Coverage options

To say health insurance is a critical component of your life is an understatement.
One major illness is all it takes to devastate your personal finances, so not having health insurance leaves you dangerously exposed.
But millions of people have lost their jobs in recent years, and with that, their health insurance.
“It’s a big financial hit when you lose your job and you had health benefits with it,” said Sara Collins, vice president for affordable health insurance at the Commonwealth Fund, a private foundation that promotes improvements in the health care system.
For some, being added to the health insurance plan of your spouse or partner – if the employer offers it – may be a solution.
But if that’s not possible, here are some options:
COBRA
COBRA is the federal law that allows workers who lose their jobs to continue their employer’s health coverage for up to 18 months if they pay the monthly cost themselves.
COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, applies to people who were employed by a company with 20 or more workers that offers health insurance.
The advantage to COBRA, Collins said, is that “you’re paying at the group rate, rather than going on to the individual (health insurance) market, where you’re going to be underwritten and charged on the basis of yourself.”
But the cost still is formidable. Former employees must pay the full insurance premium, plus 2 percent to cover administrative expenses.
“The problem is when people lose their job, they’re also losing their income, so all of a sudden, you’re facing a full premium where your employer may have subsidized it at maybe 80 percent of the cost before you lost your job,” Collins said. “It’s a big financial hit when you lose your job and you had health benefits with it.”
DEPENDENT COVERAGE
The Patient Protection and Affordable Care Act, the federal health care law enacted in 2010, requires insurance companies that offer dependent health coverage to allow young adults up to age 26 to remain on a parent’s plan.
“If you’re a young adult and under age 26, find out whether your parents’ health plan covers dependent coverage, and if it does, then you can go on to that plan,” Collins said. “There are very few restrictions. You don’t have to be living at home. You can be married. It’s a really good option to look at.”
INDIVIDUAL INSURANCE
Another option is to apply for an individual health insurance policy.
“You will face the full premium,” Collins said. “You just have to be careful about looking at the details of your health policy to make sure that it covers the things that you need, what the deductible is, what the co-insurance rates are. The good thing is, because of health reform law, the plans will have to be somewhat more protective than they’ve been in the past.”
The Affordable Care Act requires all health plans to provide certain new protections, including prohibiting lifetime limits on benefits, dropping coverage when someone gets sick or when they previously made an unintentional mistake on an application.
PRE-EXISTING CONDITION
The health reform law also created the Pre-Existing Condition Insurance Plan to make health insurance available to consumers who’ve been denied coverage because of a pre-existing condition. Every state has a PCIP.
THE UNDERINSURED
Those fortunate enough to still have insurance may not have enough, so it’s important to check whether you’re underinsured.
“People really need to review their plan,” said Carrie McLean, consumer specialist at eHealthInsurance.com. “What happens is they buy a policy, they don’t understand what they’ve bought and then something happens, and that’s when they’re fully educated on what it covers and what it doesn’t.”
According to a recently released Cigna-GfK Roper survey, 30 percent of those surveyed said they had been surprised when a condition or procedure wasn’t covered by their health plan, or they had some other unexpected complication with their coverage.
Of this group, 49 percent said they feel like they missed important information when picking their plan.

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