'll get another job with group insurance.
FAQ - Most corporations today are very sensitive to their health care insurance costs. Their group health care plan only has to take you IF the company agrees to HIRE you. Companies are doing screening for drugs, but, at the same time, they are checking your health history. Many companies will simply NOT hire unhealthy people. Why should they? All that is doing is driving their health care costs up for everyone else in their company.
Also, many companies are deciding that it is more cost effective not to offer health insurance to their employees.
STATEMENT - I need to stay on COBRA because I'm uninsurable, what can I do?
FAQ - If the rest of the family is healthy, get them off of COBRA and on their own health insurance policy. Each qualified beneficiary can elect whether or not to stay on COBRA. You have an election period of at least 60 days (starting on the later of the date you are furnished the election notice or the date you would lose coverage) to choose whether or not to elect COBRA. You then have a period of 45 days to pay the premium. However, you must pay the premium back to the date you lost employer sponsored coverage.
STATEMENT - I (or the sick family member) must be covered after COBRA expires.
FAQ - HIPAA laws guarantee that you or your family be covered but does not control the premium. The HIPAA rates will average around THREE TIMES the premium for healthy people and are over $1000 per month. In addition, you usually don't have a large choice in plans. You will not be eligible for a premium tax credit (subsidy) with HIPAA plans. There may not be prescription drug coverage or doctor's visit co-pays included. A monthly health care HIPAA premium upwards of $1000 per person is essentially "no health insurance" for most folks.
STATEMENT - My rates keep going up!
Yes, they do. If you think about it, health insurance protects you against high medical bills. As long as medical costs keep skyrocketing, so will health insurance premiums. The Affordable Care Act has done little to actually reduce the cost of health care, but instead concentrated on the subsidies to help pay for Health Insurance. Here is a subsidy calculator so you can estimate the cost of insurance and the amount of the subsidy for which you'd qualify.
The numbers for year 2009 show health care spending averaged about $6,815 per person, according to the report issued by the Kaiser Family Foundation. This means that the insurance company must receive in premium around $420 per month per person in the group, minus any co-pays and co-insurance that each person must pay.
What About "Pre-Existing Conditions"?
This is the one of the most asked-about sections in health care insurance, and the least understood.
Do Pre-existing Conditions matter?
A direct result of the Affordable Care Act means that pre-existing conditions can no longer be used to decline issuing you a policy or increase the premium. If you have a "grandfathered" insurance policy you may still have exclusions for your conditions or you may still be paying a higher premium.
See Health Insurance 102 for post-Obamacare information
Health Insurance Riders
There are two "riders" with insurance company jargon. One is an endorsement to the contract excluding the insurance company from covering a certain condition or illness, also called a waiver. Unless you have an older "grandfathered" health insurance policy this one no longer applies.
The other is an add-on to the basic contract giving you additional "benefits". We are talking about this one here.
For more information on Riders please visit our rider page: