If You Lose Your Health Insurance

If you’ve taken early retirement or lost your job, you’ll need health insurance to bridge the gap until you qualify for Medicare at 65. Although premiums in the non–group market rise with age, there’s a good chance you’ll find coverage to tide you over. The key is to consider all sources of coverage, including your employer, private policies and state-run programs.The price you pay depends on where you live, your health and the insurer’s rules. In Arizona and Florida, insurers can set any premium they want or reject you if you have a medical condition. In New Jersey and New York, insurers can’t turn you down based on illness and premiums for those with medical conditions are relatively affordable. (Visit www.healthinsuranceinfo.net to check coverage in your state.)

You can save time, and maybe money, by hiring a local insurance broker. You can find a broker through the National Association of Health Underwriters (www.nahu.org; 703-276-0220). You can also compare policies on eHealthInsurance.com (800-977-8860).

You’re most likely to get affordable coverage if you’re healthy. “It is very difficult to get medical insurance if you have any condition, as small as high blood pressure or cholesterol,” says Ron Walls, an insurance agent in Kissimmee, Fla. But it’s not impossible, although the costs could be steep. Each insurer has its own coverage rules, so it pays to check out many companies. For example, some companies offer coverage to individuals who have survived cancer for a number of years. If an insurer rejects you, ask for a written explanation. An insurer could change its mind if your physician provides details on how you’ve been managing a condition.

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One way to reduce premiums is to raise your deductible. For instance, Blue Shield of California offers a PPO policy with a $500 deductible that costs $1,064 a month for a healthy 56-year-old male, but the premium drops to $405 for a similar policy with a $2,000 deductible. Another option could be an HMO. In Miami, a 56-year-old male in good health can buy PPO coverage for a monthly premium of $625, but would pay $315 with an HMO.

Check What’s Covered

But coverage that’s too cheap could be deficient. Ask for a list of all covered and excluded services. Make sure that the policy includes chemotherapy as well as prescription-drug coverage. If you need insurance for a while, buy a guaranteed renewable policy, which the insurer has to renew, although premiums can rise. “If Medicare will kick in in six months, a nonrenewable policy may make sense,” says Karen Pollitz, project director of Georgetown University’s Health Policy Institute. “Otherwise, you’re playing with fire.”

As you search the market, you should continue coverage with your former employer under the federal COBRA law. You’ll pay the full premium yourself, but it may be worth it if you have a medical condition. In most cases, COBRA coverage is available for 18 months.

If you’re rejected by commercial insurers, you might be able to turn to a state-run, high-risk pool. About 30 states extend coverage to individuals who are otherwise uninsurable, although rates are usually higher than in the private market. In Minnesota, a 50-year-old woman can buy a policy with a $500 deductible for $448 a month. But that’s the low end. When Nancy Gerber, 57, of Spokane, Wash., lost private coverage last summer after recovering from uterine cancer, the state pool offered her coverage for about $1,000 a month.Also, consider coverage under the federal Health Insurance Portability and Accountability Act. HIPAA requires insurers to provide you with coverage after you exhaust COBRA no matter what kind of medical condition you have. Premiums tend to be expensive.

Before you buy, check with your state insurance commissioner for any complaints. (Visit the National Association of Insurance Commissioners at www.naic.org and link to your state.)