However, if lose your job, you may find yourself without coverage or the ability to regain it.
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) allows a worker to pay for his/her own insurance for up to 18 months after the loss of a job. However, the average premiums are costly—$375 a month for individuals and an average of $885 monthly for families.
On March 2, the American Recovery and Reinvestment Act of 2009 (ARRA), as amended by the Temporary Extension Act of 2010, allows a worker who was involuntarily terminated between Sept. 1, 2008, and March 31, 2010, to pay 35 percent of the COBRA premium. The premium reduction applies to periods of health coverage that began on or after Feb. 17, 2009, and lasts for up to 15 months.
Katie McMillan was eventually denied medical insurance due her “history” after an auto collision in January.
The recently enacted federal healthcare overhaul will prohibit most of the egregious practices of health insurance companies, but most of the benefits will not take effect until 2014. Until then, those who lose jobs for whatever reason may find themselves without coverage.
Hawai‘i Insurance Commissioner J.P. Schmidt said that until then, health insurance companies are free to do whatever they please regarding coverage for individuals. Insurance companies must submit their rates to the state for approval, but they can deny any individual coverage—for any reason.
Although the provision for children begins immediately—children who have insurance can’t be denied coverage for pre-existing conditions—the same provision for adults won’t be in effect for four more years.
Until then, cases of insurance denial due to pre-existing conditions will continue.
One such case involves Katie McMillan, the former director of marketing for the University of Hawai‘i Maui College. She suffered minor injuries in a head-on collision with a drunk driver in early January of this year. Although she was not seriously injured, she was transported to the emergency room. She experienced residual back and neck pain from the accident and was under the care of a doctor and a physical therapist.
When she returned to work, she found sitting at a computer to be too uncomfortable. She decided to become self-employed. She applied for healthcare coverage at Kaiser Permanente, her health insurer for the last three years.
Although McMillan said she was in excellent health prior to the accident, Kaiser rejected her, claiming that it was because she had been to the emergency room in the last 12 months, was under a doctor’s care in the last 12 months, and has a “history of back or neck pain or injury currently under treatment or controlled with medications.”
When she called for an explanation, she was told, “If you answer ‘yes’ to any of the questions on the application, you will be denied.”
“I survived a head-on 80-mph impact, but it looks as if I am no match for the broken… inefficient system that is called health insurance in America,” said McMillan. “I truly feel for those who actually need long-term medical treatments. Who is health insurance actually for?”
“An applicant’s health status is reviewed, and sometimes they are asked to submit their medical records to determine eligibility,” said Hawai‘i Medical Service Association (HMSA) Public Information Coordinator Charles Marshall. “This is necessary because issuing individual plans can be a risky business—that is, a person might seek coverage for a few months just to get a certain procedure performed and then drop coverage afterward. In these cases, their monthly dues wouldn’t cover the health benefits they received. So doing a review of health status prior to issuing a plan is an important safeguard when it comes to offering individual plans.”
According to Lynn Kenton of Kaiser Permanente, between December 2008 and December 2009, members who chose individual plans increased from 12,880 to 14,120 statewide.
In 2008, the Hawai‘i State Legislature mandated that sole proprietors who have excise tax licenses be treated like small businesses regarding health insurance. This means that individuals can get better rates, and the law prohibits the insurer from excluding them for any pre-existing condition. Sole proprietors are eligible for this insurance for 30 days after a “qualifying event”—the date of issuance of a general excise tax license, the loss of a job, a reduction in hours of work, or the exhaustion of the federal COBRA that results in a loss of healthcare coverage.
In order to address the concerns Marshall raised, anyone who drops their coverage is prohibited from reapplying for health insurance for one year. After that, the insurer does not have to re-enroll the self-employed person until the regular enrollment period.
Beginning in 2014, the recently passed healthcare bill will cover millions of people who face the choice of paying for their healthcare out-of-pocket or continue doing what so many Americans have been doing: going without healthcare.
However, if Republicans in Congress successfully repeal this bill, these changes to cover the uninsured will never occur.