What to Do When Your Health Insurance Runs Out

By Leah Ariniello
Special to The Washington Post
Sunday, June 22, 2008

Just when you thought your biggest hassle in life wouldn't amount to much more than determining whether you should watch a "CSI" rerun or a highly edited version of "Pirates of the Caribbean," change happens.

Perhaps you've graduated from college and your parents are cutting the strings. Maybe your performance review tanked and you are about to get axed from your job. Or, out of a soap opera, you uncovered a spouse's cheating ways and have resolved to give him or her the boot.

In addition to the obvious drama that graduation, job loss or divorce can bring, you find out that the life change will also cause you to lose your health insurance.

The good news? No, you can't crash on our couch until the turmoil subsides. But we do have your back on the health insurance front. Read on to find out about some options; you might be surprised at what's out there.

Option

1. GET A JOB WITH BENEFITS. Obviously, finding a job with decent health benefits is often worth the trouble. "Employers that offer good coverage by and large will pay the lion's share of the premiums on your behalf," says health insurance expert Karen Pollitz of Georgetown University. "You're probably not going to find a better deal than that."

But what if you have dreams of becoming a rock star and no singing gigs come with health benefits? Should you put your career aspirations on the back burner just to get your doctor bills covered? Jennifer Regan, 28, found a way to do both after her college graduation when she was about to get kicked off her parents' health plan.

"I got out of school and had a degree in theater production, which is lots of fun, but I needed a job that was going to give me health benefits and some stability," says the Middletown resident. Her solution was to work at Starbucks, which provides flexible hours and health benefits to part-timers. As a barista in the District, she made coffee drinks in the morning for about 20 hours a week, and in the afternoon and evening she worked contract jobs with theater companies.

If you don't have the patience for the extra-hot-skinny-half-caf-venti-latte crowd, do some more digging. Other part-timers who receive health benefits include employees at FedEx Express, the retailer REI and the crossing guards for Montgomery County Public Schools. And remember that employment-based health plans are a particular boon to people with health problems. Under the federal Health Insurance Portability and Accountability Act (HIPAA), an employer that provides health benefits generally can't deny coverage or charge you more because of poor health.

For information on HIPAA, visit http://www.dol.gov/ebsa/publications/yhphipaa.html.

Option

2. Extend Existing Coverage. If you are going to lose health coverage from an employment-based plan, either through your job, a spouse's job or a parent's job, ask if you are eligible for COBRA or state continuation coverage, which extend your coverage for a limited time while you figure out a game plan. You need to act quickly, though, because this option is on the table for a short time.

The downside? COBRA (the better-known name of the Comprehensive Omnibus Budget Reconciliation Act) and state continuation coverage can induce a severe case of sticker shock. Your employer probably paid a chunk of your premiums in the past, but with continuation coverage you'll probably have to pony up for all the premiums and an administrative fee.

For information on COBRA, call the Employee Benefits Security Administration at 866-444-EBSA or visit http://www.dol.gov/ebsa (click on " FAQs on COBRA Health Coverage").

For information on state continuation coverage, contact your state's insurance department. Find contact information at http://www.naic.org (click on " NAIC States & Jurisdictions").

Option

3. Buy a Long-Term Plan. You can get preliminary quotes in a matter of minutes from Web sites that work with a number of health insurance companies, such as eHealthInsurance Services ( http://www.ehealthinsurance.com), as well as some insurers' home

pages.

But for those who prefer more guidance, a licensed agent can help. Good agents can help you sort through options, and their fees are usually built into plan costs.

If you decide to buy a private plan, keep in mind that the benefits might be limited compared with an employer's plan. The plans might not include maternity care, for example, or could have skimpy coverage for prescriptions.

"The drug benefit is limited sometimes to $1,500 a year, but there are some drugs that cost $1,500 a month," says Dave Dixon, an agent at Early, Cassidy & Schilling in Rockville.

You'll want to read the fine print of any policy. Make sure you know what's covered and what's not. Also confirm that the policy will renew regardless of changes in your health as long as you pay your premiums on time.

"Read the exclusions very carefully. Read the benefits," says Brenda Wilson of the Maryland Insurance Administration. "A lot of times in the complaints that come up, a person's coverage has been very clear, it's just that they didn't take the time to read it."

If you have poor health, there can be a catch: Insurers can decline to offer you a policy, exclude coverage for certain conditions or charge you high premiums. Those with serious conditions such as HIV, cancer or diabetes, as well as those with common conditions such as obesity, can feel the snub.

"In the past four or five years, I've had people turned down just because of height and weight," says Jerry Patt, an independent agent in Gaithersburg who has been in the business for more than 35 years. "They could be having no medical problems whatsoever, but their build was not acceptable."

For links to online insurance companies, go to http://www.ahip.org (click on "Consumer Information," then " Health Insurance Plan Links").

For local agents, try the National Association of Health Underwriters site at http://www.nahu.org (click on "Consumer Information," then " Find an Agent").

Option

4. Buy a Short-Term Plan. As the name indicates, these policies provide coverage for a short time, often six to 12 months. "The benefit is they're inexpensive," says Rob Poli, chief operating officer of Insurance Marketing Center in Rockville.

Short-term policies might be a good alternative to such options as COBRA if you are healthy and willing to gamble that you won't have a problem getting insurance when it ends. (If you get sick and go back to the insurer for another policy, the company could decline to sell you one.)

In addition, you can get these plans quickly. "Usually you just need to answer a couple of questions, and then [the policy] can be turned around in a couple of days," says Nicole Aschbrenner, owner of Insurance Coverage Specialists in Clarksburg. Approval for longer plans can take six or more weeks, she says.

The same resources that provide traditional policies, such as eHealthInsurance Services and licensed agents, can also help you find a short-term one.

Option

5. Buy a Plan Via an Association. If you're a member of a professional association or alumni organization, you could see if it offers good deals on health policies. It's possible, for example, for an association based in another state to offer a policy that costs less than what you'd find where you live. Keep in mind, though, that the lower rate is probably due to the out-of-state plan having fewer benefit requirements than plans in your home state.

The downside? You could get scammed. "An individual has to be exceptionally vigilant when purchasing [a health policy] through an association and make sure that the association and the health plan and the agent selling it are legitimate," says Jessica Waltman of the National Association of Health Underwriters. "There's a huge problem with people setting up sham associations."

For help, call the state insurance department and ask whether complaints have been filed against the plan.

Option

6. Find a Safety Net. If you're experiencing a hardship such as poor health or low income, you might be able to gain coverage through a safety net. These options can vary depending on where you live. For example, some sick Marylanders can buy coverage through the Maryland Health Insurance Plan.

D.C. and Northern Virginia residents have a different option: Those who cannot get coverage from commercial health insurance companies because of illness can access a policy through CareFirst BlueCross BlueShield, though it can be expensive.

There also are programs aimed at those with low incomes, as well as those such as Medicare, which could help you if you are 65 or older, or younger than 65 but disabled or have a serious kidney problem.

The bad news is that it can be difficult to find out what help is available for your specific situation. The state insurance guides prepared by Georgetown University's Health Policy Institute are one good resource. Also check with your state's insurance department.

For information on the Maryland Health Insurance Plan: http://www.marylandhealthinsuranceplan.state.md.us.

For CareFirst BlueCross BlueShield:866-241-6442.

For Georgetown University's Health Policy Institute: http://www.healthinsuranceinfo.net.

For Medicare:800-MEDICARE or http://www.medicare.gov.

Questions to Ask

Health plans can vary drastically. Here are some questions you can ask to help clarify your cost and coverage. Also check with your state or city insurance department for assistance: In the District, call 202-727-8000; Maryland, 800-492-6116; Virginia, 877-310-6560.

· What are the premium costs, and how much will they increase upon renewal? (These are fees you pay, typically monthly, to have a policy.)

· How much is the deductible? (This is the amount you might have to pay each year before the health plan contributes.)

· Will I have co-payments? (These are flat fees paid when you visit a doctor.)

· Will I have to pay coinsurance? Is the amount capped? (This is a percentage of your medical costs.)

· What is the lifetime limit of the policy, or the maximum amount it will pay?

· How does the plan cover prescription drugs?

· What exact services are covered? For example, does the plan cover routine doctor visits and wellness checkups, emergency room care, home health care, mental health care, dental care, eye care, maternity care, infertility treatments and alternative therapies such as acupuncture?

· What are the exclusions? Determine whether the plan covers any medical problems you have and whether it will cover the problems right away or after a waiting period.

· If I keep my current doctors, will I be covered?

· What is the cancellation policy?

-- L.A.