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Health Insurance Obstacles Faced By Diabetics

January 1, 2010

Diabetics, as a group, face the most difficult task finding and keeping health insurance.  Legal, economic and psychological factors all pose obstacles to diabetics who need to be covered under health insurance plans.  Those who pay for their own health coverage must overcome significant financial hurdles. MedSave.com recently updated the article "Health Insurance for Diabetics" to address and outline the four basic ways that a diabetic can find health insurance.  The update includes links to the most current resources and contact information in each state. This article addresses some of the more practical issues and questions most commonly asked by diabetes searching for health insurance. 

Diabetics need to pay close attention to the health insurance laws in their state that are designed to ensure that they have access to medical care through health insurance plans.  Unfortunately, these state laws are designed to ensure that insurance will be available but are not designed to ensure that insurance is affordable. Many diabetics are simply unable or unwilling to afford the cost of available health insurance. Many have a need to search for supplemental or less expensive coverage options and are therefore more likely to be vulnerable to disreputable health plans and outright scams, especially those promoted on the Internet.

Most questions from diabetics fall into one of these seven areas:

1) Finding Open Enrollment Major Medical Plans - Each state now has at least one health insurance plan open to all individuals including diabetics. In most states this is offered through a high-risk health insurance pool that covers pre-existing conditions after satisfying the waiting period (usually 6 to 18 months). These are commonly referred to as "guaranteed issue", "high risk insurance pool" or "open enrollment" plans. Those who had prior insurance coverage are exempt from the waiting period but because these rules vary state-to-state, it is best to look up your state's specific laws before you change health plans. These insurance plans are not available on the Internet so enrollment is not supported by MedSave.com. The best approach is to visit your state insurance department Web site for the name of this special insurance provider (usually a local Blue Cross Association) and call the insurer directly for more information. These plans can be very expensive to middle-income individuals, costing up to 100% of personal income above poverty level.  Many diabetics are reluctant to alter lifestyle or spending patterns in order to pay for health insurance.   Those whose income and assets are below the poverty level are provided free medical care through welfare plans, but there is an affordability gap for a large group of lower and middle income diabetics.  Health insurance policies for diabetics are generally not available online and are not available through insurance agents.  OnlineAdviser support service offers help finding and enrolling in with these plans for a fee.

2) Employer-Provided Group Health Insurance Plans - Group insurance plans always accept diabetic employees but require that the applicant be a full time employee who has been employed for the waiting period established by the health plan (usually 30 to 90 days) and be working at least 30 hours per week. Specific eligibility provisions vary as set by state law and the employer. In order to get gain immediate coverage under an employer-provided health plan for diabetes treatment, it is important to have a "certificate of creditable coverage" from your prior health plan. See the article "Understanding a Certificate of Creditable Coverage" and the "short term health insurance" below for more information.
 

3) COBRA Continuation - Individuals leaving a group plan usually have the right to continue that health insurance for 18 months (36 months in some cases) by paying the full amount of the premium cost plus a small administrative fee.  This program is authorized under federal law but is most commonly administered by the health insurance company.  Enrollment is simply a matter of notifying the employer or the insurer and paying the premium.  Difficulties arise when COBRA is not available because: 1) the employer was not subject to COBRA law because of the number of employees, 2) the employer terminated the group health insurance plan, or 3) a communication problem caused a delay in the enrollment process.  Those who do successfully enroll in COBRA are usually able to convert to individual insurance with the same carrier or transfer to the state's open enrollment high risk pool health insurance without difficulty.  More information on COBRA-related issues is available at www.COBRAplan.com.

4) Short Term Health Insurance- Commercial short-term health insurance is available to diabetics in most states who are not insulin-dependent at www.MedSave.com listed under the product brand names "Secure STM", "Secure Lite" "Secure STM 12 x 3" (a three year policy), "Simple STM" and "American Health Shield". Although these policies last only 6 months, most states allow subsequent policies to stretch the coverage to fill longer time periods. Short-term policies never cover pre-existing medical conditions, but are a great value to diabetics in covering any other problems that might come up in the near future or those who will soon be enrolled in an employer-provided health plan. This coverage is only ¼ to ½ of the cost of other health plans. Most importantly, this is the least expensive way for a person who is in between jobs to ensure that the next employer's health plan will offer coverage for a pre-existing diabetic condition from the first day of coverage - without the need to satisfy a waiting period again. These plans are not available in all states and are not available to patients already using insulin.

5) Long Term Commercial Health Insurance - Few good commercial long term health insurance policies are available to diabetics. Almost all o the available plans are supplemental insurance rather than comprehensive major medical insurance. This means that the policy defines and limits the maximum dollar benefit for each type of expense. In contrast, major medical insurance broadly covers "ordinary and necessary medical expenses". The following long term renewable supplemental health plans are available to diabetics:

ValueHealth Insurance - This hospitalization supplement insurance is available at http://www.medsave.com /ValueHealth-insurance.htm in all states except AK, CT, NJ, WA and WY to applicants under age 65 with controlled diabetes. This insurance pays expenses for pre-existing diabetes after the policy has been in force for 12 months. This is a limited benefit insurance policy that pays a specific dollar amount that is usually less than the amount charged by a medical provider.  The policy is renewable until age 65.  Maximum benefits, premium rates and enrollment form are included in the enrollment kit. This insurance is available and paid in addition to any other insurance that may be available.

ValueMed Insurance - This supplemental insurance is available at http://www.medsave.com /ValueMed-health-insurance.htm  in all states except CT, KS, MN, NC, ND, NJ, NY, RI, VT and WA to applicants under age 65 with non-insulin dependent diabetes.  The coverage provided is generally less than "ValueHealth" listed above but the medical eligibility is more liberal.  This insurance pays expenses for pre-existing diabetes after the policy has been in force for 12 months. This is a limited benefit insurance policy that pays a specific dollar amount that is less than the amount charged by a medical provider.  The policy is renewable until age 65.  Maximum benefits, premium rates and enrollment form are included in the enrollment kit. This insurance is available and paid in addition to any other insurance that may be available.

Basic Health Insurance - The low cost insurance available under the trade name "Basic Health Insurance" at http://www.basichealthinsurance.net is available in most states to all applicants regardless of health history. These plans pay for diabetic treatment after 6 months. But as the name implies, these are limited insurance policies that will not pay for catastrophic bills. Be aware that this insurance plan pays a specific dollar amount that is almost always less than the amount charges by a medical provider, but it may still be better than no insurance at all. The complete listing of benefits, rates and enrollment are offered entirely online. Some diabetics use this insurance to pay for deductibles, co-pays and out-of-pocket costs not covered by other health insurance because the benefits are paid in addition to (no offset by) other health insurance plans. These plans are not available in all states.

Core Health Insurance - The most versatile guaranteed issue health insurance for diabetics is "Core Health Insurance". This is a limited benefit supplemental insurance but the benefits can be so strong that some members are tempted to compare it to comprehensive major medical insurance. It is good insurance but there is still a big difference in coverage between the two types of health insurance, especially in the event of a catastrophic claim. it is not comprehensive. This insurance is offered at different price levels with corresponding different levels of benefits. The least expensive plan is priced much lower than major medical insurance but the highest level of benefits can be priced as high as full coverage plans. The rich "front-end" benefits are appealing, but add to the cost of this insurance. 

6) Discount Plans - When a significant part of health costs are paid out-of-pocket at retail price, a discount plan can help reduce costs. These are not insurance plans but rather just pricing discount arrangements. Discount plans are available for hospitals, doctors, dentists, prescription and some non-prescription drugs. Each discount plan works a little differently and discounts may vary. The best way to see if a discount plan will work is to enroll and test it. If the savings are not substantially impressive, any reputable provider will refund your membership fees. See

A good discount plan should cost no more than $20 per month and offer a full refund of all fees for a reasonable time (at least 10 days, 30 days is preferable) if you are not satisfied. The best of these discount plans are available online at http://www.ehealthdiscountplan.com.  These plans are issued by a large national health plan administrator and used the same national Preferred Provider network (PHCS) that was highly rated by Consumer Reports magazine. There is a complete satisfaction or full refund guarantee for 30 days to give members a chance to test the discounts on their own.  Problems arise when diabetics are lured into discount plans with misleading advertising that seem to offer greater benefits.

As a side note: Consider that some of the low priced "health plans" advertised to diabetics on the Internet and through bulk e-mail are not health insurance at all but health discount plans. Many buyers have been fooled into thinking these discount health plans are insurance plans. Some of these plans combine the discount plan with a small supplemental insurance for the primary purpose of incorporating the word "insurance" in their advertising when in reality, the primary benefit comes from a discount pricing arrangement..


7) Health Savings Accounts - Individual health insurance plans for diabetics that allow participation in the Health Savings Account (HSA) program are not yet available to diabetics in most states. Even in those states where this option is available, the required high deductible insurance may not be priced attractively compared to low-deductible managed care insurance options. For example, a full coverage HMO might be available in Maryland for $500 per month but a $2500 deductible HSA-qualified insurance policy might cost $550 per month so few would choose this option.  This may change in the future as Congress moves toward expanding HSA coverage by loosening the laws that govern them. We conclude that Health Savings Accounts are not an economically viable option for most diabetics who buy their own insurance outside of a group health plan.
If you do have HSA-qualified health insurance, then a free or low-cost Health Savings account can be added online at Healthsavingsaccount-hsa.com.  More information about Health Savings Accounts, including an extensive listing of "Frequently Asked Questions" is available at http://www.healthsavingsaccount-hsa.com

A final note about Health Savings Accounts: any of the supplemental insurance plans listed above can be combined with a Health Savings Account without defeating the tax advantages. This is important because one of the primary objections to using a Health Savings Account is the high insurance deductible. Supplemental insurance (known as "allowable other health insurance") softens the financial risk without sacrificing the tax benefits.

Our overall experience working with individuals across the country indicates that diabetics must wrestle with the reality that their medical condition is the single most significant factor in their future financial welfare. It is expensive to treat diabetes. Diabetes is usually a lifetime issue. The cost of treatment is the largest financial issue the diabetic will face over their lifetime. No one, including our government health insurance programs for the poor, makes it easy to get the best care at an affordable price. The long term prognosis, both from a medical and financial perspective, is not good. Health insurance planning and related financial decision should be "front and center" in all major financial decisions. Some will accept this economic fact and move forward. Others deny this reality and may express frustration and even outrage that their medical problems are not fully covered by our nation's leading health insurance plans. There is no health insurance in existence that satisfactorily addresses all of a diabetic's medical and financial concerns. Still, despite the challenges, most diabetics are able to arrange adequate health insurance that provides satisfactory treatment t a price that, even if not palatable, can at least be financially managed. A long term approach to budgeting that allows a substantial portion of income for major medical and supplemental health insurance is the only reliable approach to this difficult situation.

 

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