Health insurance hard to find for over-50 crowd
If you have insurance now
Stay insured. In general, if you never let your insurance lapse for more than 63 days, at least one insurer in your state must continue to sell you a policy that has no more coverage exclusions than the policy you are leaving behind.
After you leave a company with more than 20 employees, the federal rules known as COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) provide former employees, retirees, spouses and dependent children the right to continuation of health coverage at group rates. COBRA doesn't cover those who have coverage through partners.
Normally, COBRA will let you stay on your employer's health plan for up to 18 months, although you'll usually have to pay the full cost of the insurance, plus 2 percent. This can be expensive. If you are currently insured by your employer or your spouse's employer, but you or your spouse are considering leaving the job, before quitting, study up on all the health insurance options offered through your current employer because you won't be able to make changes under COBRA. Before you leave, you may want to switch to a comprehensive, but lower-cost option.
If you are 55 and older, several states continue
COBRA coverage to the time when you're eligible for Medicare. These
states include Illinois, Louisiana, Maryland, Missouri and Oregon.
In New Hampshire, this applies only to the separated, divorced or
surviving spouse of the policy holder. In New Mexico, group plans
offered through the New Mexico Health Insurance Alliance continue
coverage indefinitely, no matter what your age.
Once you've tapped out COBRA, you'll become HIPAA-eligible. HIPAA is an acronym for the Health Insurance Portability and Accountability Act of 1996. Under this federal law, a HIPAA-eligible person must be offered health insurance and may not have pre-existing medical condition exclusionary periods placed on their new health insurance policy. A pre-existing condition is a medical condition or health care problem that existed before you enroll in a health care plan. Every state must offer some type of guaranteed-issue HIPAA option to any person who meets the federal HIPAA eligibility criteria.
The law gives you 63 days to sign up for a new policy. Within that time period, in most states, your current insurer can't turn you down. In a few states you'll be offered a policy through another insurer.
The amount you'll have to pay for this new insurance can be high -- $20,000 per year for a husband and wife is typical, Saunders says. But you won't have to go bare, you won't have any limits for pre-existing conditions and the policy will be guaranteed renewable, meaning the insurer can't decide your health costs are too high and drop you.
If you drop COBRA in favor of something cheaper, you run the risk of ultimately being unable to find a company willing to insure you. The U.S. Department of Labor strongly advises against giving up your COBRA coverage in favor of an individual policy before becoming eligible for the protections offered by HIPAA.
If you drop out of the system, there is nothing in most states that protects you from limitations on pre-existing conditions, and in many cases, the insurer can refuse to renew your individual policy if you make expensive claims -- and sometimes even if you don't. Once you've dropped out of the COBRA/HIPAA system, there's no opportunity to change your mind.