Health insurance hard to find for over-50 crowd
If you have no insurance
If you're not eligible for COBRA, then finding insurance is a totally different ball game.
States with the strictest pricing regulations for insurers, known as community rating, can be the best places for someone older than 50 to buy insurance. States with community rating and adjusted community rating don't allow pricing based on health status. This means that the insurance company can't force you to get a physical or even ask you nosy health questions when policies are issued or when they are renewed.
Two states, New York and Vermont, use pure community rating in both the individual and small-business group markets. That means pricing is based on the average cost of health care in the community. In addition, the following states use pure community rating in the individual market for certain health plans only: Michigan (for Blue Cross and HMOs), New Jersey (for "standard" plans) and Pennsylvania (for some Blue Cross plans and HMOs only).
Adjusted community rating likewise prohibits insurers from varying premiums in a community based on health status or claims history, but it does allow insurers to vary rates (within limits) based on a few more factors than geography and family composition.
The following states use adjusted community rating in the individual market: Maine, Massachusetts, New Jersey (for plans that do not include all of the mandated benefits of the standard community-rated plans, called "Basic and Essential") and Oregon.
If you live in one of these mostly northern states and you're contemplating moving to one of the southern retirement havens, it maybe wise to maintain your northern home as your official residence, at least until you're old enough to be eligible for Medicare.
Insurance through your business
Another possibility for those who are having trouble finding suitable coverage is to start a small business and insure yourself. Businesses with two to 50 employees are HIPAA eligible, according to federal law, which means that insurers have to offer employees of small businesses a policy, no matter how old or unhealthy they are.
To qualify, your business has to make enough money that the IRS doesn't consider you a hobby. Selling used golf balls on eBay could potentially qualify, assuming you earn enough to cover the cost of the insurance. In some states the enterprise has to be incorporated.
The federal government defines husband-and-wife businesses as having a single employee and, thus, they are not HIPAA-eligible. But some states have modified laws to cover single-employee companies. These states are Colorado, Connecticut, Delaware, Florida, Hawaii, Maine, Massachusetts, Mississippi, New Hampshire, North Carolina, Rhode Island and Vermont.
The price of this small-business group insurance can be high, depending on the state. Again community rating is the best pricing for most over-50 buyers. New York and Vermont use pure community rating in the small business market. These states use adjusted community rating for small business group insurance: Connecticut, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, Oregon, Pennsylvania (only for some Blue Cross/Blue Shield plans and HMOs), Rhode Island and Washington.