insurance

Health insurance for pre-existing condition?

How much is that discount worth? It so happens that Blair had knee surgery recently.

"The bill was $15,000, but after it was run through my insurance, it came to $3,200," he says. "With a CSD, you just give them your card because you do have insurance; it's not an exclusion, and they don't rate you up."

A Humana example uses a customer with psoriasis whose condition requires light therapy at a doctor's office and a prescription cream. If his condition was excluded from coverage, he'd pay $6,000 out of pocket -- with a CSD of $2,500, he'd save $3,500.

CSD caveats

Not surprisingly, condition-specific deductibles are not available for every health condition; insurers need to know what the fixed costs of a condition might be in order to price the deductible accordingly. But they are available for some medications for controllable conditions such as asthma.

"There's a list; they know what they can do CSDs on and what they can't," says Blair. "If somebody had, say, two herniated discs in their back and it was bad, the company probably wouldn't put a CSD on it because you just don't know where that back surgery is going to go. They'll exclude that. You're not going to get a CSD on high blood pressure or diabetes either. Diabetes is pretty much a decline everywhere you go."

While a CSD could save you thousands in out-of-pocket expenses each year for an excluded health condition today, they're likely to disappear from the health insurance landscape entirely by 2014, when a provision in the Affordable Care Act prohibiting all health discrimination based on pre-existing conditions takes effect.

"Can an Assurant- or Humana-type condition-specific deductible survive in 2014? The answer is, probably not," says Deborah Chollet, a senior fellow at Mathematica Policy Research in Washington, D.C., who is helping states set up the new reform-mandated health exchanges. "The reason is, group plans are not able to discriminate between individuals based on their health status. In general, it will be very hard for these products to survive in the market because they go hand-in-glove with medical underwriting, and there will not be medical underwriting by 2014."

Chollet says that's all good news for Americans with health conditions.

"At least they will get much better coverage for their premium dollar, if not also get a reduction in premium," she says.

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