Health Insurance for the Sick

1
Health Insurance for the Sick
Holly Whelan, MPA Health Action 2006
Conference Washington, D.C. January 27, 2006
2
Health Insurance For The Sick

• Health insurance options available when losing
  job-based coverage
• Basics of each program
• What actions states have taken to help consumers
  obtain and keep health insurance when job-based
  coverage ends

3
Health Insurance For The Sick

• For a person with a serious illness like
  diabetes, HIV/AIDS, cancer, multiple sclerosis,
  etc., obtaining health insurance coverage after
  losing job-based insurance is not easy
• Why?

4
The Three As

• Access is it available?
• Medical underwriting excludes those who need it
  most.
• Affordability can people with serious illnesses
  afford it?
• Adequacy does it cover the needs of those with
  serious health care concerns?

5
What Happens When You Lose Health Insurance
Coverage?

• If losing job-based coverage
• COBRA
• State Continuation Coverage
• HIPAA
• Conversion Coverage
• State high-risk pool
• Individual policy
• Other job-based coverage

6
COBRA

• Available to employees of businesses with more
  than 20 workers
• Certain groups are exempt (churches,
  church-affiliated orgs, etc)
• Costs can be prohibitive full cost plus 2
  administration fee
• Health benefits are exactly the same as they were
  as an employee

7
COBRA What States Have Done

• Massachusetts
• Will pay for 60 of the cost of COBRA if you are
  eligible for unemployment benefits

8
State Continuation Coverage

• Available in 41 states
• Applies to employees of businesses with less than
  20 workers
• Workers must have been covered under the employer
  group health plan for a set period of time to
  become eligible (varies per state)
• Cost prohibitive - full cost plus an
  administration fee
• Benefits may be the same as when employed, but
  can vary

9
State Continuation Coverage What States Have
Done

• States that do not offer continuation coverage
• AK, AL, AZ, DE, ID, IN, MI, NJ, PA, VA, WA
• Some states offer continuation coverage for an
  extended period of time (18-36 months)
• CA, CO, CT, FL, IL (if divorced or widowed), KY,
  MD, MA, MN, NV, NH, NY, NC, ND (for annulment or
  divorce), RI (except for disability), SD, TX
  (except termination of coverage), WV, WI

10
HIPAA

• Must have had 18 months of prior group coverage
  and used up any COBRA or state continuation
  coverage
• Options vary greatly among states (individual
  policies, high-risk pool, etc)
• Cost-prohibitive based on state limitations
• Benefits available can vary based on type of
  coverage and state limits

11
HIPAA What States Have Done

• States that do not require HIPAA-eligible
  individuals into state-high risk pool
• AZ, CA, DC, DE, FL, GA, HI, ID, ME, MA, MI, MN
  (some), MO (some), NV, NJ, NM, NY, NC, OH, OR
  (some), PA, RI, TN, VT, VA, WA, WV
• States requiring greater benefits than HIPAA
  standard policies
• FL (some), GA (some), ID, ME, MA, MI, MN, MT, NV,
  NJ, NM (some), NY, OH (some), OR, PA, VT, VA

12
Conversion Coverage

• When leaving a fully-insured group health plan,
  some states allow employees to convert their
  coverage to an individual policy.
• Approximately 38 states offer conversion
  coverage, though variation occurs in what must be
  offered, etc.
• Cost-prohibitive
• Benefits vary greatly though in some states
  coverage is similar to what was available as an
  employee

13
Conversion Coverage What States Have Done

• States that do not offer conversion coverage
• AL, AR, DE, HI, LA, ME, MA, MS, NE, OR, SD, TX
• States that allow more than 30 days to elect
  conversion coverage
• CA, FL, NY, SC, UT
• States without a minimum prior length of coverage
  requirement
• AZ, AR, CT, ID, MN, NJ, NM, NC, ND, OK, SC, VT,
  VA, WA

14
State High Risk-Pool Coverage

• Over 30 states have established high-risk pools,
  though they are underutilized
• Pre-existing condition waiting periods vary (3
  months -12 months)
• Cost prohibitive most common reason why
  high-risk pool coverage not purchased by people
  with diabetes (ADA and Georgetown, 2004).
• Benefits vary, but coverage can be limited

15
State High-Risk Pools What States Have Done

• Maryland
• Eliminated pre-existing condition waiting period
• Reduced monthly premium to make coverage more
  affordable
• Montana
• Instituted high-risk pool subsidy for those who
  meet income guidelines (currently closed)
• Alabama and South Dakota
• Only accept individuals into high-risk pool who
  are HIPAA-eligible

16
Individual Health Insurance Policies

• Most states allow insurers to turn people down
  for individual coverage based on the status of
  their health
• Individuals with chronic illnesses are negatively
  affected
• Policies can be expensive if available
• Coverage may not include all of the health care
  needs of an individual, though mandated benefits
  must be covered

17
Individual Health Insurance Policies What
States Have Done

• States without medical underwriting
• NY, NJ, MA, VT, ME
• MI, PA, VA, NC, DC for Blue Cross policies
• No rating limits in VA, NC, DC

18
Additional Resources

• American Diabetes Association
• www.diabetes.org/statehealthinsurance
• Georgetown University Health Policy Institute
• www.healthinsuranceinfo.net