Buying health insurance when you are self-employed, pre-Medicare, or temporarily jobless.
The healthcare debate rages on… will the Obama administration succeed where the Clinton Administration failed? Will the new healthcare system cost you more or less?
Too soon to tell, says this fee only financial planner.
In the meantime, if you’re an individual looking for insurance there are a few critical things you need to know. Once you leave a group insurance policy, (including Cobra) within which the government prohibits discrimination against people by age or health condition, all bets are off. You will be “underwritten,” which means that an insurance company only offers you coverage if they think they’ll get more from you in premium than they’ll pay in claims (may sound cynical, but true.)
If you can plan ahead for the underwriting process you are fortunate. Most people look for individual insurance when they: 1. retire early and know Cobra will run out before Medicare kicks in. 2. decide to quit their job with health benefits to start a business or freelance. 3. lose their job or a spouse with coverage loses his or her job. Two out of three of these situations allow for advance planning.
What measures can you take to improve your insurability?
1. Ask your doctor to review your medical records for accuracy.
Human errors happen, a condition you have been treated for may have improved, a code may have been applied to your record to get insurance coverage – you’ll want to get these kinds of discrepancies updated and corrected on your medical records.
2. Order your MIB report (Medical Insurance Bureau report).
This report is the healthcare equivalent of a credit report. Instead of tracking your bill paying ability, it tracks your medical history. The data is created by previous insurance carriers – the very same folks with whom you have applied for individually underwritten life, health or disability insurance. The insurance carriers use 230 codes to report your health conditions such as high blood pressure, asthma, diabetes or depression, and lifestyle choices such as smoking or high risk activities (sky diving). Review it and make sure any errors are corrected. It’s free once a year.
3. Chronic illnesses cost more. Work with a doctor to get your weight, blood pressure or diabetes under control. Start an exercise program and make healthier food choices.
How do you go about shopping for individual health insurance?
1. You can go directly to health insurance companies but my advice, especially if you have a chronic health condition is to use a “non-captive” health insurance agent or broker-one that does not work directly for an insurance company.
2. If you do have a chronic health condition, make sure the agent you choose has expertise in getting insurance for people with your condition.
3. Health insurance agents are paid and incentivized in many ways. Learn and understand the ways they are compensated. It’s not always transparent. Ask the questions and insist on answers.
4.If you need help, find a financial advisor that will guide you through the process, many financial planners offer health care planning as part of their comprehensive financial planning services.
Though these proactive steps may seem like a lot of work, they can save you money. And, best of all, they might get you the insurance you deserve.