Thursday, August 21, 2014  
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Health Insurance for Individuals

Denied Health Insurance? Here Are Solutions

An illustration of how Health Care Reform will manage high-risk individuals who were denied coverage. The federal government has stepped in to increase the amount of funding for high-risk pools, but the type of coverage will vary by state.

An illustration of how Health Care Reform will manage high-risk individuals who were denied coverage. The federal government has stepped in to increase the amount of funding for high-risk pools, but the type of coverage will vary by state.

The great news is that, come 2014, no one will be denied health insurance because of a preexisting condition.   The less-than-good-news, for people shopping for their own insurance who have diabetes, asthma, or even a pregnancy, is that 2014 is still more than three years away.

Under existing law in many states, insurance companies can turn down individuals for a wide variety of preexisting medical conditions.   Some will offer coverage with a preexisting condition exclusion or a waiting period; they won’t cover a medical expense associated with that condition for an extended period of time.

Why Insurance Companies Deny Coverage for Preexisting Conditions

Insurance companies have a very smart reason to take a hard look at preexisting conditions.   In a totally free market, people would have an incentive to buy insurance when they get sick to cover their bills, but not purchase it when they are healthy.  This works fine for the individual, but not for others covered by the same insurance, because the very concept of insurance relies on the company being able to spread risk among healthy (ier) and unhealthy patients.

Health Reform Offers Insurance for All – Regardless of Condition

In 2014, when the new health reform law goes into effect, denial of coverage will no longer be an issue, because the law requires everyone to have insurance.  “Everyone into the pool!”, including the young and healthy helps spread the risk, so that insurers can cover the 67-year-old diabetic without him bankrupting the system.

So what can individuals do from now until 2014 if they have a pre-existing condition and cannot get individual coverage?   Under health reform, many states have already begun to create or expand their ”high risk” pools – an option for people denied coverage.   In other parts of the country, individuals can enroll directly into the government’s new Preexisting Condition Insurance Plan, or they can request a quote for coverage here.

In many cases, coverage for those who are usually denied coverage is not cheap — not even close.  But it is coverage and a bridge to get us to 2014 when there will no longer be “pre-existing” conditions and insurance rates won’t vary based upon one’s health status.

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3 Responses to “Denied Health Insurance? Here Are Solutions”

  1. Scott Hexter Says:

    What can a person do if an insurance company has agreed to cover a child for treatment of a particular condition, then after treatment, denies payment on the grounds that it was a preexisting condition? This happened recently in KY to my grandson.

  2. Christian Flores Says:

    Scott: It may be a good idea to ask your insurance company exactly where in the contract your grandson’s condition was excluded. You should also retain all documentation related to the application you submitted. The company may claim that your grandson’s health history was not fully disclosed to the insurance company when you applied, and if that is the case, then they can say that your policy’s benefits are void.

  3. susan Says:

    Hi –

    I was covered (Kaiser Permanente) from my job, laid off and did Cobra (california) subsidy for 15 mos until subsidy expired. I applied for individual plan (at Kaiser) and was denied. I thought you couldn’t be denied if you held previous insurance and there were no breaks of more than 63 days? Thank you

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