Individual health plans are plans you buy on your own, for yourself or for your family. Most companies have on-line tools to help you find out how much a plan will cost.
New Rules in 2014
In 2014, individual health plans will no longer be allowed to refuse to cover you or charge higher premiums because you have a pre-existing condition. And the California Health Benefit Exchange will help people find affordable individual health plans.
Children with Pre-Existing Conditions
The law says that individual health plans cannot deny or limit coverage for a child age 18 or younger because of a pre-existing health condition. But until 2014 the plan can charge a higher premium to cover the child.
You can buy coverage for a child at any time of year. However, there is no limit on the premium except during open enrollment and special enrollment periods. During these periods, the premium for a child with a pre-existing condition can be no more than twice the premium for a healthy child.
- Open enrollment is the month of a child’s birthday. For example, a child born in May has an open enrollment period every year for the entire month of May.
- Late enrollment periods include the time when the child is born, when the child first moves to California, or when the child loses coverage from an employer or from certain government programs like Medi-Cal.
Compare Individual and Group Plans
You should be aware that until 2014, if you have a health condition, it may be hard to buy an individual health plan. If you are age 19 or over, the plan can charge you a higher premium or refuse to insure you at all. It can have an exclusion period for pre-existing conditions – this means it can deny services for your condition for up to 12 months.
However, group health plans, including COBRA and Cal-COBRA, must accept you even if you have a health condition. They may also provide more benefits than an individual health plan.
Please look at your choices carefully if you have a chance to get a group health plan or to continue your group health plan with COBRA/Cal-COBRA. Your options for getting an individual plan may be limited.
Questions and Answers about Individual Insurance and Underwriting
When should I cancel my old health plan if I am applying to a new plan?
You should keep your current health plan until you are sure that your application has been approved, and your new plan starts. Do not cancel your health plan until your new plan starts.
What is underwriting?
When you apply for an individual health plan, the company uses a process called underwriting to look at your age, sex, health history and location to decide how much it will cost to provide your health care.
What are my rights when I apply for an individual plan?
If you are age 19 or older and apply for an individual health plan, the company can deny your application because of your health history.
However, by law, the plan is not allowed to deny your application:
- Just because of your race, color, national origin, ancestry, religion, marital status, or sexual orientation.
- Just because you have a physical or mental disability.
- Just because you have a family history of breast cancer or genetic disease (and are not diagnosed with breast cancer or the genetic disease now).
- Just because you are a victim of domestic violence.
A health plan may not require an HIV test as a part of the application.
What conditions can cause an individual health plan to automatically deny my application?
Conditions vary from plan to plan. They may include, but are not limited to, the following health problems:
Specific health problems:
- Cancer, under treatment
- Current infertility treatment
- Diabetes with complications
- Heart disease
- History of transplant
- Multiple Sclerosis
- Muscular Dystrophy
- Pregnancy, pregnancy of your spouse or significant other, planned surrogacy or adoption in process
- Renal failure or Kidney Dialysis
- Severe mental disorders, such as major depression, bipolar disorder, schizophrenia or psychopathic personalities
- Sleep Apnea
- Systemic Lupus Erythematous
Other problems that might cause a health plan to deny your application:
- Health problems for which you have not completed treatment
- Health problems that a doctor cannot explain
- Health problems for which you have not seen a doctor
What conditions can cause a company to offer me coverage, but charge a higher premium or limit the kinds of plans I can get?
A health plan may offer you coverage but charge a higher premium and/or limit your benefits. This might happen if you had a health problem in the past but you have recovered or you have had no symptoms for some time. It can also happen if you have had minor health problems, now or in the past.
Specific conditions vary from plan to plan. Here are some examples:
- Allergies, whether you are currently being tested or already have a diagnosis
- Breast Implants (non-silicone)
- Ear infections that are controlled with medicine
- Joint sprain or strain, after you are fully recovered
- Lyme's disease, without symptoms after one year
- Migraine headache, if they are mild and infrequent with no emergency room visits
- Mild depression
- Stroke, after 10 years with no problems
Will an individual health plan look at my height and weight when I apply?
Yes. Health plans usually look at your height and weight when you apply. If you are overweight or obese, the plan may refuse to insure you or charge a higher premium.
Some plans use a measurement called the Body Mass Index (BMI). The BMI estimates your ideal weight, based on your height.
- If your BMI is over 39, a health plan will usually not accept you.
- If your BMI is 30-39, a health plan may accept you but charge a higher premium.
- If you have health problems that may be related to your weight, such as diabetes or heart disease, a health plan may refuse to accept you, even if your BMI is under 30.
- You can find out your BMI with an online BMI calculator.
Can a health plan look at my smoking and drinking history when I apply?
Yes. Health plans may look at smoking and drinking history when you apply.
Do all individual plans have the same underwriting guidelines?
No, each health plan has its own underwriting guidelines. Health plans must file the following information with the DMHC:
- Health conditions for which the health plan would automatically deny your application
- Health conditions that the health plan might not approve
- Height and weight standards
- Health history, health care service use, and lifestyles or behaviors that may cause the plan to deny insurance or limit the products they offer you.
Note - the DMHC may not publicly share the specific guidelines for each health plan.
What if no individual plan accepts me because of my health history?
If no health plan will accept you, you may qualify for the Pre-Existing Condition Insurance Plan (PCIP) or the Major Risk Medical Insurance Program ( MRMIP).
Both these programs are for people who cannot buy health insurance because of their health history:
- PCIP was created under the federal health care reform law and is for people who have been uninsured for at least 6 months.
- MRMIP is similar to PCIP, but there are some important differences. Contact these programs or visit their websites to find out which plan may be right for you.
- The PCIP/MRMIP Application and Handbook can help you compare the programs.
What happens if I do not complete my individual plan application fully and honestly?
Health plans use the health history information on your application to decide if they will accept you. Health plans may ask for copies of your medical records to investigate the information you put on your application.
If you intentionally gave false information or if you intentionally left out important facts on your application, the health plan may rescind your coverage. This means that the health plan can cancel your health coverage all the way back to the day it began, as if it never existed. If this happens, the plan will not pay for the cost of health care services you received. It may also be harder for you to get a health plan in the future.
After I am enrolled in an individual plan, can the plan cancel my coverage?
A health plan is allowed to cancel your coverage for the following reasons:
- You did not pay your premiums.
- The company is no longer offering individual plans in California.
- You no longer live or work in the health plan’s service area.
- Your health plan stops offering your particular health plan contract.
- You intentionally provided false information or intentionally left out important facts on your enrollment application. In this case, a plan may cancel, or rescind, your coverage all the way back to the date it started. See the previous question.
What is post claims underwriting?
It is when a health plan changes your benefits or premium because you are diagnosed with a health condition after your plan starts.
A health plan cannot do post claims underwriting. This means that:
- If you are diagnosed with a health condition after your plan starts, the plan cannot change your benefits and premium to include the increased cost of your new health condition.
- The plan must look at your health history and information on your application before accepting you.
- Also, the plan may not rescind or cancel your coverage or limit your benefits unless you had intentionally put false or incomplete information on your application. “Rescind” means to cancel your coverage all the way back to the date it started as if it never existed.
Can I change from one individual plan contract to another one without underwriting?
People covered by an individual plan for at least 18 months have the right to transfer to a different plan contract with the same company.
- You have the right to transfer to any other individual plan contract offered by the same company with equal or lesser benefits. For example, you may be able to transfer from a plan contract with a $250 deductible to a plan contract with a $500 deductible and a lower premium, if the plan offers such a contract.
- You have the right to transfer without the plan looking at your medical history or doing medical underwriting.
- You have the right to transfer at least once per year.
- The plan should send you a notice about your right to transfer whenever your plan changes its premium. This notice must tell you how you can get information from the plan about contracts available to you. This notice must also tell you that you may not be able to return to your current contract after a transfer.
Each company must rank its individual plan contracts. This will allow you to identify which contracts have equal or lesser benefits compared to your current contract. The company must show the ranking on its website or send it to you when you ask. Each company must update its ranking whenever the DMHC approves a new contract or benefit design. The DMHC does not review the ranking.
The right to transfer does not apply to people who are enrolled in the following kinds of plans:
- HIPAA guaranteed-issue individual plans
- Conversion coverage
- Specialized plans such as dental plans, vision plans, etc.
- Access for Infants and Mothers (AIM)
- Healthy Families
- Group health plans