1.  It’s important to know that each health insurance carrier has its own underwriting guidelines.  Just because you’ve been declined by one carrier, does not necessarily mean you’ll be declined by all of them.  We can give you an idea – based on your specific health history – of whether you might have better luck with a different carrier.

2.  Cover Colorado is available for most people who have been declined by a private health insurance carrier.  Cover Colorado is the state high risk pool, and has been providing health insurance for people with pre-existing conditions since 1991.   They offer premium discounts if your household income is below $50,000/year.  Applications must be received by the 15th of the month in order to qualify for a 1st of the following month effective date.

3.  Are you self-employed?  You may qualify as a business group of one.  You must have been in business for at least one year in order to qualify as a business group of one.  The state mandated Basic and Standard health insurance plans are guaranteed issue for a group of one during specific open enrollment periods, defined as 31 days from one of the following events:  the one year anniversary of the opening of your business, your birthday, or the loss of other coverage.  You can contact the Colorado Division of Insurance for more information about group of one regulations.  Like most group policies, group of one coverage is more expensive than most individual policies.  The notable exception is in the case of large families.  Individual health insurance premiums are calculated on a per-person basis, whereas group premiums have “family” rates that don’t vary with the number of children.  Group of one policies are offered by all carriers that offer group health insurance policies in Colorado.  The state mandated benefits in the Basic and Standard plans are the same regardless of what carrier you choose, but the price varies from one carrier to another.

4.  Have you recently left a job?  You may qualify to continue your coverage under COBRA or Colorado state continuation regulations.  COBRA applies to people who worked for a company with 20 or more employees, while state continuation applies to people who worked for a company with 2 – 19 employees.  In both cases, you’re allowed to continue your group coverage for up to 18 months (or more, depending on some specific circumstances), but you will be required to pay the entire premium, including the portion that your employer was paying on your behalf.  If you’re covered under COBRA regulations, you have 60 days to elect to continue your policy after you leave your job.  In the case of state continuation (if you were working for a company with fewer than 20 employees), you have 30 days to elect to continue your coverage.

5.  Depending on your income, and several other factors, you or your dependents may qualify for Medicaid.  In addition, children and pregnant women in Colorado may qualify for Child Health Plan Plus (CHP+) if their household income is less than 200% of the federal poverty level.

6.  Do you work for a small company that does not provide health insurance?  You could discuss the issue with your employer, and see if you can convince them to enroll in a small group plan.  Groups of 2 – 50 employees are guaranteed issue in Colorado, and with the passage of HB 1355, small group premiums cannot be adjusted either up or down during enrollment based on the medical history of the group members.

Thankfully, we live in a state where there are several options for people who are unable to qualify for private individual health insurance.  This is not the case in all states, although maybe the ongoing health care reform debate will eventually add options where there currently are none.

In addition to the workers who were laid off prior to the September 1, 2008 cutoff, there are plenty of others who won’t be getting stimulus assistance when it comes to health insurance.  People who worked for a company that went out of business (or stopped offering health insurance for whatever reason) won’t qualify, because there won’t be a health insurance policy for them to opt to continue via COBRA.  In addition, people who were laid off from small businesses might not qualify if their state doesn’t have a “mini-COBRA” law allowing workers to continue coverage when they leave groups with fewer than 20 employees (federal COBRA regulations apply to groups with 20 or more employees).  Colorado’s Mini-COBRA regulations allow an employee of a small business to continue coverage for up to 18 months, but there are several states that only allow for a few months of continuation – far less than the employees would qualify for if they had worked for larger companies.  Some states have been taking action over the last few months to make sure that workers laid off from small businesses are eligible for the federal COBRA assistance program, but there are still 12 states that don’t have mini-COBRA laws (so residents of those states who were laid off from businesses with fewer than 20 employees won’t see any benefit at all from the COBRA assistance program, since they aren’t eligible for COBRA).

Nobody ever said life was fair, but this situation seems particularly unfair.  I know that money is tight for the government right now, but I think that it would make things a little more fair if they were to expand the subsidy program to include subsidies for individual health insurance premiums (or state risk pool policies) for workers who were laid off before September, and for those who aren’t eligible for COBRA.

For starters, the beneficiaries are individual people, not corporations.  The health insurance provision in the stimulus package will allow the government to pay for 65% of the COBRA health insurance premiums for people laid off between September 1, 2008 and December 31, 2009.  The assistance will continue for up to nine months.

Another plus is that the provision only applies to people who were laid off – not those who left voluntarily.   So it is clearly aimed at helping people who have been directly impacted by the recession.   There is an income limit of $125,000 for an individual and $250,000 for a married couple who file a joint tax return.   People who have been laid off and are job hunting and/or receiving unemployment benefits will probably fall well under these limits, so the income cap probably won’t have much of an impact.  Personally, I’d prefer to see it be a little lower.  Families USA pegs the average COBRA family health insurance premium at $1069/month, which is a considerable sum of money.  But it seems that a family earning $249,000/year should be able to pay the premiums without assistance.  That’s my only complaint about the health insurance assistance provision in the stimulus package, and as I mentioned, most recipients are likely to fall well below that income mark anyway.

We frequently talk with clients in Colorado who are trying to decide between continuing their group health insurance policy through COBRA or getting an individual health insurance policy on their own.  For people who know they’ll be needing to get their own health insurance long term, an individual policy makes sense.  But for people with health conditions, COBRA is often the best (sometimes only) option.  Until they get the paperwork and see how much it’s going to cost.  The stimulus bill will now make it a more affordable option for people who have been laid off.  The number of Americans without health insurance is already way too high.  And since most people get their health insurance from an employer, the rising unemployment numbers were sure to drive the number of uninsureds higher.  Hopefully the stimulus bill will help to mitigate the problem for a while.  And hopefully the economy will get back on track by the end of the year when the government assistance program is scheduled to end.

Here in Colorado, I spoke with a client recently who got a quote for $1450/month to continue her family’s health insurance through COBRA.  She pointed out that this was quite a bit more than her mortgage payments, and was completely impossible for her family.  Luckily her family is healthy and can qualify for individual health insurance, which will be far less expensive.

COBRA is still a beneficial law that (in theory) protects access to health care.  But when it comes time to sign and return the paperwork to continue coverage, most people realize that there just isn’t room in the budget.  This is especially true for workers who have been laid off and are struggling to make ends meet.  Unemployment numbers are heading steadily in the wrong direction (in Colorado, unemployment hit 6.1% in December, the highest it’s been in five years).  I’ve seen lots of conflicting reports about the economic stimulus bill and whether the final version (if passed) will contain relief for unemployed Americans struggling to pay for health insurance under COBRA.  Without such a measure, the number of uninsureds will likely be higher this year than ever before.

Thanks to Health Business Blog for hosting last week’s Health Wonk Review, where I found the article from Health Populi.

I was struck by how similar this plan sounds to the high risk pool we have here in Colorado.  Cover Colorado has been open to participants since 1991, and it has been remarkably consistent.  Of course there have been rate increases, but that has been the case with all of the private health insurance carriers too.  Cover Colorado does cover maternity, with most of the plans covering prenatal visits with just a copay, and the delivery is covered at the coinsurance rate after the deductible is met.  The maternity coverage is similar to many private group health insurance policies, and is an obvious advantage over individual health insurance plans, very few of which cover maternity at all.

In Colorado, eligibility for Cover Colorado can be triggered by a declined application from a private health insurance carrier, or by an offer of a policy with a premium that is higher than Cover Colorado’s premium, or by an offer of a policy with a pre-existing condition exclusion.  Applicants must not be Medicare or Medicaid eligible, and must not be eligible for a group health insurance policy or COBRA.  Basically the plan is set up to be as inclusive as possible, while still being an option of last resort.

In the 17 years that Cover Colorado has been available here, I would not say that we have seen a flocking from private group health insurance to high risk pool coverage.  In 2007 (the most recent data I could find), there were 5,414 people insured by Cover Colorado.  Compared with the 17% of our state’s population that is uninsured, the number of people covered by our high risk pool is a drop in the bucket.

When employers stop offering group health insurance policies (which we may well see next year, as HB1355 takes effect and healthy groups are no longer eligible for a premium discount), the employees have a few options.  If they are healthy, they can apply for individual health insurance and choose from among numerous private carriers offering hundreds of policy options.  If they have pre-existing conditions, they can still apply for individual health insurance, but they may end up with a policy that excludes pre-existing conditions, or one that charges them a higher rate in trade for covering the pre-existing condition.  If they are unhappy with the offer they receive, or if they are declined, they can apply for Cover Colorado.  But the premium is steep.  A non-smoking 35 year old female will pay more than $400/month for a policy with a $1000 deductible (rates vary by county, and discounts are available to people with household incomes below $50,000).  There are plenty of Colorado residents who can’t afford premiums on private, medically underwritten policies, much less high risk pool rates.

If NC is efficient in the management of their high risk pool, I see no reason why it won’t be successful long-term.  But the high premiums (from Hank’s article, it sounds like they’re even higher than Cover Colorado) will likely be a stumbling block for a lot of people.  Those who are currently experiencing costly medical bills will find a way to pay the premiums.  But people who have been declined for health insurance because of a condition that is not currently costing them money might be less inclined to do so.  And going uninsured means that if (when) they do run into an expensive medical problem in the future, they will be out of luck, as the high risk pool will enforce a waiting period on pre-existing conditions.  So even with high risk pools, we find ourselves in a situation where people are uninsured and lacking realistic access to health care.  As long as we continue to have an opt-in/opt-out health insurance system, this problem isn’t likely to be solved by high risk pools.

I am paying COBRA, health and dental at $640. per month.
I am a nurse, recently diagnosed with cystic fibrosis (CF) at age 50, this year.
Cobra is 18 months with 11 month extension. I was informed I have to exhaust COBRA timeline before being eligible for Cover Colorado, the High Risk Pool.
CF is a respiratory illness that uses the same meds as any other respiratory disease. Nat’l Jewish sees patients a minimum of 4x per year, more if other symptoms occur as in diabetes.
Asthma patients use nebulizers just as CF pt’s do.
Tobramycin for pseudomonas is inhaled for CF pt, It’s an available medication. Therefore, if you have a non CF patient that has pseudomonas in their lungs, the treatment is the same. I don’t understand why CF has to be in the high risk pool. All other symptoms related would need to be treated at any other hospital. Additionally, CoverColorado is still more expensive for women/non smokers at age 50 than it is for men. We still make less in the workforce and have to pay more for health insurance. after age 50, women are nonchild bearing. So, why is there unequal costs. Also, CF at age 50 is definitely a shorter life span and I would probably need health insurance as long as 5-8 years. I’m paying for COBRA mostly because I need health insurance to “qualify” for future policies and exclusion waiting periods and in case I need it for non CF injuries/illness. I get my medications via the VA at no cost. Currently, I use Denver Health pharmacy or VA which lowers my out of pocket expenses. I think my insurance costs should be lower because of VA benefits. Would someone please address these concerns. Thank you so much. J.A., RN

• The opinions expressed in the “Open Mic” category do not reflect those of Insurance Shoppers, Inc. or the Colorado Health Insurance Insider. If you have an “open mic” topic you would like to submit, please visit our “Be A Guest Blogger” page, or contact us with your submission.

But why are employers involved in health insurance at all? Is it just tradition? Are we still working with the same mold that was created half a century ago, when employees tended to work at the same place for 40 years and were then rewarded with a pension for the rest of their days? If we really stop and think about it, why are health insurance and retirement funds linked to employers? In the 21st century, employees change jobs and even careers multiple times over their working years. Some people do still stay with the same employer for a lifetime, but it’s not the norm anymore.

When you retirement plan is linked to your employer – as is the case for all the 401k plans out there – and you leave your job, you can just roll your plan over to the one your new employer offers, or you can convert it to an IRA on your own. But if you have employer-sponsored health insurance and you leave your job, the options are not so simple. Yes, you can take COBRA (if you can afford it), but that’s only good for 18 months. After that, you either have to have health insurance in place through a new employer, or get individual coverage on your own. But if you have pre-existing medical conditions, your options are limited. You may not qualify for individual health insurance at all. If you live in a state with high-risk pool health insurance – here we have Cover Colorado – you’ll be able to get health insurance, but it may be very expensive and have a lot more out-of-pocket than you’re used to. If your state has no risk pool, you might just be out of luck unless you get another job that offers health insurance.

Wouldn’t it be simpler for everyone if “individual” insurance were really a group made up of everyone in a state, or even the whole country? What if every Colorado resident could be covered by a range of health insurance plans similar to what is available today in the group and individual market, but without any employer affiliations required? People would be covered continuously, regardless of their employment situation, and would not be trapped in a job just for the health insurance benefits.

To me, employer-sponsored health insurance was a better idea a generation ago than it is today. People are much more mobile today, and need a health insurance plan that is truly portable and not linked to where they live or what job they do.

If we really think about it, having health insurance tied to employment doesn’t make much sense. People change jobs and even careers many times in their working lives now, unlike previous generations that tended to stick with the same employer for a lifetime of work. Health insurance premiums have become a major budget issue for employers, which is reflected in the declining number of companies that offer coverage to their employees.

There is something intrinsically unfair about a system that allows employers to pick the type of coverage – if any – that they will offer to their employees, along with how much of the premiums they will pay. And businesses realize that they can cut costs significantly by hiring more part-time workers who don’t qualify for benefits like health insurance.

Then there’s the dilemma that people with pre-existing conditions face: in most states – including here in Colorado – individual health insurance is medically underwritten, so group health insurance is the best bet for a person with pre-existing conditions. But what if their employer stops offering coverage, or they lose their job, or want to make a career change but can’t because of health insurance? Health insurance should not be tied to employment. Yes, we have COBRA, but have you ever looked at the premiums that an average family will pay for 18 months of continued group coverage? The financial burden is huge – we’ve seen lots of COBRA premiums that are higher than our mortgage payment. And what do we do after a person has exhausted COBRA? If they have been hired by another company that offers group health insurance, all is well, but if not, they will have to find individual health insurance, which is almost always contingent upon being healthy.

Attaching health insurance to employment leaves too many cracks for people to fall through. There’s too much luck involved in finding a good job and making sure that it also offers health insurance, and then keeping your fingers crossed that it continues to do so.

We need to move away from an employer-sponsored health insurance system, towards one that is more equitable for everyone. Health insurance should be a permanent part of a person’s life – not something that comes and goes depending on employment. Whether we move towards a system where everyone buys their own health insurance or a single payer system run by the government, we need to work at making it as fair and all-encompassing as possible. Everyone should have health insurance, and whether they work as a Wall Street banker or a taxi driver or a waitress should be immaterial.

Last month, federal guidelines were changed to “refocus the program on the low-income people it was intended to serve.” Changes include rules that require a state to prove that at least 95% of low income (up to 200% of poverty level – or $34,340 for a family of three) children have been enrolled in the program before the state is allowed to expand the program to children from higher income families. Another requirement is that a child be uninsured for at least a year before being eligible for SCHIP. At first glance, this rule seems unconscionable. But the driving force here is to make sure that families are not dropping private health insurance in order to switch to better or cheaper coverage through SCHIP. This one is a tough call. It’s difficult to justify making a truly needy family – say one that loses a job and cannot begin to afford COBRA payments – wait a year for their children to be insured. But there has to be a deterrent to keep families who are capable of paying health insurance premiums – and indeed, have been doing so – from dropping their coverage with the intention of switching to SCHIP.

New York wanted to expand their program to allow children of middle income families – earning up to $68,680 for a family of three – to qualify for SCHIP, and to require only a 6 month uninsured waiting period for a child to be eligible for coverage. But since they could not demonstrate that they have enrolled 95% of children from families earning less than 200% of the poverty level, and since they wanted to shorten the waiting period for eligibility, the federal government rejected their request.

This is a tough debate. I can easily see things from both sides. I don’t think that $68,680 for a family of three should qualify anyone for any sort of public assistance – this is a more than adequate income to cover all of life’s necessities, including health insurance. But I know that there are parents who make between $34 thousand and $68 thousand who might choose not to have health insurance for their child, or – for the ones who are closer to $34 thousand – truly struggle to pay the premiums. And no child should have to go without medical care because of her parents’ irresponsibility or inability to pay health insurance premiums.

It will be interesting to watch this debate play out between the Bush administration and the state of NY. With polar opposite political ideals and very different ideas about how health insurance should be handled in the US, each side will likely put up quite a fight. It’s tough to imagine anyone – regardless of political affiliation – believing that any child should be without health insurance in the US. A child cannot provide for himself when it comes to health care. It’s the responsibility of the parents and/or the government to make sure that children have access to basic necessities – education, food, shelter, safety, and health care. If the parents cannot or will not provide these things – for whatever reason – we cannot just leave the child to fend for himself. But we don’t want to create a system that enables irresponsible behavior on the part of parents who could otherwise afford to pay for health insurance for their children.

Here in Colorado – and across the country – lawmakers will be watching closely the debate in NY. Nearly every state is grappling with health care issues, and it doesn’t appear that there will be any easy fixes.

She called me up after getting the job and told me that her new employer provided health insurance benefits, complete with copays on doctors visits and prescription drugs. The employer paid a pretty big percentage of the premium and it ended up being less expensive than what she was paying for her HSA qualified plan (which had no copays). She called up to ask me if it was a good idea to drop her individual policy for the employer sponsored insurance, what would happen to the money in her HSA, etc, etc…

After explaining what would happen to the money in her HSA, I gave her the what-if’s of dropping her individual policy for the employer sponsored health insurance…

I explained that her individual policy was permanent and stable, as long as she kept paying the premiums. The health insurance company could never single her out for rate increases, they couldn’t drop her, and she had one of the health insurance companies that has the same rates for existing and potential clients – so she could always be confident that her rates would be competitive if she developed a health condition and got “stuck” on the plan.

On the flip side, she could drop her individual health insurance for the employer sponsored group health insurance plan. But the risky part of doing that is if she (or her husband) develops a health condition while they are on that group plan, they would be stuck with only guarantee issue Colorado health insurance options. Depending on how serious her health condition is, she would have the condition excluded from any individual health insurance she applies for, or if it was more serious she wouldn’t qualify at all.

She decided to pay a little extra to keep her individual health insurance just in-case.

In 2006, she started having a lot of fatigue. She was later diagnosed with Crohn’s Disease. In May, their business started getting real busy again and her husband needed her help running it. She was sick of going to work for that company anyway, and was ready to leave. The reason she just called me is because one of her friends from that job was laid off. Even though her friend was younger, her friend’s option for COBRA would have cost over $750/month – for just her!

- Our client currently pays $420/month for both her and her husband.

She realized that she wouldn’t have been able to qualify for underwritten Colorado health insurance again after being diagnosed with Crohn’s Disease. If she would’ve dropped her individual insurance for the group coverage, she would have been stuck working there to keep the coverage (and she would have just been laid off anyway), or she would have to buy a guarantee issue individual plan like Cover Colorado for 2-3x the price.

That’s why she just called me. She wanted to let me know that her Crohn’s is pretty well under control, they are putting a lot of money into their HSA for retirement, their business is thriving, and she is very happy working at home with her husband. She said she realizes that the money they’ll be saving on their health insurance now is much greater than what she would have saved by having the group insurance through her employer for the 2 years she worked there. And the freedom it gave her and her husband is priceless.

(I wouldn’t have shared her story without her permission. I told her that is was a very common situation and her story would make a good blog post. She said, “by all means, I hope it helps.”)

See Also: Why Getting Your Health Insurance at Work Can Be Dangerous on the Consumers Health Insurance Blog.