Health Insurance: Getting Turned Down Faster Than You Can Say 'Pre-Existing Condition'

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You're suffering from diabetes or cancer.

Perhaps you've dealt with a substance abuse issue or bipolar disorder in your past.

Maybe you're just a little too heavy for your height.

If any of those statements describe you and you need health insurance -- forget it.

Insurance underwriters will spot your disease-ridden background faster than you can say pre-existing condition.

"It can be a real nightmare for people," said Tom Russell, health insurance broker. "It's a minefield out there. A lot of what's sold today is plain junk."

Nearly 42 million or about 17 percent of Americans are uninsured, according to the Centers for Disease Control, and Arizona's record is worse than the national average.

Twenty-one percent of Arizonans live without health coverage. Only three other states in the nation -- Louisiana, Texas and New Mexico -- have a higher uninsured population.

Most people -- about 63 percent of those covered -- receive medical insurance through their employer.

Large companies can tap into group policies, which spread the risk through a greater number of people. This lowers the out-of-pocket costs for their employees.

But small-business owners, like Payson resident Mark Green, face high premiums and few choices.

"For the number of employees I have, (health insurance) is cost prohibitive," Green said.

From 2001 to 2004, according to the Kaiser Family Foundation, workers receiving health coverage fell 4 percent -- five million fewer jobs offer health benefits today than did in 2001.

Though Green does provide insurance, it cuts into the bottom line -- for his business and for his employees.

Issues surrounding health insurance are endless, Russell said, and if you're not on a group health plan the options are limited.

"People are just stuck," he said. "This is the dark side of health insurance."

Dark and expensive.

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Tom Russell says always read the fine print before choosing a health insurance policy.

Enter the recently unemployed. For many, the best option is COBRA, the Consolidated Omnibus Budget Reconciliation Act of 1986, a federal law that carries an economic bite as fierce as its acronym.

COBRA secures the continuation of benefits after an employee's hours are reduced or they leave their job.

But it's not cheap. Workers who opt for COBRA pay the entire premium, often reaching several hundred dollars a month, and the program only lasts 36 months.

If you can't afford COBRA, the choices are slim, especially if you have pre-existing conditions.

Deborah Hughes, a local real estate agent, is one of those hard-to-insure cases.

She carried an individual policy with Blue Cross/Blue Shield of Arizona, and was treated for high cholesterol.

She eventually dropped her coverage to join her husband's health plan.

When she attempted to apply for another individual policy through Blue Cross/Blue Shield, the company unearthed her medical records and denied her.

The high cholesterol counted as a pre-existing condition.

"I felt hopeless," said Hughes. "I tried to appeal. They still turned me down. It didn't matter."

Hughes has since joined a plan that serves the self-employed.

Individual plans, Russell said, are a good choice if the applicant is healthy, but a nightmare for those with tainted backgrounds.

"Your medical history is scrutinized to get a policy," Russell said. "When you do apply, you give the right for the insurance company to report their findings to the Medical Insurance Board. If you are turned down, it will show up."

The Medical Insurance Board, or MIB, is not unlike a credit-reporting agency. It helps underwriters determine risk, thereby alleviating fraud.

"It's hard to lie on applications," said Russell. "Every claim is investigated. They can rescind the policy back to the issue date and then sue you for the damages."

If you've exhausted all your options and you still don't have health insurance, the financially indigent can apply for the Arizona Health Care Cost Containment System or AHCCCS.

The program bypasses the underwriting process. However, if an applicant earns more than $798 a month, it's time to look elsewhere.

Pending legislation could provide an answer. If House Bill 2658 is passed, the uninsurable can breathe a sigh of relief when the law goes into effect Dec. 31, 2006.

For more information, visit: www.id.state.az.us or call (800) 544-9208.

To find out what the insurance companies are saying about you, call the Medical Insurance Board at (866) 692-6901.

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