General Information About Insurance Coverage: This Page To: By-State Sources Table Is Employer Coverage Secure? See The Walmart Memo "I mean, people have access to health care in America. After all, just go to an emergency room." (click here) -- G.W. Bush, 7/10/07 Will McCain or Obama Fix The Problem? McCain, Obama and the Crisis; Other Notes on Health Insurance and Policy

To: By-State Table Directly to State In That Table: AL AR AK AZ CA CO CT DE DC FL GA HI ID IL IN IA KS KY LA MA ME MD MI MN MS MO MT NE NV NH NJ NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY

Recently, "pre-existing condition" issues with health insurance have become more and more of a concern for people in the U.S. The increase in relevance of the pre-existing conditions issue comes in part from the improvement in medical technology and knowledge. Thus, all kinds of little or big things may have been picked up in the numerous medical tests: MRIs, catscans, e.e.g.'s, blood and urine tests, eye exams, ear exams, etc. A doctor, nurse, dietician, or exercise trainer may have mentioned in passing at some time that you might have this, or that, or Barr-Epstein, or a foot disorder, or lactose intolerance, or a hip that is wearing out, or a tendency for an inflamed small intestine, or neurasthenia, or a mitral valve prolapse, or a general autonomic disorder. You may have realized based on an Oprah or The Health Channel or The Today Show that you might have ten or twenty other things. You also might have something that you know is serious, like cancer, or a heart condition, or diabetes. In these cases, when you try to get new insurance, you may have a "pre-existing condition", and depending on the laws that affect you and other specifics, if you are not rich, you have to try to protect yourself from getting financially wiped out and/or not getting treated.

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I honestly don't support the pre-existing-condition-screened system (which prevails for non-employer insurance in all but about 5 states-- the "community rated" and "modified community-rated" states are the exceptions--I believe they are MA, NJ, NY, VT, and ME -- which protect their residents in that they don't allow health insurance companies to exclude their pre-existing conditions or charge more to people with pre-existing conditions provided they have a sufficient duration of continuous prior coverage.).

The reason I don't support the pre-existing-condition screened system is that it causes quite a bit of waste in health care delivery, and it causes financial insecurity among all of us in the middle class who are trying to create security for ourselves by having a savings and accumulating assets, to the point where we wonder why we bothered working and saving for a rainy day. (Exception: people with $10,000,000.00 or more in assets generally can pay cash for medical services, and do not have to worry about health insurance and pre-existing conditions.)

The insecurity caused by the pre-existing-screened system is severe: unless you have guaranteed full employer-paid insurance until you reach Medicare age 65, there is always a risk, even if you have been continuously responsible and maintained health insurance coverage in the past, of a disease you have causing you to be unable to get any new health insurance coverage, or to be able to get only very very expensive coverage. (Whether the insurance is unavailable or very very expensive depends on the state regulations in the pre-existing-screened system where you live when the problem happens to you.) And, whatever people may think their employers have "promised" them, a contractually binding promise to supply full health insurance until age 65 is rarely, if ever, in place for people who work for private companies. It is in place only for certain government workers who have already passed 10 to 30 year minimum insurance guarantee requirements. The rest of us are at risk of losing all our savings, unless we have millions of dollars in assets and can just pay cash for all hospital expenses as they arise.

(As an aside, the system has gotten so dangerous and inefficient for people with all levels of wealth below about $10,000,000.00 that I see a mandatory universal coverage as the only reasonable solution that will keep people from both dieing unecessarily and getting financially wiped out unnecessarily. Nonetheless, the information on this page is designed to get you through the current system.)

At any rate, since the issue of these pre-existing-condition-related coverage gaps has long been of concern to me, I've tried put up some links and tips here. I hope some of you find the useful.



Finding out the rules that apply to you, and their implications, is, unfortunately, a very tricky business. Overwhelmingly, the laws that affect you are state laws. There are some Federal laws, particularly regarding insurance that large employers set up for themselves. Some of the Federal Laws (such as Kennedy-Kassebaum) affect you not in themselves, but in terms of how they interact with state laws. In addition, regrettably, sometimes actually bankruptcy laws have to be considered as a last resort, and these have Federal involvement.

Note that, because the situation varies so much from state to state, and job to job, and further, because there is so much of an affect of people who have insurance subsidizing those without through unreimbursed (emergency room, etc.) medical care (until the people with insurance themselves become poor and eligible for free or subsidized treatment), your optimal financial solution regarding health care may paradoxically require your being less productive to the economy. That is, it may be financially best for you to stay in a state where you have a job you aren't very good at, or hate, or where you have no job at all, but where the health insurance rules (including pre-existing conditions and those for fully-subsidized Medicaid and partially-subsidized state plans) and/or your job health insurance favor your exact situation. (This state of affairs is generally bad for the economy, and tends to make the country poorer, but you may have no real choice in order to save yourself.)

Also, by all means, before accepting a job in a new state, check the system carefully. It may turn out that moving to a certain state may put you at risk of having to pay hundreds of thousands of dollars extra down the road, if you do get sick. If you have the option, you may be smartest to avoid employment in that state.

Here's the analysis you have to do: In each state, you have to find the details of the rules (my big by-state table toward the end of this page should help you gather the needed information), then think very carefully and analytically about what happens if you go from a job with insurance to no job, or another job with or without insurance, or just move into the state with or without a job with health insurance, etc. You generally want to think about bad and worst cases and bad- and worst- case combinations of things, because, after all, that is what insurance is supposed to be for -- protecting you from things not certain to happen but bad if they do happen. (If you take out of consideration of "bad and worst cases", you really don't need any insurance of any kind at all.)

In thinking through bad- and worst- case expenses, consider in the bad- and worst- cases:

Alternatively to you doing your own research and thinking through, lawyers will do the research and thinking for you, generally for a fee, and this is a good option for many people. However, be wary of strategic advice from state insurance offices and insurance agents. (There is often a lack of strategic expertise in these sources, and also state insurance offices have making the state's programs look good as a priority, and insurance agents, though I believe they won't actually lie, have recommendations which may be colored by their own financial interests.)

Also, if you do choose to use a lawyer or lawyers, watch out in that some may not be analytically sharp enough to handle the analysis of the logical combinations of things that may happen to you.

(I am afraid that, based on researching many of the state rules, it looks to me like in very many, but not all, states, a person trying to work hard and keep themselves above the "nothing left to lose" asset level has a lot of real risks. A person may trust that the state legislators and government officials in their state have done a good job keeping them away from a likelihood of sudden and unplanned medical-related poverty, but for many states, the trust is mistaken. (In fact, though I don't agree with everything Lou Dobbs has to say, the title of his recent book War on the Middle Class seems pretty accurate to me on what's happened with health insurance.) This state of affairs is frankly infuriariting to me, as the pre-existing condition/non-insurance problem does not exist in any of the other industrialized countries of the world -- in all of those countries, the legislators have simply done a better job.)

Note that it is not my intent to cover Medicare or Medicare Supplemental plans. (Medicare is what you get when you hit age 65, or sometimes when you are younger and are disabled.) There are many complexities associated with your health insurance if you are on Medicare, but basically you are insured, and I do not believe pre-existing conditions are an issue on Medicare itself.

The site is by no means a comprehensive guide -- the situation is much, much too complicated for that, with different rules in all 50 states. My intent is to put some things to consider and be warned about, as well as some useful links. It is possible that I inadvertantly posted some information in error. By all means, check with appropriate lawyers and state insurance departments before making consequential actions based on the information here! (Also, note, I am NOT a lawyer. Just a concerned citizen, trying to be helpful. Further, note that I can not take legal responsibility for any inadvertant errors on the site. If you need to rely on the information here, you should consult an attorney specializing in health financing issues, and/or your state insurance department. )

TWO FIRST GENERAL SOURCES OF SOME BY-STATE AND CROSS-STATE INFORMATION: is the Georgetown University All-States Health Insurance Site. The site has 50 booklets (.pdf) you can download, which try to cover all general aspects of the situation you are in in each state. The booklets are long (for example 46 pages for CT), owing to the complexity of the health insurance situation in each state. The booklets are a starting point: they are missing certain specifics, such as typical rates, etc., but they generally give you links and phone-numbers to start to fill those in. Do check the date-written on each documents you read from this source. (For example, for my old state of CT they have a Jan 2007 document. The whopping pre-existing coverage gap that I have mentioned elsewhere, patched in 2008, is still listed as being present in the guide from the Georgetown site.) (The site is pretty informative on a by-state basis. That is, if you are in, or thinking of moving to, a particular state. I'm less enthused about the cross-state comparisons, as rules vary immensely, and residence in one state vs. another can easily make the difference between maintaining your current level of wealth, and poverty. However, there is, for individual insurance, a by-state comparison table on the site: Georgetown By-State Table) THERE IS EVEN BETTER STATE-COMPARISION INFORMATION (ABOUT INDIVIDUAL AND STATE SMALL GROUP RULES) AT: kaiser statehealthfacts.org "Managed Care and Health Insurance" subpage., However, note that both of these sources, as thorough as they try to be, miss certain critical items (such as the $30,000-$75,000 annual maximums that high-risk/last resort plans will pay in California and Pennsylvania). You will probably want to check my by-state table (below) to see if I've pointed out any other critical issues.

CRITICAL INFORMATION -- A LEGAL DEFINITION OF PRE-EXISTING CONDITION (AFFECTING WHAT CAN BE COUNTED AS A PRE-EXISTING CONDITION) MAY OR MAY NOT APPLY IN YOUR STATE:

This might apply on all policies, or perhaps just any high-risk-pool (see below for explanation of "high risk pool" policies).

In certain cases, at least the list of diseases your relatives had can not be counted, even though it would give insurers more of the health risk information they are after. (The reason for this frequent limitation on information about your relatives, unfortunately, is not that legislators and their economist advisors thought long and hard about how to make the health-insurance system provide health and economic security to the citizens, but rather that looking at your relatives and therefore your genetics frankly reminds everyone too much of Nazi-type eugenical ideas.)


CRITICAL INFORMATION -- DIFFERENT WAYS OF BEING COVERED:

I need to give some background about the different ways people (under 65) can be insured, and some pitfalls relating to each way. (After that, I have varous additional links, by state, which will be more useful.)

WATCH THE FINE PRINT IF YOU GET A HEALTH INSURANCE "PRICE QUOTE" (in any state without "community rating" or "modified community rating") The quote may be only assuming you have no pre-existing conditions, and if you have a pre-existing condition, they may choose to charge you many times as much, or not cover you at all!

JOB-BASED INSURANCE--PRIVATE EMPLOYER:

Basically, this is "group" insurance. This is how most people get insurance.

In many cases, for this type of insurance, Federal "ERISA" laws prevail, making the employer quite free to do whatever they want with regard to many things, without regard to (superseding) state law. You're employer may provide great insurance, or poor insurance. They may reduce, or completely drop, the insurance at any time. They may also keep providing insurance for employees, but get rid of you as an employee. This is why, even if you currently have employee provided insurance, it is important for you to know about the individual insurance system, and pre-existing conditions, in your state. "Individual insurance" is your first backup. The only other backups are only for people with reduced incomes (these exist sometimes and have tricky enrollment criteria) and virtually no income and assets (Medicaid).

DOES THE CURRENT INSURANCE SYSTEM MAKE IT HARDER FOR OLDER PEOPLE, AND LESS HEALTHY PEOPLE, TO GET JOBS? See Walmart Memo.

In certain cases, companies may "self-insure", meaning there is no insurance company involved -- the employer just pays out claims out of their own pocket. Since they have so many employees, health-insurance expenses tend to "average out". In this case, it may be that an employer tries to hire younger employees, terminate older employees, avoid sick employees, terminate sick employees, to save on health costs. (Some or all of these may be illegal -- frankly I don't know. Whether legal or not, we can be confident it happens at least some of the time. New data: it must be legal, as America's largest employer, Walmart, at least considered it.. See this bit of a memo here, which includes the intention of seeking a healthier workforce by making the job unappealing to the unhealthy. Presumably, this healthier workforce will also wind up being younger, though perhaps if that were stated directly in the memo, there might be some legal trouble. Also, undoubtedly many managers at the local Walmart would get the hint from the people upstairs, and just turn down old or unhealthy looking people. (Let me actually sort of defend Walmart on this one. Although one might call Walmart greedier than they have to be, actually, the current economically ill-conceived system is kind of forcing Walmart to do this, or risk becoming non-competitive, and also getting a stockholder backlash. The true problem is that the health care financing system and regulations are incompetently conceived, causing this kind of gross incentive for any employer. We'd better empower the best and the brightest to fix this.

WATCH OUT -- IF YOU CALL ASKING ABOUT INSURANCE YOU'VE SEEN ADVERSTISED ON TV (say AARP), they will likely ask you immediately for your name, address, and pre-existing conditions. Anything you tell them may conceivably make it into the permanent cross-insurer database of pre-existing conditions!

In other cases, particularly smaller companies (which don't have enough employees for costs to "average out"), your employer buys insurance through an insurance companies. It depends generally on the state regulations. In many states, the insurance that employers buy is "community rated" or "modified community rated" by state law. (This can vary based on the size of the employer in certain states.) "Community Rating" means that what is paid by the employer depends on number employees, but not their age or sex or health. "Modified Community Rating" means it does not depend on employee health, but does depend on sex or age. Even if employer insurance is "community rated" or "modified community rated", in certain states it may be allowed for the insurance to exclude pre-existing conditions, either indefinitely, or for some waiting period, like a year. It all depends on the state law.

Note that some states may have, for employers buying insurance for their employees, no community rating laws, or no policies regarding pre-existing conditions.

However, I believe about half of states do have community rating or modified community rating laws for employer-based insurance, when the employer does not choose to be self-insured. The number with community rating or modified community rating on individual insurance is smaller. (More on that below.)

CALIFORNIA INSURER WRITES DOCTORS ASKING THEM TO FINK ON PATIENTS (So They Don't Have to Pay Claims on Pre-existing Conditions) See story here.

Note that, in general, one needs to be careful, with employer-based insurance, about retirement coverage. An employer may be offering coverage now to retirees, and be talking it up in its benefits brochures, but, unless there is an explicit written guarantee, it may not need to be offered in the future. Further, if it is offered in the future, it may become a really, really, bad plan.

One reason the state laws are important to understand, even for employer-supplied insurance, is that employees may find themselves not covered for pre-existing conditions, even if insured. Another is that they may find that they will not be readily hired due to age or health status affecting the premiums employers pay.

If you leave a job with insurance, there are some Federal COBRA laws about them having to sell you coverage for a year and a half (I believe) after you leave. You may want to check into what the rates they can charge you are, or how good that coverage has to be.

JOB-BASED INSURANCE--GOVERNMENT EMPLOYER:

The conventional wisdom is that health insurance through government employers is much more secure, at least as long as you don't lose your government job, or, if you've reached the tenure-point where the government has promised you that you know have government-funded insurance for life, even if you leave. The government could do exactly what corporations do, and stop the insurance, or could avoid the old and sick, but rumor has it that "they wouldn't dare". Which might be true, except, perhaps, at the local level, where a civic-minded comptroller might take it on himself to unload some of the financial baggage on the local taxpayer.

INDIVIDUAL INSURANCE -- NON-SUBSIDIZED

If your employer stops supplying insurance, or you stop having an employer, then individual insurance is what you will generally try to get. If you have substantially less than a lot of money, you may be eligible for subsidized or free insurance, of varying levels of quality, depending on the state.

Note that unsubsidized individual insurance is a bad deal in the sense that typically only around 70% of the premiums paid actually gets paid out for medical bills. (In the case of one policy I once had, the application stated that it was 60%, except, that in one of the states it was sold in, it was 55%) The extra money goes to the cost of selling and advertising and administering those individual policies. [NOTE: The may be different now in MA, where there health insurance system has "Connectors" which are attempting to improve the inefficiency due to marketing.]

However, if you have any amount of assets worth holding on to, and if your job-based insurance fails you, you'll need to get, or attempt to get, individual insurance coverage (that doesn't exclude serious pre-existing conditions).

The rules on unsubsidized individual insurance mainly are in the hands of the state you live in. In most states, even if you've previously been financially responsible and maintained health insurance for yourself and your family since you were born, the state may allow the insurance company to deny coverage for-pre-existing conditions, either forever, or for an period of time. The insurance company may or may not have to issue you insurance at all. And if the insurance company issues you insurance, it may or may not be allowed to charge you as much as it wants to.

There is an exception, but I am afraid not a very reassuring exception, due to Federal HIPAA (Kennedy-Kassebaum) law in the ability of an insurance company to not cover you, or exclude pre-existing conditions, on individual insurance. If you had employer insurance, then either an insuring company has to cover you for pre-exising conditions, or the state has to find some way of covering you for pre-existing conditions. That may sound comforting, but the reason it should not be comforting is that the insurance company, or the state, must cover you, but can charge you whatever it wants. (For example, $10 million dollars a year. Heck, I'll supply you health insurance for that amount myself, even though I'm not an actuary.) Thus, the Kennedy-Kassebaum law doesn't do anything, except, perhaps, for some states where it has an interaction with state law. Otherwise, it is vacuous.)

Now, with regard to unsubsidized individual health insurance, without regulations of some sort, there really is no way any insurance company, even if it wants to be nice, can give everyone who applies insurance at the same reasonable rate, even if they have pre-existing conditions. The reason is that all the really sick people in the state will flock to it, and it will go broke, paying out much more than it is taking in. Note that I said without regulation.

Now, there are regulations in most or all states. In some states, they are poorly crafted, or crafted with the interests of business in mind. In other cases, they are better crafted, and have the interests of consumers in mind. They are, at best, imperfect in all states, as there are "freeloader on the system" problems wherever you don't have mandatory coverage, with the penalty for not-having mandatory coverage being the full cost of the medical services that other people wind up paying. (NOTE: MA now has mandatory coverage, but the penalty for not having that coverage is much smaller than the cost to everyone else.)

On way states try to fix the problem of pre-existing conditions is to have, on individual non-subsidized policies, regulations forcing "community rating" or "modified community rating". What "community rating" means is that, provided a person applying for insurance has had continuous comprehensive health insurance for a period prior to applying for coverage (often one year), the insurance company has to give them coverage, and has to cover all pre-existing conditions, and has to charge them the same rate as everyone else in the geographical area (say county). "Modified community rating" means the same, except that rate can vary based on sex and age. In this case, it, of course, goes up the older you are, but now because of how sick you get. Note that the continuous prior-coverage stipulations that exists with these laws is critical. If they weren't there, people could just wait until they got sick to get coverage, driving up the cost unfeasibly. The continuous prior coverage provision makes the strategy of not getting coverage until you get sick too financially dangerous for most people to adopt.

A very good thing to note about community rating and modified community rating is that it stops a destructive and wasteful process called "cherry-picking" (see box below). When states enact community rating laws, health insurance companies whose business model is based fully on cherry-picking stop selling insurance in the state. This is what happened in around 1993, when several states went to community rating or modified community rating. (In New York State, a key proponent of this system at the time was Mario Cuomo, and I, for one, am thankful for his wisdom and initiative on that.)

Now, for my personal situation, the community rating / modified community rating system works because, as long as you can generally afford insurance to begin with, and you are sensible enough to keep holding it, you don't have to worry about pre-existing conditions. I live in New York State, which is one of the community rated states, and I am proud that the legislators here have been noble and smart enough to enact this legislation. Another community-rated state is New Jersey. MA has a 2006 reform, and is modified-community-rated dating back to before the reform. VT is either modified or pure community rated -- I forget which. And I think ME is. There may be other states. I am not sure.

At any rate, in a community-rated state or modified-community rated state, the process of shopping for insurance is much simpler than elsewhere, at least if you've maintained full health insurance in the past. In fact, often the state posts the rates (NY, NJ), or at least gives good guidance on the rates, or a computer program that will tell you your rates.

Thus, to show how it looks:
INDIVIDUAL INSURANCE UNIFORM-RATE AND RULE INFORMATION
FOR SOME COMMUNITY-RATED OR MODIFIED-COMMUNITY_RATED STATES

STATE	RATES	RULES AND GENERAL INFO HERE
NY	NY Rates NOTE: HMO stop-loss is generally $1500.	NY Rules
NJ	NJ Rates	NJ Rules
MA	MA Rates (Connector Programs under new Mass Reform): Here are some test zip codes: 01201: Pittsfield, MA 01104: Springfield, MA 02114: Boston, MA	(Modified Community Rating Still Maintained under 2007 reform)
VT	VT Rates	VT Rules

Now, not that community rated and modified community rated regulations are not the perfect answer. The rates can be steep. The main reason that they are steep is that insurance companies can't play the trick of selling only very healthy people insurance. (When insurance companies are allowed to play the trick, some of the bad ones play an extreme version, and quote low rates, conditional on "acceptance by the insurer", which acceptance they will give only for people who are very healthy. They can sell policies to the very healthy people very cheaply and still make a nice profit, since they know a very healthy person is not likely to have much in health expenses for the short initial period of the policy. However, in the long-term, the "cherry picking" dynamics that results from the trick is not so good for the consumer who is holding the policy: it often makes the policy price rise quickly, and it turns out the insurance gets incredibly expensive by the time the policy holder does get sick.)

Another reason rates in community-rated states look steep compared to "quotes" in other states is because there are still some freeloaders, despite the continuous prior coverage requirement: some people chance it without insurance for a while but do get it when they get sick. Another reason that there can still be the heavy sales-related expenses that affect individual policies. But what's really good about "Community Rating" and "Modified Community Rating" regulations is that you know that if you get sick, you don't have to pay much much more for insurance, or don't have no insurance at all. (That is, you really are fully insured.. In a state that does not have some form of community rating, if you get sick, in the long term you may lose insurance, or pay many many many times what you had expected for it. Thus, in those states, you're really only a little insured.

And of course, my satisfaction with community rating for myself is that I am comfortably in the middle class, and can basically afford health insurance. There is a huge problem of people not being able to afford those rates, and they absolutely have to be subsidised to afford those policies.


A large number of states that do not have community-rating or modified-community-rating, often have still tried to offer some protection to citizens, with varying degrees of success, with what are called "High-Risk Pool Plans". The idea here is that an insurance company can reject you if it wants, and charge you whatever it wants, and state laws will not interfere with that, but the state will offer special subsidized policies for those people rejected because of pre-existing conditions. Usually, these high risk pool subsidies are payed for, at least in part, by a mandatory contribution from the rest of the health insurance policies in the state

If the regulations and subsidies affecting these high-risk pools are set up correctly, this kind of arrangement can those who can basically afford insurance reasonably financially secure (that is, no humongo rates, and no coverage gaps if you have any form of continuous prior coverage). They seem to have done this in a few states. (The best example I know of is Oregon, though I find a few transportablity gaps in that set of rules that could still wipe you out financially.) However, in many states, there are humongous problems in the details. Here are the ones to look out for:

(a)The rates in the high-risk-pool could be really, really, high. As an example, I post the rates for CT: Here are the $5000 per-person stop-loss HMO, and here are $7500. per-person stop-loss PPO. You should assume you might have to shell out the stop loss each year also. Well, if you're a couple in your early 60s, and both of you have pre-existing conditions, I calculate over $45,000 a year.

The Cherry Picking Dynamic (in States Without Community Rating / Modified Community Rating): Suppose you live in a state without community rating or modified community rating. (Community rating and modified community rating prevent what is called "cherry picking".) Say you already have an individual health insurance policy in that state, and your state even has laws say that it can't be cancelled on you, or at least that it can't be cancelled on you unless the insurer stops offering insurance in the state. You might feel pretty secure. There's a way you might get stuck, which you might not expect. Say you do develop a medical condition: a heart problem, cancer, etc., and at the time you currently have private insurance. You might feel secure: you have a policy, you keep paying the premium, and under the laws of your state your company can not cancel your policy unless they decide to cancel all policies in the state. But that sense of security is false. What will happen is this: all of the people who are in your insurance policy's "pool" of people were pretty healthy when they got issued their policy. But over time, a few have gotten sick, but most are still pretty healthy. The small number of sick people in the pool will start to make rates rise a bit. Then other insurance companies, and possibly your own insurance company, will seek out the people in the pool who are still healthy, and sell them insurance that is a bit cheaper, since there are no sick people in that new pool. As they keep doing this, only pretty sick people will be left in your pool, and your insurance rates will get very high. You won't be able to get new insurance from a private company, though, unless they exclude your expensive condition. So, just like people who had an explicit loss of an old insurer, you're stuck, and you really need reasonably priced insurance or you may go broke. (This continuous increase in price due to other insurance companies cherry-picking out healthy people from the pool actually happened to me about 5 or 10 years ago in CT. I had a policy that started at about $1000 a year, and in less than 5 years it went to about $5000 a year, which was more than the cost of the high risk pool for my young age at the time. When I called the insurance company that had issued the policy to ask how high the rate might go, they told me they couldn't say, but then they connected me immediately to their Connecticut agent, who tried to sell me a new pre-existing-screened policy. (That is, they tried to cherry-pick me from their own pool.) At that point, I just took the high-risk pool even though I was healthy, in order to avoid any part in the insane system, and also resolved to leave the state I was in -- CT -- for a community-rated state at the nearest economically opportune time.) (Aside: that insurance company probably had cherry picked other people out of its own pool prior, and that was probably, in part, responsible for my rate rising so high. Whether that is illegal or not -- I haven't checked -- is irrelevant. If they hadn't cherry picked healthy people out, other insurance companies would have. The pre-existing-screened system has that fundamental cherry-picking mechanism for rates on current policy holders to rise, and force them to get a new policy if they are still healthy. Moreover, folks of an economics or mathematical bent will easily see that this product being billed as "insurance", which is supposed to pool risk, actually pools only the risk of costs for a period of time after disease onset, that period of time getting shorter and shorter as the technology for cherry-picking gets better and better. Only restraint on the part of cherry pickers, motivated not by any morality, but rather by not making too obvious the uselessness of the consequent product, prevents them from using computer and internet technology to bring that period of time of being insured down to say 1 hour from disease onset.)

(b)Even though the high risk pool is called the "high-risk pool", it may still exclude pre-existing conditions, for at least a period of time. Thus, in CT, (until they finally patched it in 2008) they were excluded for a year (if your prior coverage was individual). If you think this through, this kind of thing causes people to be locked forever in the state where they get sick. Also, in CT, before the 2008 patch, there was this particular issue, if you currently have non-high-risk-pool individual coverage, where your policy rate may start to go up to astronomical rates (as insurance agents sell only-the-healthy-people in your pool cheaper policies), and your own lack of health keeps you from getting one of those. You would to pay for both your individual policy and the high risk pool policy for a year to avoid coverage gaps!

(c)High-Risk Pool Plan Coverage may have dangerous exclusions or caps.What comes to mind here is that when I once checked out the MO high-risk plan, I noted that emergency treatment while out of MO is only covered at 50%. So, if you happen to have a heart attack while travelling, you might become poor. Well, you just have to stay in the state forever. (Also: California: only pays $75,000 a year. If you have a bad year, medically speaking, it's all over.)

(d)High-Risk Pool Plan May have a waiting period or be unavailable due to the state running out of money.(When I last checked California, I believe this was a stated risk.)

(e)High-Risk Pool Plan may have plan provisions worsen abruptly on current policy holders. For example, in CT, the non-HMO per-person stop-loss was $2500. Then they raised it to $7500. all of a sudden. This kind of increase actually was not permitted under state law for individual policies, but they did it to the high-risk policies because legally, in CT, they were not insurance policies. [NOTE: a stop-loss is the maximum you will have to pay in copayments and deductibles.]

(f)High-Risk Pool Plan may cover only people with prior employer policies, not individual. (I think this may be the case in Alabama, for instance.) Variation: High-Risk Pool Plan may exclude pre-existing conditions if you have prior coverage that is individual, not group.

(g)High-Risk Pool Plan may require 6-month of in-state residency before applying. (This will leave you uncovered if you move into a state. Last I checked, this was the case in Minnesota, for instance.).

(h)High-Risk Pool Plan may require you jump through certain "hoops" before applying, such as be rejected by an individual insurer in the state. Conceivably, this may cause you to be uncovered for a few months when you first move into a state, or you may need to plan several months before moving into a state, and see if an insurer will let you apply for insurance before moving. (Presumably, you would have to have rented an apartment or bought a house first in the new state, so that you have a definite address in the new state.)


If you're thinking about the high-risk pool from an economics/policy point of view: The health insurance industry has been promoting for years the pre-existing-conditoned-screened system, combined with a high-risk-pool, as the ideal system (because they make more money that way). It is important to note that there is a question of the ability of 50 individual legislatures to come up with even sound high-risk pools, which don't have humongous non-coverage-for-pre-existing condition, and other, gaps. It looks to me that about 50% of states with high-risk pools have constructed those pools with various humongous gaps. For example, California often has a waiting period. Connecticut, whose insurance industry / government alliance, had for years a high risk pool where, if a private insurer stopped offering your policy class of insurance, the high-risk pool that you might then need would exclude your pre-existing conditions. Also, moving into the state with continuous prior individual coverage, the high-risk pool would also exclude your pre-existing conditions. Connecticut appears to have patched these humongous gaps, but only starting in 2008.

More from economics/policy point of view: The pre-existing-condition-screened plus high-risk-pool system might reduce freeloading a little, in that people who are pretty healthy can find a lower rate (lasting basically as long as they are healthy due to "cherry picking" by insurers), and may be more likely to buy insurance. There is still plenty of freeloading under this system, especially by those who don't have that much in savings and assets to lose, as the strategy of saving the premiums, and taking the risk of going to no assets and Medicaid is probably economically rational. (All partial solutions have a big freeloader problem. That's why, in discussion of Universal Coverage, making everyone get insurance, even if it requires a subsidy, is almost standard.)

STATE HIGH-RISK-POOL LINKS ARE COLLECTED TOGETHER AT THESE PLACES High Risk Pool Link from National High Risk Pool Association "CHIP" site. If that site is down, try this list from one of the high-risk pools. Try also this link, which also gives summary information on each pool. In all cases, consult also the supplemental by-state information at the Georgetown University All-States Health Insurance Site, which will have different angles.

Yet Other States May Have "Insurers of Last Resort", that, with government subsidies, and tax breaks, offer (more expensive) policies to those with pre-exisiting conditions. Last I check, PA was one of these. (I was actually considering, not too long ago, moving to PA. I wanted to check the rates on the insurer of last resort in case I ever wound up needing the insurer of last resort. Apparently there was not a lot of profit in the whole last-resort business for that insurer, so they didn't post rates on the web, and didn't have a person to answer the phone and give me rates when I called. So the phone just rang and rang, and I'm staying away from PA.)

Yet Other States May Have Other Schemes, or No Schemes at All. (I have not done the research to check which those are.)

INDIVIDUAL INSURANCE ONLY--BY-STATE COMPARISON: The Georgetown site has this By-State Table on individual health insurance only. Be careful that it is a few years old.

NON-EMPLOYER INSURANCE -- SUBSIDIZED

If you have a low income, and possibly other qualifications, you may be eligible for some sort of subsidized insurance.

Sometimes, but not always, the subsidized insurance will have no restrictions on your pre-existing conditions. This is a critical aspect.

Each state may have a patchwork of subsidized programs, so you may have to phone around diligently and ask a lot of questions.

SHOULD I AVOID SEEKING TREATMENT FOR WHAT I BELIEVE IS PROBABLY A BENIGN CONDITION, WHOSE TESTS FOR DIAGNOSIS MIGHT, HOWEVER, UNCOVER ALL KINDS OF PRE-EXISTING CONDITIONS?: I don't recommend this, and would like to point out the obvious dangers. But I do understand your logic, that in certain circumstances it might, unfortunately, be a rational economic decision.

Some subsidized programs may base eligibility on income alone. However, if you think about it, its possible to have quite a bit of wealth and have a technically low income. (Lets say you own a nice house, and have a lot of high-growth low-dividend stocks that you only sell to meet modest living expenses. And further, say you have a giant IRA rolled over from several 401k.) Thus, to make sure those eligible really can't afford full-cost insurance, they have a provision that you need to have been uninsured for say a year. (This works because people with a good bit of wealth but no technical "income" won't chance the risk of that year uncovered.) I think NY State's "Healthy Choice" works this way, or at least used to.

Some subidized programs may have a tendency to get people into a poverty trap, which means that if they work harder and try to get into a financially better spot, they find their insurance costs go up by much more than the extra money they are making. As an example, I go back to my CT example above, where on certain plans HMO plan rates, if you compare top to the bottom with the same coverage, but you pay the bottom rate if your income is $1. more than the qualifying rate, you can see that it may really not pay to work.

Another thing to watch out for in the subsidized plan is that it may be that the reimbursement to the physician or health care facility for services is very low, or ridiculously low. It may be that the facility or physician is really losing money on you (to be made up, of course, by cost-shifting people with good insurance), and they may avoid giving you service, unless legally mandated. If it is legally mandated, they may still find a way to sneak around those legal mandates.

Adverse-Selection Even With Pre-Existing-Condition Screened Policies "Adverse-selection" means the situation where people more likely to be sick tend to get insurance, whereas others tend not to. This is bad because it makes costs unaffordable and a bad deal for people just trying to get insurance coverage. Though the insurance industry points out that "community rating" can cause adverse selection ("community rating" hurts insurance industry profits), even pre-existing-condition-screened insurance has the problem. That is, people currently healthy who know that their family history makes them likely to get sick are more likely to get health insurance (as it is a good deal for them). Further, sometimes people do have serious pre-existing conditions and lie and get away with it. This is the economic problem that mandatory universal coverage gets around. Everybody pays for insurance, all risk is pooled, and there is no adverse selection.

Also note, states may have special subsidized or free programs for children, when the family meets certain qualifications, that are easier to meet than for adults This is because it seems really cruel, and really bad for the development and future health of children, to have them go without health care.

NON-EMPLOYER INSURANCE -- MEDICAID AND/OR EMERGENCY ROOM

If you have little enough in both income and assets, you may be eligible for MEDICAID. (Before I started researching for this page, I had thought all people with little enough in both assets and income were eligible. Some of the information I have been getting from About.com, and one of the state web-sites suggests that you may be out of luck for MEDICAID if you have no dependent children, at least in certain states. You should check these details out -- I really don't know.)

WATCH OUT FOR THE CROSS-INSURER DATABASE OF PRE-EXISTING CONDITIONS: We don't condone any form of cheating on this site, and do be aware that if you try to cover up a pre-existing condition on an insurance application, one place you can be caught is on a database of pre-existing conditions shared by all insurers. It is possible that they may even issue you insurance, but avoid paying claims because they have a record of the pre-existing condition from a prior application to a different company, or from medical bills submitted to a prior insurance company.

NOTE: If you have any assets worth going after, the emergency room and hospital may go after those assets after you are treated, so the emergency room is not a replacement for insurance, if you can get and afford insurance.

There is absolutely no shame in relying on Medicaid and/or the emergency room, as the U.S. system is abundant in poverty traps. (Medicaid and the emergency-room treatement itself, are of course, part of the poverty trap system, because often if your earned income goes up $1. over the limit, you have to pay thousands and thousands of dollars for health insurance, if your pre-existing condition doesn't keep you from getting it entirely.)

Individuals and families that were prior successful at saving assets, in order to plan for their futures, will understandably have an initial shock at getting into a Medicaid-eligible (or emergency-room-eligible-only) financial situation. It is important to know the rules and perhaps contact a lawyer specializing in health-related financial issues, to see if any assets can be protected: spouses, house, etc., and to see if bankruptcy laws might help. If you have enough advance notice of disease, in certain cases, legally transferring assets to a parent, child, or other relative or friend may help. In the Medicaid case, one may also want to consider avoiding marriage, to avoid being a financial drag on another person. This depends on the exact state rules. Note people live through this situation and survive. They may become eligible for subsidized housing, education, etc. that they were not prior eligible for.

Note that, in certain cases, Medicaid may not cover all of your medical needs. For example, prescription drugs may not be covered.

Exact eligibility depends on the state. It typically requires both a low income, and negligible assets, though sometimes a home and/or car, etc., are permitted assets. There may also be special higher eligibility limits for people with very high medical expenses.

TO WATCH OUT FOR, WITH INDIVIDUAL INSURANCE: POLICY CANCELLATION: In many (but I am not sure all--check in the Georgetown booklet) states, an individual policy can not be cancelled on you because you become sick. Even so, usually the policy can be cancelled if the insurer stops selling all of that class of insurance in that state. One should think about where that would leave them if they have a pre-existing condition when that does happen. Would you at least be eligible for any high-risk-pool without a waiver of pre-existing condition restrictions? (In CT, for instance: until they patched the law for 2008, no, and you'd be stuck.) Generally, in Community-Rated, and Modified-Community-Rated states, you don't have to worry. You have continuous prior coverage, so any new insurer has to take you at the standard rate they charge everyone else, and cover pre-existing conditions.

Note that I am not sure that low assets are required in absolutely every state. That is, certain states might count income only.

The exact Medicaid requirements may be on the web, or you may have to call or go down to a state office. (Here is an example Florida Medicaid Web Site. It's a bit unclear. It looks from the page like single people without children may not be covered at all, but you should call. They seem to have a patchwork of plans designed to let people earn and perhaps save at least a tiny amount of money without losing health coverage. This patchwork of plans may be the case in each state, and you probably have to call, and really grill the person on the other end of the phone to figure out how you might earn some spending cash and still be able to have health coverage.)

Say an Insurance Company (In a State Without Community-Rating or Modified Community Rating) Covers Me and Takes my Premiums: Do I have to Worry About the Not Paying Medical Bills Because They Accuse Me of Not Reporting a Pre-Existing Condition?? See CBS Evening News with Katie Couric story . Note all the reader discussion, after the story, generally highlighting the financial risk and ruin.

BEWARE PEOPLE TRYING TO SELL YOU SOMETHING BESIDES INSURANCE if you can't get insurance. They might call it a "Plan", but not an "Insurance Plan". It may be some marketing arrangement where you pay for your own medical care without any insurance, but get a discount of some sort. I have no idea of whether these plans tend to help, if you have no insurance at all. Just be careful that you know what you are buying. Also, watch out for plans with really limited coverage, and/or that are not full comprehensive health insurance plans.

Who am I? I am Norm Spier, a mathematical statistician who lives in New York State.

If you have any comments, or want to point out an error or oversight, please email me at norm@nastechservices.com

IF YOU FIND THE SITE USEFUL, and HAVE A SITE OF YOUR OWN May we suggest you consider putting a link to this site on your site? (Google and some other search engine use number of referring sites to determine placement in their search results. Giving this non-vested-interest site a link helps get the message out about the true financial and health high risk of current pre-existing-conditions regulations. Whereas commercial insurance agent sites want to keep you unworried, so you are in a "buying mood" and will happily buy pre-existing-condition-screened insurance from them. Government sites, particularly most state goverment sites, also generally want to keep you unworried, so that the miserable job they have usually done in protecting you with the laws is not apparent.)

SAY I AM PERMANENTLY HARMED IN A CRIME? Can they count that as a pre-existing condition? Yes. Even in a terrorist attack? Yes. (Patriot Act has no provisions for pre-existing conditions.)

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