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Several years ago the Federal Government in the USA passed the
Kennedy/Kassenbaum Law. This law required insurance companies
to offer health
insurance coverage to US Citizens that met several conditions. If
the individual had been on group health insurance for 18 months, did
not have a gap of
more than 63 days in coverage between the end of his group coverage
and his application for HIPPA coverage, insurance companies were
required to offer
him coverage.
This is a wonderful benefit for a person who has major health
problems and would not otherwise be insurable. Without this option
many Americans would
not be able to get insurance at all.
But there are a few caveats. The companies that offered HIPAA
(Health Insurance Portability and Accountability Act) were allowed
to rate up the HIPAA
plans by 400 percent compared to their regular plans. Also, if the
person had not been on group insurance, they did not have to offer
coverage.
We have found that sometimes insurance companies will offer the
HIPAA coverage even if the person has not been on group coverage. We
have also
found that international health insurance companies will provide
COIs (Certificates of Insurance) explaining the dates a person
started and discontinued
group or individual insurance. We have found that individuals
seeking to go on HIPAA coverage have had little difficulty apart
from the rates.
I should also mention that companies seldom rate up their plans by
400 percent. Usually the increase is about 200 percent over standard
plans.
Always get a “Certificate of Insurance” when you discontinue a job
or lose your insurance. And make sure you apply for further coverage
right away. If you
exceed the 63-day window, they can refuse you coverage.
Underwriting – What is it?
Underwriting is no more than a process to determine if you are an
insurable risk. The people who do the research and make the
decisions about your
insurability are called underwriters. In a sense all of us do
underwriting every day, for it is no more than an evaluation of
risk. Every time you cross a street,
you underwrite the situation first by determining if you can get
across without being struck by a car. In other words, you determine
if there is any risk
involved.
Insurance is a business with a bottom line. When a person applies
for insurance, and has a medical condition, i.e., bone cancer in his
left foot that the
medical profession has been treating for ten years at a cost of
$3,000 a month, will an insurance company insure him with a premium
of $100? The
underwriter will look at the records, and if good reason indicates
that medical treatment will continue at $3,000 a month, the
insurance company would be
foolish to insure the individual. By so doing they would lose at
least $35,000 a year. If they insured many cases like that, they
would go bankrupt or have
sky-high premiums.
As a rule the companies with the tightest underwriting guidelines
have the best rates and are the best companies to insure you.
Because they are careful
who they insure, they will remain stable and be able to keep their
rates lower than average.
The underwriter has one task--to determine risk, to determine what
possible financial outlay may be necessary to care for a person's
medical condition. If
they calculate the possible outlay as excessive, the applicant is
declined medical coverage. You wouldn't insure a burning building;
likewise, underwriters
make sure that their companies do not insure us if it is certain
that we have a medical condition that might cause the company to
lose money.
When they do insure us, and we then develop medical problems, they
are required by law to cover our expenses. But the underwriters made
a decision
before the medical condition arose (or with the knowledge of a
present medical condition), that we were an insurable risk. |
