Recently, I had occasion to work with a nice lady whose COBRA benefits were about to expire. Unfortunately, she has a number of health conditions that render her uninsurable in the individually-underwritten market.
What to do…
There were three choices, really: transition from COBRA to HIPAA, purchase a limited benefit but guaranteed issue plan, or go naked uninsured. She came to me with about two weeks left before COBRA ran out.
BTW, you may be thinking that a Short Term Medical plan would have bought her some time. Unfortunately, before she came to me, she had applied, and been declined, for an individual medical plan. STM plans, as a rule, are not available to those who have been declined for coverage for health reasons.
In any case, the premiums for a HIPAA plan for her run between $1,000 and $1,300 a month, depending on benefits. The guaranteed issue plan runs about $180. No brainer, right?
Not quite.
True, the guaranteed issue plan would save her $10,000 to $13,000 per year. But, the benefits are quite limited, and a major claim could easily wipe out those savings, and then some. Likewise, foregoing insurance altogether didn’t appeal, either.
This is one of those cases that, although we were able to help, still felt vaguely dissatisfying. I would have preferred to find a solution which encompassed a high deductible (to generate cost savings) PLUS a cap on out-of-pocket (to provide a safety net). Because of her health, this wasn’t an option.
Oh, almost forgot: ultimately, she chose to go with one of the HIPAA plans; in this case, the “less expensive” one. Was that the right choice?
You tell me…
The only way to ever know if she made the right choice is when she has a claim. Everyone has a wonderful policy until a claim isn't paid . . . then they want someone's head on a stick.
ReplyDeleteThat is the only way to explain why some folks buy limited benefit policies and (God forbid) medical discount plans. They think they can't afford a "real" plan.
But as I explained to a lady yesterday, you can pay it now or pay it later. (OK, I think I feel a blog coming on . . .).
She INSISTED she could not afford $150 per month for coverage. But she owns 2 businesses, a home, a car and has "some" money in the bank to pay for doctors.
When she has a medical crisis she will be treated. But the docs and hospital want to be paid and they WILL come after her.
And her bank account . . .
And her car . . .
And her house . . .
And her business . . .
Sure, we wish there were better options but at least you have a client who is a responsible adult.