Health Insurance for the Sick

Holly Whelan, MPA

Health Action 2006 Conference

Washington, D.C.

January 27, 2006

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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

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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?

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The Three A’s

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?

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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

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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

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COBRA – What States Have Done

Massachusetts Will pay for 60% of the cost of COBRA if

you are eligible for unemployment benefits

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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Additional Resources

American Diabetes Association www.diabetes.org/statehealthinsurance

Georgetown University Health Policy Institute www.healthinsuranceinfo.net