Coverage for ongoing pain treatments

TA | September 5, 2008

Q: I am currently under a COBRA plan thru BCBS of Alabama after my employer shut my branch of the company down. My COBRA is good thru August 2009. We live in Indiana and he is a student in Indiana as well. My son is a full time student thru December of this year. He turns 23 on October 30. According to BCBS of Alabama, he will not be insured after October 30. Is this true if I am paying for the COBRA coverage? What are my other options to have insurance on him at least thru April of 2009? He should be employed by this time and have his own insurance. One item that I am concerned about (and you need to know in your review) is pre-existing condition for him. He has a chronic pain problem that we have been trying to resolve for 3-4 years. The specialists have diagnosed this as Myofascial jaw, neck & shoulder pain. Treatment recommendations are to have his molars removed, physical therapy, orthodontics and pain management training. All short term policies that I have reviewed on the internet appear to exclude pre-existing conditions.

A: Yes all short term medical insurance and most long term individual medical policies exclude coverage for pre-existing medical conditions. The important benefit of short term medical insurance is that it preserves the legal right to obtain coverage for pre-existing conditions when your son does qualify for group insurance or a government assisted plan in the future. Without proof of continuous coverage, he would need to satisfy the full waiting period again on his future employer's health plan before qualifying for benefits for his treatment. This protection of coverage for known expenses is the bulk of the real economic value of short term medical insurance although most people think of it as protection from unexpected medical expenses.

Your two options are: 1) convert to an expensive BCBS individual policy using an "individual policy conversion option" to pay for the ongoing treatments or 2) switch to a low cost short term policy and make arrangements for treatment outside of the insurance. We suspect that the first option makes more sense if you intend to have the surgery and therapy now and the second option makes more financial sense if he intend to wait until after the new coverage is in force. BCBS tends to not mention this "individual conversion" option, partly because it is not popular due to the high premium cost and reduced benefits as compared with the group policies. Keep in mind that your out-of-pocket cost will likely be lower under a future employer's plan than an individual BCBS policy, but we do not know for certain at this point.

We suspect (without intending to giving medical advice) that, after weighing the options, many people in this situation would take the less expensive insurance, negotiate cash payment of minimal effective pain management care now and postpone the major treatment until the best insurance coverage (hopefully including dental and disability coverage) is in force.

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