RV Hometown

Health Insurance Options
Part 2

By Jaimie Hall

Originally published in the May/June 2002 Workamper News. Updated 2007.

See also Part I and Part III

Once you’ve decided on a state, obtaining affordable individual coverage can be a challenge. It may be difficult to find a company that will sell you a policy, particularly if you have a serious medical problem. You may have to prove you are insurable by getting a medical exam and taking tests that rule out certain conditions the company does not want to pay for. Premiums for individual coverage are generally higher than for group coverage and you may get less overall coverage. Companies may exclude treatment for certain conditions which you have had in the past.

In obtaining coverage, you need to weigh your medical needs against what you can afford to get the best coverage for your money. As you may have discovered, the same coverage in one state can cost more than in another.

The main types of policies are:

Evaluating coverage

An independent agent or broker can help you compare several companies. (See resources.) Talk to several to find one you are comfortable with and who offers policies from several companies. Ask questions about each policy and make a comparison chart. An agent can answer many of these questions, but examine the policy itself as well.

Check out the company

Good agents will give you insight into the companies they recommend. Check the financial stability of each company by asking for its A.M. Best rating. It should be an "A" or a "B." Verify this at the A.M. Best Web site.

Check also with the State Insurance Department or Commission about any company you are considering. Make sure the company you are considering is regulated by your state. If not, the company may hike rates or drop coverage for those who file "excessive" claims. Check to see if there is a history in this state of companies filing for bankruptcy and passing the clients over to a "sister" company, at higher rates, thus eliminating high risk clients. In some states, companies will leave the state or stop issuing individual policies if costs get too high.

Reducing monthly premiums

Companies often offer indemnity policies with differing deductibles. The larger the deductible, the lower the monthly premiums. The percentage the company pays after you have paid out your deductible may be either 50% or 80%. If you are relatively healthy and have money in the bank to cover your deductible if something major happens, you might choose a higher deductible and the lower coverage. Or, set up a medical savings account to cover out-of-pocket expenses (check with your tax preparer on eligibility and how to do this).

If both you and your spouse are seeking coverage, check into getting two individual policies rather than a couples policy. For example, for about the same monthly premium, you would each have a $2500 deductible rather than a $5,000 deductible for the two of you. If only one of you becomes ill or has an accident, your insurance will begin coverage after you have paid out $2,500 rather than $5,000.

You may be eligible for group health insurance at lower rates through a group or association. However, caution is advised. RVer Shaneen obtained association health insurance provided by an out-of-state company. Her premiums were jacked up from $125/month to $1800/month after a bout with breast cancer. She had no recourse because Florida does not regulate out-of-state companies. In some states, association policies fall under different regulations as well. Be sure to check with your state insurance department.

Read and study your policy. Remember, a lower premium may indicate poor coverage, not savings.

Pre-existing conditions

Individuals with pre-existing conditions will have more difficulty finding health insurance coverage. Depending on the state, you may be able to obtain coverage through one of the following ways:

Check with the state insurance department to find out if any of these options apply to you.

Part III will provide some ideas and resources for those with no health insurance.

Resources