Health Insurance

I have some health issues; is that a problem?

All health insurance is medically underwritten and the application will ask you to provide your health history. Insurance companies can decline an individual application due to health history. It is the practice of insurance companies to verify all health history on the first claim (send letters to your physicians, providers) so it is important to be thorough on your application. I have seen insurance companies refund all premiums paid after many months in an insurance plan at the first claim due to inadequate disclosure of preexisting conditions in the application. After two years in the insurance plan the law protects insured’s against termination accept for premeditated fraud.

Will my premiums increase?

Yes. Premiums are originally determined in accordance with your age, general health, and zip code. The rates will go up with your age; the rates adjust periodically due to medical inflation; the rates can adjust due to mandated State and Federal regulatory changes. Generally, you can expect an annual increase. If you are in good health, it is a good idea to shop your medical insurance plan every 3-5 years to see if you can lower your cost.

Do health insurance plans have preexisting conditions clauses?

Yes, all I know of. Generally, they are written as follows: “…any health condition you have had treated or have been aware of in the last 6 months will not be claimable during the next 12 months”. Many plans allow a no preexisting claim clause change from one plan to another as long as there is no more than a 60 day gap in coverage. Not all do, however. Check these issues carefully.

Does individual health insurance cover maternity?

Very few individual health insurance plans cover maternity and those that do have a very restricted benefit for the first few years, usually increased by year. Their premiums are considerably higher, if you add the maternity rider, and generally, it doesn’t make financial sense to purchase the coverage. The State regulations require that all individual insurance plans cover emergency/life threatening medical procedures related to pregnancies so C-sections are covered for the medical expenses for the mother even without the maternity rider. Prenatal and well baby care medical expenses are not covered under these emergency/life threatening regulations. Also, new borns, regardless of their health, are protected and insured as long as they are added to the policy within 30 days of birth.

Are all individual health insurance plans the same?

No! You have to be very careful in choosing an insurance plan. Generally, if an insurance plan is called a “Major” medical insurance plan its benefits will be comprehensive. However, there are many individual health insurance plans available that have limited benefits and will only cover up to limited amounts (hospital per day amounts, surgery schedules, max benefits per year or per policy, etc.). Additionally, the limited insurance plans may not cover some things you wouldn’t even think about when you are healthy. It is very important to get the help of a trained, experienced, trusted agent.

What are Health Savings Accounts or HSA’s?

There are high deductible health insurance plans available that lower cost and can be set up under income tax favorable programs called Health Savings Accounts or HSA’s. These plans allow you to deposit up to your deductible amount each year to a qualified savings account and then deduct your deposit amount from your taxable income (like an IRA deposit). Then you pay your medical expenses out of the HSA account, up to your deductble, with tax free funds. If your tax rate is 25% then you are saving 25% on your medical bills.

You can carry/continue your HSA balance forward your entire life and use it for future copays, deductibles as required, even if you are currently in a group medical insurance plan or even Medicare. You will not be able to add to it if you are not currently in a qualified HSA medical insurance plan. Additionally, there are many IRS tax qualified medical expenses that are eligible for payment out of your HSA that are not health insurance eligible/claimable expenses. For example, dental expenses, vision exams, eyeglasses and contacts, shoe arch inserts, and many others are eligible HSA expenses.