Lessons for Getting Individual Health Insurance Coverage

This blog has become a little less about open source for lawyers and legal professionals, in the strictest sense, and more about my own struggles as a laid off individual turned entrepreneur. I have been applying the philosophy of open source to this blog, and on all fronts, it remains a WorkInProgress. One thing about blogging is that you can easily shift it to apply to any given situation, such as unemployment and the myriad of challenges people don’t tell you about, let alone offer any kind of guidance on how to overcome them, other than to simply press on.

One of those challenges is obtaining health care coverage. You may recall my previous post on denial of coverage, and the absurdity of “pre-existing conditions.” I had about given up, holding onto a thin thread of hope that the government would pass health care reform that, among other things, might stream line the application process. I find it difficult to believe that 30 million or so Americans will be given health coverage without a simplified health insurance application process. Silly me. Congress is not interested in bringing down the cost of health care by streamlining the ridiculous application process. It’d rather demand the adoption of electronic medical records, which is a good idea but will not solve the problem.

Congress is still haggling over health care reform. Sure, the House has passed its bill and the Senate seems intent to pass its own before the year is over, but the two still have to be reconciled and then that rather innocuous word, “implementation,” must occur. No one seems to know how long that will take.

So for those of you who find yourself staring at the end of your COBRA coverage, or are otherwise on the hunt for health insurance but have struck out much like myself, I offer some advice that helped me obtain coverage:

  1. Do not apply for an individual plan, or a health plan, with whatever health insurance company you currently have through COBRA
  2. Find a good health insurance broker, either through a family member, family friend or other trusted source
  3. Apply for coverage under whatever state program is offered

Find a Different Insurance Company

The logic that switching from COBRA to an individual plan with the same insurance company  will be easy and simplify things is poor logic. I learned this one the hard way, so let me explain.

When you apply for an individual plan, or a different plan than the one you had through your employer or COBRA, you effectively become a new “customer.” However, you are a new “customer” with a history, so the insurance company has a wealth of information it can sift through to find any reason, however mild, to deny coverage. The forms requesting permission to obtain medical records is merely a formality, in case there is a challenge. You are better off applying for a plan with a different insurance company.

Do some research, especially since plans vary widely by state. Check consumer watch websites, too. Though few people have anything good to say about health insurance companies, you’ll get an idea of what people have to say, which is likely to be more honest than what you find on the corporate websites. Also talk to family, friends and others about their health insurance coverage. Had I done so, I would not have applied for an individual plan with the same company I had for the past 4 years. I wasn’t a fan of it, to be sure. The best health insurance plan I ever had was with a Taiwanese container shipping company, and which I fully understand I may never get again. But, at the time, it seemed better to go with the devil I knew than venture out into the unknown. That was foolish. So even though it may be a hassle, and it will all start to sound the same, shop around.

And shopping around brings me to point #2: find a good health insurance broker.

Find a Good Health Insurance Broker

I’m was skeptical about using an insurance broker. I looked into it briefly, and found information for and against but not enough to persuade me to find one. I was a bit stumped on how to find a good one, too. If I call them up, they’ll give me some song and dance sales pitch. I’m not interested in a sales pitch. I’m interested in results. And who is to say the broker won’t cut and run when the deal is done?

So I continued on my way, working my way through various applications and applying for coverage through the state as well.

The questionnaires were endless, asking for every little medical detail. I discovered that if you were still covered, they only asked for information going back five years. When I applied after my coverage had expired, meaning I was not covered, they asked for information going back 10 years. It was starting to make more sense to wait for Congress to get its act together and pass some semblance of health care reform, or apply for the state plan.

Then I got an email from my uncle, who recommended an insurance broker whom he had used before, and recommended to others. I thought it a kind gesture, but didn’t think much of it. I was starting to question whether I really needed health insurance at all. There was no pressing need. Except that accidents happen, and I cannot shake the logic that the point of insurance is to guard against accidents. And the accident that always pops into my head is the “bus incident” that wasn’t as bad as it could have been, but who is to say the next accident, sans-bus or otherwise, will turn out that way?

So I called the broker, explained my situation which he said was common these days. That was surprising, but what was surprising was the application process. The number of questions was considerably diminished, and when I was contacted for more information, it was via phone. There wasn’t a separate mountain of permission forms to sign; just a series of questions to further enlighten the new insurance company. However, there was a difference in tone.

When I had called up my now former insurance company to switch to an individual plan, the woman on the phone was cheery and confident that I’d be approved. Nothing raised red flags, which at the time struck me as odd and later was infuriating. Clearly my former insurance company needs to change its in-take process as red flags should have stopped my application cold.

The tone was quite different with this broker application process. The representative asked similar questions, requested clarification of claims but did it in a manner that seemed to imply a genuine desire to help, or a deep understanding of insurance company processes and how best to present information to achieve an objective. Granted, that may or may not be true, I really have no way of knowing. But I do know that the approach was decidedly different, the response much faster and the overall experience less frustrating.

Still, there was no guarantee, so I decided to cover all the bases and submit my application or the state plan.

Apply for State Health Insurance

State health insurance is no less bureaucratic than private health insurance, and it is much more expensive, at least in Illinois. However, they’re rules are a little less strict, so more people can be covered. It was the least desirable, but with options dwindling, I bit the bullet and sent in my application. Apparently I forgot to answer one question. It had to do with whether or not my parents have health insurance and whether or not I am eligible to be covered under their plan. Since I am over the eligibility age of their plan, I didn’t think the question applied to me. Even the phone call I got about the question said I was over the age, but I still had to answer it anyway.

And then there was this interesting little piece.

Under “employment,” I said was “self employed” since, well, I am. Turns out that you have to send in a letter, on your “corporate letter head,”stating that you do not offer yourself health insurance coverage. Sounds silly to me. If I provided health insurance, why would I be applying for state coverage? After some thought, though, I can understand. Budgets are tight all around so they want to provide coverage to those that absolutely cannot get it anywhere else.

I was working on fulfilling a couple other requirements to complete my state application when I receive a surprise email: my health insurance application had been accepted and I had been granted coverage. That was followed by an email from the insurance broker, confirming my health coverage. So I stopped my state health insurance application.

Final Thought(s)

There is no doubt that the health insurance industry is a mess, and I’m skeptical that any reform out of Washington will address it in any meaningful manner. Of course, that is predicated on the assumption that health care reform passes.

So if you find yourself staring at the COBRA finish line, and still want health insurance, I suggest finding a broker through a family member, friend or other trusted source, and applying for state health insurance in the mean time, if your state offers a health insurance plan. Speaking from experience, it is a relief to have some coverage. One less thing to worry about as the “what ifs” shrink, and create space for other, happier things.

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