Individual health insurance coverage?

November 9, 2006 6:46 AM

Should I take the group health or buy individual health care, given a pre-existing condition?

I don't currently have health insurance; I do have a pre-existing condition, a heart attack about five years ago; I smoke; and I'm in my thirties. Otherwise, I'm (apparently) healthy and have no other known chronic conditions.

A job is offering me group health care, or about $20,000 more a year.

They also tell me that their cost for the health care is about $500 per month, or about $6000 per year. If I took the group health, the employer would completely cover it (no paycheck deduction), but other insurance (vision, AD&D, life, etc.) would be extra and deducted from my paycheck.

Given that, I'm inclined to take the money. Assuming the money is taxed at 50%, that would still leave me with $10000 to spend on individual coverage.

If I took group health, my understanding is that pre-existing conditions would be covered after one year.

Can I get that with individual care? How much will an individual policy cost me per month?

What else should I know? Am I in fact better off taking the group health rather than the 20K?

If I did take the group health, would I be allowed to continue it as COBRA if I left the position voluntarily (that is, quit)?

Thanks.

posted by orthogonality to health & fitness (9 comments total)

Do you have to fill out a health questionnaire in order to join the group plan? Will the group plan exclude your pre-existing condition(s)?

Where are you? Different states have different rules for individual insurance, although you're likely to find that you have problems getting individual insurance given your pre-existing condition.

You're probably going to be better off taking the group plan and forgetting about the $20K. Is it a large employer who self funds their medical? Do they know of your pre-existing condition? Are you agreeing to stay off the medical plan in perpetuity, or could you enroll at the first open enrollment?

As for COBRA, if it's available for anyone (certain groups are exempt from COBRA continuation), it will be available to you upon your termination as long as you were enrolled in the health plan on the date of your term. The exception to this if you're fired for gross misconduct.
posted by MarkAnd at 7:45 AM on November 9, 2006

Try looking up your state's high risk pool (most states have them). It should allow you to figure out the high end of premiums for individual insurance in your state (or one nearby, if your state doesn't have one).

It sounds like you're single. If there's any chance you might marry/have kids while you're employed, would the employer cover the cost of adding your new family members to the group plan?

My gut feeling is that group is always better -- especially because your rates won't change if (God forbid) your health situation does change. Not much worse than being diagnosed with a life-threatening illness only to have your premiums go up on you. However, the chunk of change they're offering you is substantial, and a one-year waiting period on pre-existings is pretty brutal for a group plan, so it may be worth it for you to go individual.
posted by katemonster at 7:58 AM on November 9, 2006

First you have to find an individual care policy that will take you. In your thirties, smoke, and your first heart attack behind you? I would guess high risk pool might be the best choice you can find. It may not provide as full a coverage as you'd like, high deductibles, etc.
Don't overlook the lifetime limit of each choice. Many are 1M$, which used to be a lot of money, but we had one car wreck that went 1/4 M$, and those things are not unusual any more.
posted by unrepentanthippie at 8:29 AM on November 9, 2006

If you went with the private account, there's a good chance your pre-existing condition will not be covered. In fact, there's a good chance that anything pre-existing (prescriptions, for instance) will not be covered.

You say you do not currently have coverage. How recently did you have coverage? And, was it a group plan as well? There is a time-period in which you can be between group plans without any loss of portability. That is, you can leave plan-A...be without coverage for a set amount of time...and then enter plan-B, without losing the benefits of portability. All you need is a letter from your previous employer showing prior coverage.
If, however, you cannot prove prior coverage, your pre-existing condition can be excluded under the new group plan. Or, if they do cover it, the premiums are going to be astronomical. I suspect this is what is behind your employer's offer.
posted by Thorzdad at 9:31 AM on November 9, 2006

I just went through all of this, being self-employed, without insurance for more than the allowed time period (which in VA is 63 days) and having several pre-existing conditions. Go with the group plan. If you do find an individual policy that will cover you, you'll either have an extremely high deductible or extremely high premium, or possibly both. And your pre-existing conditions will probably not be covered at all.
posted by Nathanial Hörnblowér at 12:52 PM on November 9, 2006

I'm finding that the group plan won't cover pre-existing for a year. The guaranteed-issue plans (two in the state) also don't cover the pre-existing for a year.

The guaranteed-issue are from $319-$492 a month, which is high but not too high, and less than the cost of the group health to the company.

And the truth is, for five years, I haven't had any cardiac problems, despite worrying about it all the time. The heart attack originally cost me less than I expected (about 14K) which would be hard to pay, but I could do it.

So what's the argument for the group, considering it'll cost me $20K a year in salary?
posted by orthogonality at 1:17 PM on November 9, 2006

Take the group plan.

If you were healthy in your 30s, MAYBE, but I'd be highly surprised if any insurer would even want to touch a 30 year-old smoker with an MI already. Are you sure your "pre-existing condition" wouldn't be covered immediately in the group plan?

Unless you have some obvious reason for the MI like trauma or something, you're probably at pretty high risk to have another one, which could be even more devastating.
posted by gramcracker at 6:27 PM on November 9, 2006

Can you opt out of group now and join next year (with the pay cut) at whatever the next open enrollment is? Can you opt out every year and join the group plan (again, with the pay cut) 5 years from now at open enrollment? How disciplined are you with money? Look into Health Savings accounts, and what used to be called "Major Medical". If you don't need prescription coverage, and you have the option of joining the group at a later date, I would look into other options. I work for a cardiologist, and we have a few patients who pay out of pocket for doctors visits (these are people like you, who are relatively healthy and only come in 1-2 times a year). They have insurance (usually through Blue Cross/Blue Shield) that covers anything done in a hospital, outside of routine testing. Procedures, surgeries, emergency room visits, etc. are covered (albeit with a fairly high deductible, but that's part of what HSA's are about), but routine stuff isn't. If you can afford to pay for doctor visits and prescriptions out of pocket (and most doctors will give a cash discount if you don't have coverage), then I would go to an outside source for insurance. But I would only do it if I had the opportunity to join the group plan at a later date. Rates, health, and situations change, and I would want that safety net.
posted by deedeep at 6:30 PM on November 9, 2006

deedeep is right about many doctors giving cash discounts, but remember that many hospitals give insurance discounts -- in a big way. I recently had a procedure done for which the list price was upwards of $75K. The insurance negotiated price was $30K (of which we only had to pay about $2K). Some poor person out there is paying full rack rate for it because he has no coverage for the underlying condition. Given that it was a cardiac procedure, it's entirely possible that you'll need it some day (for your sake, I very much hope not), so even if your heart hasn't been giving you any trouble for the last 5 years (congratulations!), you should beware of any plan that skimps on pre-existings any more than absolutely necessary.
posted by katemonster at 7:32 PM on November 9, 2006