Health Insurance Blog

If you have health insurance, either through an employer or one of the many individual health plans, it’s possible that you still don’t have enough coverage! Roxanne Patel Sheplavy exposes the new health trend in the February 2009 issue of Fitness magazine: more Americans than ever are underinsured. The Commonwealth Fund defines being “underinsured” as spending 5-10% of your income on out-of-pocket expenses, including skyrocketing deductibles and extremely expensive co-payments that may prevent individuals from recieving essential medications or care. One in seven adults in 2007 fell in this category, and in this economy even more employers and insurers are cutting back on what their health insurance policies cover.

Fortunately, Roxanne stresses that there are resources available to help the underinsured before they are burdened by medical debt (believe it or not, three-quarters of medical bankruptcies involve individuals and families that had insurance!). These organizations may be able to assist you in paying your bills, renegotiating payments, or whatever else you need to handle your medical expenses.

Where To Go If You Are Underinsured:

• Co-Pay Relief
• Healthwell Foundation
• Patient Services Incorporated
• Patient Access Network Foundation
• CancerCare

According to Angela Gonzales in the Phoenix Business Journal, LifeWise Health Plan has decided to exit the Arizona health insurance market. The insurer stated that the plan did not have enough enrollees to turn a profit. LifeWise launched its Arizona plans in 2004.

Fortunately, policyholders won’t have to worry about having developed conditions that would prevent them from finding affordable individual health insurance on the open market. Blue Cross Blue Shield of Arizona has agreed to take all former LifeWise customers that were previously healthy and offer them a plan of similar coverage and cost, even if they developed a health condition after buying the initial policy. In order to take advantage of this offer, employer-sp, Angela onsored health insurance groups must switch to BCBSAZ plans by May; individuals have until September to make the switch.

About 16,000 Arizona policyholders in total will be affected by this closure, Angela claims.

A recent press release by eHealthinsurance.com introduces the launch of a COBRA Subsidy Calculator that can be found on their sister website CobraLearning.com.

The tool was developed to help educate unemployed Americans about how the new stimulus package will effect their COBRA coverage costs as well as what other affordable health insurance options are available.

The COBRA calculator allows health insurance shoppers to input the cost of their monthly COBRA premiums and calculate the out of pocket costs after the 65% subsidy. The calculator also gives shoppers the option to input basic information (gender, date of birth, zip code) to view anonymous quotes on individual health insurance plans as an alternative to COBRA.

The Massachusetts health insurance mandate, passed in 2006 in an attempt at health care reform, is facing some unexpected challenges during this recession. Steve LeBlanc of the Associated Press says that increasing unemployment rates will make more people unable to fulfill the insurance requirement. Failing to buy health insurance will result in up to $1,000 in fines per tax year (taken from tax refunds), although the sentence is often waived. In 2007, only about 1% of the Massachusetts population did not buy health insurance, but experts predict that number will increase due to consumers focusing on other priorities.

While insurance is completely free for the poor and subsidizes plans for people making up to 300% of the poverty level, private individual health insurance can still be out of reach. The state does cover health insurance costs for as long as someone is collecting unemployment benefits, which helps those who have been laid off. However, the influx of new applicants to subsidized plans is expected to cost $800 million in the new fiscal year’s budget, an increase of $60 million.

Steve reports that some legislators believe the current law is unrealistic given current economic conditions and should be waived for the newly unemployed, but Democratic Governor Deval Patrick vows to continue the program and cut other spending to balance the budget instead.

The Sun-Sentinel’s Bob LaMendola wrote about a shocking trend among Florida health insurance companies: they’re now trying to save money by forcing consumers to take completely different drugs that are less expensive than the medications actually prescribed. While it’s customary for insurers to only cover generic versions of prescription drugs (that are chemically equivalent to the brand names), this is a recent development. Blue Cross Blue Shield of Florida and AvMed Health are among the insurers going this route. Patients have been informed that they will face increased co-payments or the elimination of coverage altogether for certain brand name medications.

Doctors are being encouraged to prescribe similar drugs with a generic equivalent; for example, instead of prescribing a patient Lipitor (which has no generic), give them the generic of Zocor. The insurance companies claim that these practices will result in an 80% savings. However, doctors are worried that insurance companies are attempting to second-guess their judgement on what a patient actually needs. Patients could suffer if forced to take a less effective drug. Bob points out that they can appeal to the insurance company if only the brand name drug is effective, but appeals are time-consuming and costly.

Even though individual health insurance rates are rising across America, it’s not all bad news for one state! A KFSM News report says that a tax credit may be in the future for purchasers of Oklahoma health insurance. If the state legislature passes the proposal, individuals will be able to deduct the full cost of their health insurance on their income tax returns. The tax break would take effect in 2010 and beyond.

So far, the state House Revenue and Taxation Subcommittee has approved the bill, which is a good sign. Estimates claim that around $2.2 billion in health insurance premiums will be eligible for deduction. The tax credit will make health insurance more affordable, and is hoped to cut into the number of uninsured Oklahoma residents (currently about 600,000).

More people are shopping for individual health insurance these days.  Golden Rule, says their sales are up 24% over the the past two months.  In addition, ehealthinsurance.com reports that submitted applications were up 18% in the 4Q, over 4Q in 2007.

Along with the increases in individual health insurance shoppers, health insurance rates have increased as well:

• About 80% of Anthem Blue Cross of California’s individual health insurance policy holders will receive double-digit rate increases shorty, and some will receive increases over 30% or more.
• Blue Cross Blue Shield of Michigan is seeking state approval to increase monthly premiums by 56%
• Lifewise raised rates in Washington by 17.6% effective January 1.  In addition, Blue Cross Blue Shield of Oregon raised rates for their Washington state members by nearly 30% on avg.

For perspective, group health insurance premiums increased by roughly 5% in 2008.

As you know, COBRA coverage allows individuals and families the right to continue their group health insurance coverage for up to 18 months if they lose their coverage due to being laid off for example.  However, COBRA only protects people who work in companies with over 20 employees and if the organization is still in business.  In addition, health insurance coverage via COBRA is very expensive.

There are more affordable health insurance options, and probably the best option if it is available to you, is to enroll in a spouse’s group plan as a dependent.   If that isn’t an option, an individual health insurance plan from a private health insurance company would be a much more affordable option than COBRA, and it is likely that you would be able to find a plan that would allow you to continue to see the doctors that you currently use, and with a similar set of benefits.  However, if you have pre-exisiting medical conditions, or are pregnant you may not have the option of enrolling in a new health insurance plan, at least at an affordable price, and sticking with COBRA might be your best option.

Regardless of what you choose to do when faced with this situation, you should never drop your current coverage before you have a new plan in place.

Tough times are resulting in many people being laid off from their jobs, and losing their health insurance as a result. They may be unable to afford COBRA, but still need health care. In the Columbus Dispatch, an article highlights several actions Ohio doctors are taking to help their patients without insurance. Despite their generosity, it is important to regain insurance as soon as possible: do so before insurers will no longer be required to cover any pre-existing conditions you may have. 

Some doctors are creating monthly payment plans that charge as little as $5 for those in dire straits and lacking Ohio health insurance. If they have some rate flexibility, they are charging the lowest amount possible to the uninsured. A lot of medical professionals give poorer patients free samples of prescription medication, although the economy is causing drug manufacturers to cut back on that practice as well. Meanwhile, prescriptions of generic drugs are more common, because they are far more affordable for uninsured patients. 

The article also states that medical practices are assisting patients in applying for government assistance programs, such as those for children’s health insurance. 

(Photo credit: Lauren Nelson under CC 2.0)

The economic stimulus bill, which was recently passed by Congress and is expected to be signed by President Obama today, includes help for unemployed individuals who are struggling to maintain their health insurance under COBRA. The Los Angeles Times’  Melissa Healy notes that there have been a lot of questions swirling about the topic. Here is an FAQ:

Q: Who qualifies for a COBRA subsidy?

A: Anybody who 1) worked for an employer that is required to offer a COBRA health care coverage extension (some smaller employers aren’t), 2) earns under $150,000 as an individual or $250,000 for a joint tax return, and 3) was either laid off after Sept. 30, 2008 or is laid off between now and Dec. 31, 2009.

Q: How much does the COBRA subsidy cover?

A: The government will subsidize 65% of your premium, paid directly to your former employer.

Q: How long will this subsidy last?

A: It lasts for 9 months in total, including retroactive payments.

Q: What if i’ve been paying the entire COBRA premium myself?

A: In that case, you will be reimbursed for 65% of your premium dating back to Sept. 30, 2008; either in credit for future COBRA payments or a refund if you’re no longer enrolled. You will then have around 4 months left of subsidized COBRA health coverage.

Q: What can I do if I’ve been laid off and didn’t enroll in COBRA because it was too expensive?

A: Employers will be required to allow you another opportunity to sign up for the program.

Q: Do I have to provide proof of income to apply for COBRA?

No, but if it turns out that you make more than the upper limit, you’ll have to pay the subsidy back. 

I hope this post has answered some of your questions about COBRA health insurance.

(Photo credit: abraaten under CC 2.0)