Planning hernia surgery with health insurance

TA | July 18, 2009

Q: My husband has a hernia and will eventually need to have surgery to repair it. He has no symptoms, and we don't think it has been officially diagnosed (he went for an appointment for something unrelated, then, as a "by-the-way" as the doctor was on her way out, asked about a bulge in his groin/abdominal area; she felt it, said it was a hernia, and left without making any notes). We don't have insurance and have been hoping that it would work to get short-term coverage for him such that surgery and pre-/post-op care would be covered. My questions are 1) is this possible, since it (hopefully) isn't a pre-existing condition, 2) for approximately what length of time should he be covered and 3) is there anything that we need to look for, besides prescription coverage, surgery coverage, and other basic, related services?

A: It is great that you are planning for your future health care needs even though this issue is not urgent. It is clear that you recognize the importance of knowing the terminology and coverage provisions of the health insurance plan you are considering. Your question is not a simple one and involves discussing several important considerations of current and future health insurance laws.

First, before addressing the voluntary surgery, you should address the risk of acute immediate medical risks. In term of dollars and impact to your lifestyle, these risks - even if unknown at this time - pose a far greater than the pre-existing medical condition you described. It sounds like you may have a need for permanent insurance over the long term and not short term coverage, so consider this issue before anything else. In some cases short term medical insurance is the only type that is affordable and available, and so there are many advantages to using this type of low cost health insurance. But there are also limitations, and you 

As a stating point, all polices that use the term "major medical insurance" are designed to cover all ordinary and necessary medical expenses above the risk that you elect as the policyholder (deductibles and co-payments). In very general terms, it is not useful in term of personal financial planning, to consider whether specific types of medical expenses are covered. Your question mentions pre and post operation treatment as well as the surgery itself. You can assume that beyond the obviously stated policy provisions (again, deductible, co-payment and pre-existing condition exclusion) that any major medical policy would handle the same procedure basically the same way. In other words, it probably doesn't make sense to shop for coverage that provides best treatment for a hernia operation. Instead, focus on the bigger picture of your overall health care and budget.

Be aware that policies that are not labeled specifically as major medical insurance - typically using the term "limited benefit", "mini-med" or "supplemental insurance" - can provide a useful way to fill in the gaps left by major medical coverage but these are not designed to provide coverage as described in the paragraph above. Next, we should address the issue of "pre-existing medical condition". Other parts of this Web site expand on the details of coverage for pre-existing medical conditions and the fairly complex legal variations under each states' insurance laws. For simplicity in this discussion, let's simply say that if you know that you have a medical problem, then it is a pre-existing condition. Clearly, in this example, the hernia is a pre-existing medical condition.

The next issue to consider is whether the proposed surgery is considered medically necessary. This is an issue determined by the specific medical conditions which vary from case to case and even vary with one person's symptoms over a period of time. For these reasons it is impossible to discuss on a theoretical basis, but it is important to know that: 1) health insurance companies must follow established medical standards of treatment (set by AMA or other professional organization standards) in this determination. Insurance companies may not make the determination on their own outside of medical standards. 2) Some insurance offers coverage regardless of whether the treatment was medically necessary. Supplemental insurance, for example, may provide  a specific payment for each day of hospital admission and does not consider the underlying reason for admission.

Finally, it is important to consider the benefits and limitations of short term major medical insurance as it pertains to a pre-existing medical condition like this. Most health insurance policies (including most public assistance plans and employer-provided group insurance) initially limit the coverage available for pre-existing medical conditions at the beginning of the policy for a new member who previously had a gap in insurance coverage. Short term major medical insurance is valuable for the "Certificate of Creditable Coverage" that gives you the right to waive this waiting period when enrolling in a group or public health insurance plan. In other words, for a relatively small amount of insurance premium cost, you may be able to save the cost of 6 or 12 months (depending on state law) of the far more expensive type of health insurance. When the short term medical insurance expires and you enrolling a Blue Cross / Blue Shield plan, for example, that covers pre-existing conditions, you will not need to wait another 6-12 months before scheduling the surgery. Of course, you could enroll in the most expensive insurance plan right away, but we presume that you would have done so already if you could afford that option now.

In other words, short term medical insurance is not useful for covering the hernia, but is very valuable in helping you work out a plan that will allow you to be able to afford insurance to cover the hernia. Considering the growing national support for a public health insurance option and financial assistance to cover the uninsured, there has never been a more important time to consider short term medical insurance when other options are not available. Those without insurance who wait for the outcome will find themselves at a financial disadvantage regardless of the details of the health reform provisions that eventually become law.

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