In all but a handful of states, if you have a pre-existing medical condition, you’re going to have a hard time buying individual insurance. You might get turned down completely, or be charged very high premiums and probably also have to wait as long as a year (paying those very high premiums the whole time) before the health plan covers your condition’s treatment.  On the Consumer Reports Health Blog, Michael Miano shares how his insurance company disqualified him from coverage,

“When Michael Miano, 61, of Abingdon, Va., first sought to buy individual insurance in 2003 after leaving a federal regulatory position and exhausting his COBRA benefits, he was distressed to learn that he was uninsurable.” I’ve been diagnosed with diabetes but I’m perfectly healthy,” he says. “I follow a strict diet. I’m not overweight and I walk 20 miles a week. I check my glucose levels regularly. I take oral medication, and my diabetes is completely under control.”

His problems result from the practice called medical underwriting. It’s illegal nationwide for insurers to discriminate against people in group plans on the basis of their health. But in all but a handful of states, medical underwriting for individual plans is allowed.”

Whether you can get an individual health insurance policy, and how much you’ll have to pay for it, depends largely on your state’s laws and regulations. Some states allow medical underwriting, a practice in which insurers can reject people with illnesses, exclude specific conditions from coverage, and charge people with health issues much higher premiums. Other states outlaw medical underwriting. You can research your state’s rules at www.healthinsuranceinfo.net, maintained by the Georgetown University Health Policy Institute.
Full Text of Michael Miano’s story:

Disqualified for Individual Health Insurance

Consumer Reports: Health Blog, Cover America.
When Michael Miano, 61, of Abingdon, Va., first sought to buy individual insurance in 2003 after leaving a federal regulatory position and exhausting his COBRA benefits, he was distressed to learn that he was uninsurable.

“I’ve been diagnosed with diabetes but I’m perfectly healthy,” he says. “I follow a strict diet. I’m not overweight and I walk 20 miles a week. I check my glucose levels regularly. I take oral medication, and my diabetes is completely under control.”

His problems result from the practice called medical underwriting. It’s illegal nationwide for insurers to discriminate against people in group plans on the basis of their health. But in all but a handful of states, medical underwriting for individual plans is allowed. Here’s how it works:

If you want an individual policy, you must fill out a detailed health-history questionnaire and might be asked to submit the results of a recent physical exam or have blood or urine tests. The insurance company might look up your prescription records in the databases of pharmacy benefit management companies.

If the company doesn’t like what it sees, in many states, it can flatly turn you down, quote you a much higher premium, or offer you insurance that covers everything except the health conditions it doesn’t like. Applicants for individual health insurance quickly learn that although they consider themselves healthy, insurers may not.

Health Net, for instance, lists “diabetes, once diagnosed, all treatments” on its list of “declinable conditions.” Diabetes is one of a lengthy list of conditions that will automatically get you into state high-risk pools, special insurance products maintained by 34 states for people who can’t find themselves disqualified for individual health insurance on the open market.

“It sounds harsh, but insurance is an actuarial science that looks at the likelihood of something happening and what the cost will be,” says Janet Trautwein, chief executive officer of the National Association of Health Underwriters. “When a diabetic does have complications, they are unbelievably expensive, and that’s why a diabetic is always turned down, even if they’re running marathons.”

But conditions that most lay people would consider less serious than diabetes will also get you disqualified for individual health insurance. PacifiCare may decline anyone who takes prescription medications for high blood pressure, acid reflux, asthma, migraines, arthritis, or depression. Aetna won’t insure anyone who’s had a hip or knee replacement.

Even in states that allow medical underwriting, the federal Health Insurance Portability and Accountability Act (HIPAA) provides some protection if you are switching from job-based group coverage to the individual market even if you have a medical condition that would make it impossible to pass medical underwriting.
To exercise your HIPAA rights, you first have to exhaust all job-based coverage available to you, including COBRA, which allows you to continue in your employer’s plan for 18 months by paying the full cost plus 2 percent. Then you have to apply for an individual health insurance policy within 63 days after your old coverage ends. Every state has to make sure there is at least one individual health insurance policy available to you that has to accept you regardless of your health status and without waiting periods for pre-existing conditions.

Under Federal law, all consumers are entitled to an annual copy of their medical report files from the nationwide specialty consumer reporting agencies.

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