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Know your options if you or your family need high risk health insurance

Many people have insurance through their employer and those who don’t may or may not be able to find it through individual insurance companies. When you’re a healthy person, finding affordable health insurance is pretty easy. Insurance companies are willing to insure you for a reasonable price because they know that the chance of you costing them a lot of money is slim to none. But, if you’re someone that has an extensive medical history and a pre-existing condition, finding insurance is going to be much harder, at least through the end of 2013. In 2014, the Affordable Care Act (ACA) makes it illegal for insurance companies to discriminate against people with prior medical conditions by charging higher rates, excluding certain conditions and denying coverage entirely. If you need insurance right now though, you need to know where to turn. One option that you need to know is called high risk health insurance.

What is High Risk Health Insurance?

High risk insurance pools are organized by some states to provide insurance for people that can’t find it otherwise. It’s referred to as a pool because that’s the term most commonly used in the insurance agency to describe a large group of insured people. Premiums are normally determined depending on what kind of pool you belong. If you find yourself swimming in the high risk insurance pool, you at least won’t be sinking to the bottom of the pool because of all the money in your pockets. High risk insurance is expensive because those funding it stand to lose a lot of money but it’s better than no insurance at all.

How Do I Buy High Risk Health Insurance?

If it comes down to it and this is your only option, you can obtain coverage a few ways. You can apply through an independent insurance agent who will walk you through the paperwork. If you aren’t sure about the details of high risk health insurance and the different options that you have, it might be a good idea to have someone lead you the process. If you feel confident in your health insurance knowledge, you can also apply through the state. There may be some requirements although the federal government had recently phased out some. Plans may require that you have a pre-existing condition and not have been insured for the past 6 months. That may sound like a long time but if insurance companies keep denying you coverage, it can be easy to be uninsured for 6 months. In the past, some high risk health insurance pools required that you also pass along all your denial letters as proof of your plight but that was recently eliminated.

How Much does High Risk Health Insurance Cost?

It really depends on the state you live in, the coverage you buy and other factors like your condition and age. You are going to pay more than the normal individual would in the insurance market but it won’t exceed 150% of what the normal person pays. While that may seem high, you have to remember that insurers are taking a great monetary risk with a high risk insurance pool.

Fortunately, many states are seeing a reduction in rates thanks to the federal government. Premiums were slashed by as much as 40% in some states but there are others that question how we’re going to make up for the losses.

What Kind of Coverage Does High Risk Health Insurance Offer?

Even though it may feel like you have to jump through hoops just to get insurance coverage, you may feel better knowing that the money you pay is going to provide with traditional health insurance benefits. Of course, just like with any other insurance plan, you’ll have several options to choose from once you’re approved for coverage and selecting the right one will be dependent on your needs. Here are some of the most common options:

  • PPO or a preferred provider organization. This means that there is a network of providers that the insurance company prefers you to use and if you do, they will provide a great amount of coverage. You still have the option of visiting a doctor that isn’t in your network but you may be required to pay a higher fee.
  • HMO or health management organization. With this kind of plan, you can only see providers that are in your network. If you see a doctor or specialist that is not in your provider’s network, your visit isn’t covered. But because of the limitations, this plan may be a more affordable option.
  • HSA or health savings account. Normally combined with a high deductible, this type of insurance option will come with a high deductible but may provide you with the most affordable option given the price of high risk insurance pools. But, with a pre-existing medical condition, it may not be the smartest option unless you can afford the additional out of pocket cost. You can also open an HSA with any other plan if you want to dedicate a certain amount of money solely to medical expenses. The advantage of an HSA versus a normal savings account is that any money you contribute will grow tax free.

You may have a waiting period to receive benefits and be sure to ask your insurance agent how long that wait may be. It will vary according to states and conditions so make sure that you have enough savings built up to cover anything that may happen during the introductory phase of coverage.

Do All States Have High Risk Health Insurance?

No, all states do not have high risk health insurance pools. Currently, only 33 states offer this form of insurance and then there are some states that have no other recourse for someone with a pre-existing condition. These people are the ones who have a very hard time finding coverage and at that point, the best thing to do might just be to move if your health condition needs consistent attention. These states do not have high risk health insurance plans: Idaho, Nevada, Oklahoma, Michigan, Ohio, Tennessee, Georgia, Main, Vermont, New York. Massachusetts, Rhode Island, Pennsylvania, Delaware, Virginia and Hawaii.

If you live in any of the above mentioned states, try to find out if any other options are available for people who cannot find coverage. Independent agents are a good source of information regarding your personal state and they can help you figure out a plan that will work for you.