Not All States Have A Guaranteed Issue Option

InsureBlog’s Bob Vineyard isn’t impressed with Dr. Justin Kleaveland’s support for health care reform.  Dr. Kleaveland’s article is basically a summary of the major points included in the House and Senate bills, along with his reasons for supporting the reform efforts.

On several points, I agree with Bob.  There are a lot of ideas in the reform proposals (like maternity care on all policies, guaranteed issue coverage, and limits on premium variation with age, for example) that sound good, but are tough to afford.  And Bob is correct in noting that in states where health insurance is already guaranteed issue, premiums for individual policies are much  more expensive than in states like Colorado, where we have medical underwriting.  Simply expanding access to health care without significantly impacting the underlying cost issues isn’t going to fix anything.

In the discussion about guaranteed issue health insurance, Bob mentions that:

“Pious platitudes but this demonstrates how little the good doctor actually knows about the current system. Every state has provisions that allow access to health insurance on a guaranteed issue basis.  Every one.  Yet this fact is ignored over and over.”

It is true that HIPAA provides some access to guaranteed issue health insurance in all states, since it’s a federal regulation.  But HIPAA eligibility is limited to people who have had at least 18 months of group health insurance coverage (and elected and exhausted COBRA if it was available), and who have been uninsured for no more than 62 days.  That means that a person who has been uninsured for more than a couple months is out of luck, as is anyone who didn’t have prior group coverage.

In a few states, health insurance is guaranteed issue for everyone (and quite expensive).  In the rest of the country, for those who can’t get health insurance under HIPAA regulations, there are high risk pools in many states.  But there are a handful of states that don’t have any sort of guaranteed issue health insurance for people who aren’t HIPAA eligible.  To verify, I contacted the Divisions of Insurance in several of these states (AZ, FL, DE, NV, and HI) and was told that none of them have any sort of guaranteed issue individual health insurance.  The HI representative mentioned that they have an employer mandate that requires employers to provide health insurance for any employee working at least 20 hours a week, so that likely solves the problem for most people there.  But in the other four states, according to their Insurance Commissioner’s office, there are no options for people who can’t qualify for individual health insurance.  One representative told me that people just have to “keep trying” for individual health insurance.

We’re lucky to have Cover Colorado, a high risk pool policy, which provides fairly good coverage with reasonable rates.  But even with a good program in place, there are still people who fall through the cracks.  Cover Colorado requires an applicant to have lived in Colorado for at least six months before being eligible for a policy (unless the applicant is transferring from another state’s high risk pool).  We have spoken with clients over the years who have moved to Colorado only to find out that they will have to go uninsured for six months before becoming eligible for coverage (which means that once they do become eligible, they will be subjected to a pre-existing condition limitation because they have a gap in coverage).

High risk pools are definitely better than nothing, but they don’t solve all insurance problems for people who have pre-existing conditions, and they don’t exist at all in some states.  One of the aims of reform ought to include truly making health insurance available – in all states – to all applicants who want to purchase it.  If we make all health insurance policies guaranteed issue (without also significantly expanding the pool of healthy insureds via a strong mandate), we’ll likely see higher costs for all insureds.  But a good start would be to make sure that everyone, regardless of where they live, has access to at least one guaranteed issue health insurance policy (and no, discount plans and limited benefit policies don’t count).

I found Bob’s article in Grand Rounds, hosted this week at Healthcare Technology News.

About Louise Norris

Louise Norris has been writing about health insurance and healthcare reform since 2006. In addition to the Colorado Health Insurance Insider, she also writes for,, Verywell, Spark by ADP, and Boost by ADP, and Gusto. Follow on twitter and facebook.


  1. Thanks for the plug, Louise. For certain, the current system isn’t perfect, and people fall through the cracks all the time, but there are ways of addressing these situations without dismantling the entire system.

    It’s like saying automobiles are dangerous. Thousands of people are injured or killed every year as a result of auto accidents. So the government, in their infinite wisdom decide to mandate that everyone drive a horse and buggy. Those who refuse are taxed. Those who cannot afford a horse and buggy will receive one from the government, courtesy of the taxpayer. Those who insist on keeping their cars will be severely taxed.

  2. Bob,
    Well said, but I don’t think the horse and buggy analogy addresses the point. The people are overwhelmingly shouting for guarantee issue health care in some form. (And as Louise pointed out, there are currently some states where people don’t have that option). The only way to accomplish that is to accompany it with a mandate. Even without guarantee issue, should somebody making over $50,000/year be able to make the conscious decision that the rest of us will pay their medical bills if something catastrophic happens?
    Your car analogy… people who buy cars are required to have liability coverage so any large liabilities are covered by an insurance pool they helped to fund. But with health care, people that choose to not have health insurance will still get emergency health care if something catastrophic happens to them. How do you suggest we solve that situation? I only see two options:
    1) Require them to sign a contract that if something happens to them, they will not ask for handouts or receive care that they cannot cover with their current assets. Of course what if they get hit by a bus in public? How are we to know they had already made the decision for nobody to call an ambulance? Wear a wristband? It gets pretty complicated.
    2) Require everybody to have health insurance coverage.

  3. Jay, those that want a guaranteed issue option either aren’t aware of the cost, or simply don’t care . . . especially if the taxpayer is picking up the tab.

    Actually the car analogy falls apart. They are only required to buy liability coverage if they are going to drive on the streets.

    And I disagree with mandated health insurance, but those who choose not to participate should not be able to do so with impunity.

    The proposed penalties for “failure to comply” in both the House and the Senate are a joke.

    Those who currently abuse the system are subject to having assets seized to pay their bill. Many who voluntarily go without health insurance have little to lose, much like those who drive without auto insurance.

    But there are plenty of people who can afford and can qualify for a medically underwritten health insurance plan that simply choose to opt out.

    Other than stubbornness or stupidity (you decide) there are only two valid arguments for not purchasing health insurance.

    They truly can’t afford it, and there are some, not many, but some who meet that criteria. But we also see reports of many who say they cannot afford health insurance, yet qualify for Medicaid, SCHIP or other programs but simply choose not to participate. Other than forcing them to sign up for Medicaid, SCHIP, etc there is not much you can do.

    And there are those who cannot qualify medically for health insurance, but guess what? If you are disabled, qualify for SSDI, you can go on Medicare after 2 years. What is wrong with allowing folks to BUY IN to Medicare even if they do not meet the SSDI criteria or have not met the 2 year waiting period?

    Between Medicaid, SCHIP, Medicare, HIPAA, risk pools, carriers of last resort, open enrollment and the existing GI plans, we have ways to cover everyone. Yet for some stupid reason the folks in DC feel a need to scrap what works for 85% of us that are insured in something other than an existing government program and create a whole new way of doing things.

    Makes no sense.

  4. Thanks for the reply Bob. You said “And I disagree with mandated health insurance, but those who choose not to participate should not be able to do so with impunity.”

    If you wouldn’t mind giving me a “For example…”

  5. If you do not have health insurance, with or without the mandate, impose a tax equal to 3% of gross income. Or make it 5%. Something other than a $750 fine as proposed in the Senate bill.

    Face it, $750 is a joke.

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