HIPAA, private insurance, and prior coverage

February 16, 2006 8:15 AM

I have a question for those of those of you well-versed on private health insurance, HIPAA, and prior creditable coverage.

I was downsized out of a job a few months ago. Part of the severance was a continuation of healthcare through the end of January. Before January ended, we started shopping for private healthcare and applied for coverage.

The insurer has been dragging their feet (we are now 16 days without any coverage) and we only now heard back from them this week. In essence, they are proposing coverage that excludes prescription coverage for myself, my wife, and my son. They will provide prescription coverage for my daughter. Of course, she is the only one in the family not currently on any meds.

Now, I was under the impression that, under HIPAA, they could not exclude coverage for anything which I had prior creditable coverage for. However, this is exactly what it appears the insurer is trying to do. this faq seems to support my opinion, although the one small mention of private coverage (topmost section) seems somewhat vague about it.

So, I guess I need some opinions from those of you here with any actual experience dealing with these matters. Am I incorrect in my thinking about prior coverage? Or is the insurer betting that I won't check the law?

Thanks,
Jim

posted by Thorzdad to Health & Fitness (10 answers total)

The whole point of HIPAA was to protect people in your shoes. My reading of that behemoth and poorly written law suggests they are hoping you won't argue/read up.
posted by mds35 at 8:41 AM on February 16, 2006

Find out if you are still eligible for COBRA. It's not cheap, but it will extend your benefits for several months while you seek private insurance, and help you avoid a problematic "lapse in coverage."
posted by junkbox at 8:45 AM on February 16, 2006

private insurance doesn't *have* to insure anyone they don't want to. group insurance does. COBRA is very advised right now. I believe you can start it up to 62 days retroactive to not having coverage in case of disaster, but you'd better not trust me on that. talk to your HR/benefits department from the last position you were at.
posted by kcm at 8:48 AM on February 16, 2006

Response by poster: We decided not to go with COBRA because it was going to cost us around $1,200/mo. That would pretty much bankrupt us. We're still inside the window, though.

So, kcm, are you saying the portability parts of HIPAA definitely do not apply to anyone forced to go with private insurance?
posted by Thorzdad at 8:53 AM on February 16, 2006

Yup. HIPAA covers group-group portability, and I'm sorry COBRA costs so much but depending on previous conditions it's sometimes your only chance to remain insured even after you find another private or group plan. If your coverage lapses, it's a free pass to not cover you for 6-12-18-indefinite months depending on what plan you end up with.

Welcome to the USA.
posted by kcm at 8:58 AM on February 16, 2006

You might want to try an insurance broker, by the way. It's incredibly difficult to understand what is offered to who, and what the choices you have to make now are, and while you'll pay a small premium, their ability to find plans that cater to your profile can be invaluable. Insurance providers vary widely in the risk pools that they accept.
posted by kcm at 9:06 AM on February 16, 2006

Here's a little blurb from the AARP on insurance that applies, though some is geared towards the older set and Medicare.
posted by kcm at 9:09 AM on February 16, 2006

Response by poster: We are using an independent broker/agent.
Interesting link, kcm.
posted by Thorzdad at 9:24 AM on February 16, 2006

Thorzdad, I'm glad you asked this question. I'm six months pregnant and my husband recently got laid off. Long story short, it's looking like he's got another job, but it will be a little while before they kick in with a group plan. I read the same thing about COBRA making it possible to maintain coverage and require the subsequent group insurance to pick up pregnancy coverage, but I've also seen and read about the nasty, slimy ways insurance companies can find a loophole in just about anything. At this point, I'm just crossing my fingers and hoping we've done everything we can. It helps to see the COBRA thing confirmed here, though.

Insurance companies are evil. Evil, I tell you.
posted by moira at 12:01 PM on February 16, 2006

As kcm mentioned, the big deal here is continuous coverage. You get 61 days of lapse before that goes away, so be sure that no matter what shit they offer you, you TAKE it before that time has expired. You can fight over the details later or tell them to pound sand and go buy somewhere else the following month, but the continuous coverage is what's going to save your bacon.
posted by phearlez at 12:24 PM on February 16, 2006