Securing coverage: It's nasty out there
Fabruary 22, 2008
WASHINGTON — Health care insurance is key to a family’s financial security, perhaps second only to a paycheck. For the vast majority of workers, medical coverage comes through an employer. But more employers, particularly smaller ones, say it is too expensive to provide health insurance for workers. As a result, a growing number of Americans are faced with buying coverage for themselves.
The insurance industry argues that most people who want policies can get them and that they will be adequate. Critics, however, contend that many people either are rejected for coverage or can’t afford it, and that those who do get a policy may find its protections very limited.
Although about 18 million Americans do buy insurance on their own, nearly 47 million have no insurance at all. (The rest are covered through their employers or under a government program such as Medicare for the elderly or Medicaid for the poor.)
At issue is what is called the individual medical insurance market. This is insurance bought one policy at a time from commercial carriers, and it differs in many important respects from the group market in which employers provide coverage to their workers and, with declining frequency, to retirees.
First, much of the group market involves companies, typically big ones, that insure themselves. In simplest terms, these employers agree to pay their employees’ health-care costs themselves and hire another company,
often an insurer, to administer the claims. Self-insured health care plans are regulated by a federal law, the Employee Retirement Income Security Act of 1974.
The individual market is regulated by the states, so requirements on insurers, consumer protections and policy offerings vary widely.
When individuals leave group plans, parts of two other federal laws may come into play: the Comprehensive Omnibus Budget Reconciliation Act of 1986, and the Health Insurance Portability and Accountability Act of 1996, known by their acronyms, COBRA and HIPAA.
Despite all those laws, millions of Americans cannot get insurance, either because they can't afford it or because they are rejected by carriers as too sick to insure.
Nonetheless, because a severe illness or injury can result in hundreds of thousands of dollars in medical bills, middle-class and even well-to-do families who do not have coverage through an employer need to try to get whatever protection they can.
If you don’t have an employer plan:
The first step is to begin educating yourself about the health insurance market in your state. A good place to start is a Web site run by the Georgetown University Health Policy Institute, Click on your state, and you can get summary information on consumer protections and what private insurers may and may not do.
Then think about what kind of insurance you need. In general, experts say, you should focus on protecting yourself against ruinous medical expenses and worry less about having your routine expenses paid.
“It’s better to buy comprehensive benefits with a high deductible as opposed to first-dollar (coverage) with limited benefits,” said Karen Pollitz, research professor at Georgetown’s Health Policy Institute.
You should also look for a policy that is renewable at your option. Many people, especially young adults expecting to take a job soon, buy temporary policies for, say, six months, figuring that’s all the coverage they’ll need. But this a risk.
“The problem with temporary policies is that they are temporary,” Pollitz said. “If you get a job, fine, but if you don’t, you are forced to renew. If you’ve had no claims, you can renew. . . . But it’s a six-month policy, and if you get hurt after four months, it pays the bills for two months. Then it’s not renewed . . . ”
References : http://www.chron.com/
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