January 1, 2010

Q: I am a 25 year old diabetic living in Sacramento. I am currently without health insurance, and am waiting the 90 days until my insurance from my new job kicks in. Unfortunately for me, COBRA isn't an option. The long and short of it is that I desperately need health insurance, but no one will insure me, not even for 90 days. As a diabetic, I cannot go without my medication, and I can't afford to pay for my medicine out of pocket. Is there anyone willing to temporarily insure me?

A: Yes, all diabetics have access to health insurance since the implementation of federal law known as HIPAA.  But that really is not the problem in your situation. The problem here is not access to insurance but rather access to money. You state that you do not have money to pay for 3 months' worth of diabetes medication, which is significantly les than the price of three months' health insurance. Guaranteed issue health insurance runs $600 per month or more in California (depending on location) and still does not cover 100% of the cost of diabetic treatment. A typical working person in California covered under an employer-provided health plan contributes $1,000 to $2,000 per year toward out-of-pocket costs for their own care in addition to part of the cost of the health insurance. Three months of diabetic medicines generally cost much less than the cost of insurance plus related co-pays and deductibles. So it seems from your statement likely that even if you found the full coverage guaranteed issue insurance plan available to diabetics in your area, you would not be able to pay for it. We sympathize with your situation that diabetics, as a group, have an extremely difficult time managing the financial burdens of their medical condition. But in your case, it would not be appropriate to recommend a specific insurance plan at this time when you do not have money to even pay for the immediate cost of required medicines. At a minimum, if you have no other options, download a free discount prescription drug card from MedSave.com that at least gives a small discount on these expenses.

Your current problem emphasizes the fact that your diabetes will likely remain the largest single factor determining your future financial security. The even worst news is that the total cost of your health care will likely be 1/3 to 1/2 of your lifetime earnings, making it more difficult to keep a financial cushion in the event of any unexpected expense. The problem may become less visible once employer-provided benefits start, but the problem will not go away. Do not ignore this point but use this as a warning to make some lifetime changes to your personal finances and health care. You should resolve to take steps to ensure that you will not ever allow yourself to be placed i this vulnerable position again. Resolve to follow basic but crucial financial planning steps like having ready access to emergency funds, having a retirement account or HSA with emergency health care funds, keeping information available on your state's health insurance plan for diabetics will all help you maintain financial independence the next time a change in employer-provided insurance is necessary.

It may be only marginally comforting to know that the government picks up the health care costs once your assets are depleted and you have no ability to repay based on future income. But until then, it is your personal responsibility to make arrangements for emergency care during periods of life transition. Unfortunately, many diabetics faced with the overwhelming burden of medical expenses simply give up and take the attitude that it is the government's or public's responsibility to provide for their care. This is a sure path to financial ruin. You can make the decision to take charge of your health care finances beginning now. Personal trust account, using "protected" assets and the supplemental insurance plan listed on this Web site can all help lessen the financial risks. There are also more "advanced" financial planning strategies that diabetics can take to ensure their financial security, but in any case it is ultimately up to you to make it happen.

See the article "Health Insurance Problems for Diabetics" that discusses this topic in more detail.

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