Individual Health Insurance Sold by Private Insurers

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When do individual health insurers have to sell me a policy?

In Indiana, your ability to buy individual health insurance may depend on your health status.

· In general, companies that sell individual health insurance in Indiana are free to turn you down because of your health status and other factors. When applying for individual coverage, you may be asked questions about health conditions you have now or had in the past. Depending on your health status, insurers might refuse to sell you coverage or they might offer to sell you a policy that has special limitations on what it covers. If you have trouble buying and individual policy, you may be able to get coverage from ICHIA.

However, under no circumstance may you be turned down, charged more or face a pre-existing exclusion period by an individual insurers because of your genetic information. Genetic information includes the results of a genetic test and your family history of health conditions.

· If you are HIPAA eligible, Indiana Comprehensive Health Insurance Association (ICHIA) is your only guaranteed source of individual health insurance.

· In Indiana, newborns, adopted children, and children placed for adoption are automatically covered under the parents’ individual health insurance policy for the first 31 days, if the policy provides coverage for dependents. The insurer may require that the parent enroll the child within the 31 days in order to continue coverage beyond the 31 days.

· If you have a disabled child, that child may remain covered under your individual health insurance policy after he or she reaches the age at which dependent coverage is usually terminated. To qualify, your adult son or daughter must be incapable of self-support because of mental retardation or physical disability and must be chiefly dependent on the policyholder for support. Proof of incapacity must be furnished to the insurer within 31 days of reaching the limiting age and may be required subsequently in the future.

What will my individual health insurance policy cover?

· It depends on what you buy. Indiana does not require health insurers in the individual market to sell standardized policies. Health insurers can design different policies and you will have to read and compare them carefully. Sometimes, individual health insurance policies provide less comprehensive coverage than group health plans, especially for certain services such as maternity care, mental health care, or prescription drugs. However, Indiana does require all individual health insurers to cover certain benefits – such as cancer screening and diabetic supplies and services. Check with the Indiana Department of Insurance for more information about mandated benefits.

What about coverage for my pre-existing condition?

· There are limits on the pre-existing condition exclusion periods that individual health insurers can impose. If they agree to sell you a policy, insurers cannot exclude coverage for your pre-existing condition for longer than 12 months. Health insurers in Indiana may not impose elimination riders, which are amendments to your health insurance contract that permanently exclude coverage for a health condition, body part, or body system. However, insurers in Indiana are permitted to impose waivers, which exclude coverage on your pre-existing conditions for up to 10 years. Insurers are permitted to impose up to 2 waivers per individual.

· There are rules about what counts as a pre-existing condition in individual health insurance in Indiana. A pre-existing condition is anything for which you received medical advice, care, treatment, or diagnosis in the 12 months prior to purchasing coverage. In addition, insurers can count as pre-existing any condition for which the insurer believes most people would have sought care. This is called the prudent person rule.

Pregnancy can be a pre-existing condition in individual health insurance policies, but genetic information cannot. Individual health insurers cannot impose pre-existing condition exclusion periods on newborns, newly adopted children, or children placed for adoption.

· If you make a claim during the first two years of coverage, your insurer can look back to see if the claim is for a condition that would have been considered a pre-existing condition. If the insurer determines that the condition is a pre-existing condition, it can refuse to pay for expenses for that condition.

· You will get credit toward your pre-existing condition exclusion period for any prior coverage you had under a small group health plan. You must not have had a lapse of more than 30 days between your old and new coverage. However, individual health insurers are not required to credit your prior coverage in large group health plans, self-insured group health plans, or other individual health insurance. Also, individual health insurers can refuse to cover you altogether if you have a pre-existing condition.

What can I be charged for an individual health insurance policy?

· Indiana law does not limit what insurers can charge you for health coverage. You can be charged more because of your health status, age, and other factors. However, premiums cannot vary based on your genetic information.

· When your policy is renewed, the premium increases will be based on the claim experience of the pool of people who bought the same policy that you bought. This means that your rates will depend on the health of the entire pool of people with the policy, not your health alone. However, regardless of the claim that you have made, your premiums can increase on other factors, such as your age, or the length of time you have held the policy.

Can my individual health insurance policy be canceled?

· Your coverage cannot be canceled because you get sick. This is called guaranteed renewability. Generally, you have this protection provided that you pay the premiums, do not defraud the company, and, in the case of managed care plans, continue to live in the plan service area.

However, if you make a claim during the first two years of coverage under your policy, the insurer might re-investigate information you provided during the application process to determine whether you made a misstatement.  If so, the insurer might try to take back your policy and void coverage altogether.

If you become involved in one of these “post-claims” investigations, be sure to call the Indiana Department of Insurance to learn more about your rights.

· Some insurance companies sell temporary health insurance policies. Temporary policies are not guaranteed renewable. They will only cover you for a limited time, such as 6 months. If you want to renew coverage under a temporary policy after it expires, you will have to reapply and there is no guarantee that coverage will be re-issued at all or at the same price.

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