INSURANCE:  RISK & RESPONSIBILITY - AND  A SHORT HISTORY

Health insurance was originally conceived as a business agreement between two entities: a healthy individual and a company (the Insurer) which would assume part of the financial responsibility (risk) for that individual's medical cost in the event that his health diminished. Because it is protecting you against a risk which has not yet occurred, insurance must be in place prior to its need for use.  As with any other type of insurance (life, car, disability, homeowner's - among others),  the emphasis is on protection in the event of unforeseen occurrences.

Any kind of personal protection requires responsibility and accountability: it is the individual's responsibility to seek the necessary protection for their life, their health (and that of their family), and their property. Just as you can't wait till you have a car accident to get car insurance, you likewise can't wait till you need health coverage to apply for it.  Even with the new laws, if one does not have coverage by the end of the annual enrollment period, or have a 'qualifying event' (i.e., loss of prior compliant coverage through no fault of their own or a change in legal status, such as a birth, adoption, divorce, major move, etc), they cannot apply for it until the next enrollment period. Almost without exception. We do work with auxiliary products that one can buy all year long, but - they do not cover pre-existing conditions and do not exempt one from the penalty.

Unfortunately,  when people are healthy, insurance is not a priority  as it has no  immediate impact on them. But when people discover that they need surgery or medical attention that they can't afford, they appreciate their insurance - if they have it - or claim that it's "unfair" that no one will cover them. This, of course, changed in 2013, with the Affordable Care Act (ACA), also known as "healthcare reform" or "Obamacare,"  the bulk of which began impacting the health insurance industry and its plans in 2014.

Again, it is still an issue of personal responsibility, not what's fair or unfair, reasonable or unreasonable, cheap or expensive. You cannot wait till the need arises to put a plan for protection in place. Individuals suddenly needing care that they have no coverage for will scramble to find a carrier who will take them - and, as the open enrollment may have already passed, it's unlikely they will be successful. As Arizona's high risk specialist for over 16 years, I encountered these panic-stricken, last-minute coverage hunts daily - and no one wants to be the bearer of bad news.

Some states had and still have guaranteed issue "high risk pools" (not to be confused with "portability" or HIPAA plans, which now has no reason to exist) whereby no one can be declined, providing he can show proof that he has been unable to obtain coverage anywhere else, and provided he can pay the premiums. Many can't. Where they exist, these plans differ from state to state: in some, you have a choice of medical providers; in others, you are relegated to the county hospital and its facilities. The need for high risk pools diminished in many states with the implementation of the Affordable Care Act.

I have been on both sides of the insurance issue. Years ago, it was easy to feel that everything was unfair when it turned out that I wasn't as healthy as I thought ("I'm healthy! What can happen?") and had to have surgery - minus insurance. It was easier to spend money on other things, always expecting that my job - the current one or the next one - would provide coverage. It wasn't so easy to pay for surgery, after all: in 1989, six days in the hospital for a surgery which took one hour, cost over $19,000. (With today's rates, that same surgery and hospital stay would cost over $90,000.)

If you work for a company which offers group coverage, that carrier cannot decline you or your health issues. With the advent of the ACA, mny small companies dropped their employee coverage due to cost.

Some plans - notably PPO or indemnity plans (as opposed to HMOs) would take an applicant with [certain] preexisting conditions and - depending on the severity of those concerns -  offer coverage with an "exclusion" on the particular preexisting condition or a possible increase in premium to cover the condtiion. This exclusion could last as little as 12 months or for the life of  the policy. As a general rule, HMO's either accepted the applicant with any and all preexisting conditions or declined coverage altogether - ergo, they had a high decline rate. And in Arizona, by 2013, there were only two carriers even offering HMO plans while in 2016, almost all do and the majority of plans offered are HMOs. PPOs or indemnity plans (the latter which we haven't seen for several years) could provide coverage to an individual but deny coverage for a specific condition. For the longest time, that was one of the major differences between managed and non-managed care. Going into 2017, there are no PPOs offered in Arizona unless they are part of an employer's group plan.

The state of Arizona had a program, with several health plan options, designed for small groups (two or more employees): Health Care Group of Arizona. This program, through the state, offered HMO coverage in select counties. They could not decline coverage, regardless of the preexisting condition, provided  the applicant met the conditions of employment. A 12 month exclusion rider could be placed on conditions, if no insurance had been in place prior to the new plan -  and certain conditions were simply not covered (transplants, mental health and most injectable drugs). These plans covered maternity after 12 months and, while they were not high risk plans, they adequately served a specific segment of the Arizona population. For an individual with medical conditions, who was truly self-employed, there were one or two other options available in the insurance market. For the self-employed person with no employees but a multitude of medical conditions, there was the Arizona Small Business Association; rates were not low but coverage was guaranteed. And then along came PCIP (Preexisting Condition Insurance Plan) in the summer of 2010, which served about 15 states (in lieu of a state high risk pool) and operated until February 15 2013 when it closed its doors to new applicants but continued to serve it's existing base, until February 2014. The Affordable Health Care Act (health care reform) kicked in on January 1 of that year and PCIP went away. Health Care Group of AZ and ASBA had already left the market by the time PCIP opened its doors. .

Prior to healthcare reform, callers to our office frequently asked "What about the law that says no one can be denied health coverage?" That law related to HIPAA, and is discussed in more detail in an article on our website, entitled "COBRA, HIPAA....?" The actual law (or mandate) provided for continued health coverage to individuals (1) who had completed 18 months of COBRA or (2) who were coming from a group plan too small to offer COBRA and who had 18 months of continuous coverage with the most recent form of that coverage a true group plan (for purposes of this law, a group was defined as two or more employees on an employer- sponsored group health plan; people exiting the military would also qualify). HIPAA stood for Health Insurance Portability and Acountability Act "group-to-individual portability." The premiums ranged from 300% to 500% what regular rates were runing, in accordance with governmental recommendations. Many consumers do not realize that much of what insurance carriers do is based on governmental guidelines and mandates, and is not always an arbitrary act by the insurance industry or a specific carrier.

There are plans out there, at various levels and addressing different needs. Even with the advent of healthcare reform, there are still options to standard major medical plans that are more affordable - but they come with their own set of guidelines and risks, and do not exempt the applicant from being subject to the penalty. We are always happy to talk to callers about different plans but how well they work for any one individual still depends on prior health history. And since most of these alternative options are not compliant, those individuals - again - could still be liable for the penalty under ACA..