HIPAA and Local Individual Health Insurance

I am not a wonk, but I think the same rules apply to HIPAA here as in the states. Now, do I really believe everyone here is following those rules????

Ah, my wise friend East Ender, you have nailed the real question.

One of the sources for personal health insurance that is often cited on this board explicitly states that getting a policy requires evaluation by an underwriter, and that benefits for pre-existing conditions are excluded for two years. Both of those practices are prohibited by HIPAA for people who are losing their group coverage who meet certain other conditions and who acquire their new individual health insurance within 63 days of losing their group coverage.

It's not clear if the company offering these policies is based in the US or not, but I'm not sure that should matter -- since HIPAA was created to protect individuals, it seems to me that any company that sells health insurance policies to US individuals or groups should be required to comply with the law.

Goodness knows how and where one even begins to get these provisions re: individual coverage enforced without being prepared to get blackballed by agents everywhere and to potentially pay years of health expenses out of pocket while the system does its thing.

Gah - what a depressing thought.

Thanks, East Ender, for the reply.

Before leaving my job and moving to STX I contacted HIPAA officials through their web site. I was assured that HIPAA laws are in effect in the US Virgin Islands. I am living with ovarian cancer and had to be very sure I could be covered by insurance if I needed to change. The folks that contacted me through the HIPAA web site were very reassuring. Hope that helps somewhat.

travelwoman,

So glad to hear from you! Hope all is well in your life -- I think of you quite often. 🙂 (I'm still bummed my body wasn't cooperating when you made your first visit last year.)

Thanks for the info about HIPAA -- it sure does help. I'm very well versed in the group coverage aspects of the law but knew very little about individual benefits. Am rather glad this friend asked as, like you, this is something I may need to deal with, too.

Well that answers the big question nicely -- and what a relief it is to know. Thank you again for the definite answer and assurances that there is help out there.

--HC

travelwoman,

Brace yourself -- in fact, you'd better sit down for this one. According to an on-island insurance broker, health insurance companies who come in to do business in the USVI are required to provide coverage to individuals who are converting to individual coverage from a group policy. However, these companies are guaranteed the right to engage in underwriting and to take into acoount pre-existing conditions. They are required to consider credit for previous continuous coverage.

What this boils down to, according to this one agent, is that while the company must cover you, they have the right to increase your deductible based on your medical conditions. This agent has seen one company that normally has a $500 annual deductible require $10k per year deductibles for individuals with hypertension and even a few $20k per year deductibles.

This flies in the face of every protection I understood HIPAA to provide, and I will continue to try and clarify the whole mess. Just needed to pass share the news in the hopes that I wouldn't be alone in my dispair over/disdain of these practices. After all, isn't the whole purpose of insurance to average risk out over a large population? How is that accomplished if those who are most at risk are paying thousands of dollars more than everyone else -- I mean why even bother with insurance?

--HC
~Grumbling into her iced tea and shaking her head~

According to my agent here in the states, there are at least 7 criteria that allow you to be eligable for Health Insurance under HIPPA. If you meet those you can be covered under a stand alone policy if you have lost your group coverage.

However, it does allow the insurer to take into consideration any pre-existing conditions and 'underwrite' your rates based on those conditions.

Hope this makes it a bit clearer and doesn't muddy the water...

--Paula

Thank you Paula!

I've talked with another insurance agent here on STX. I was told by him that not only could the companies that provide individual coverage in the VI underwrite, they can also deny. When I informed hkim that he was mistaken ablout them being able to deny folks who met specific criteria, he basically told me I didnn't know what I was talking about because that only applies to greoup to group coverage scenarios.

My friend ended up calling the US Department of Labor Employee Benefits division and talked to one of their benefit counselors (who, coincidentally, used to work in their Puerto Rico office that also served the USVI). The benefits counselor confirmed everything that Paula's agent told her, and said that the agent who said you could be denied coverage was flat out wrong, as long as you met the three criteria HIPAA sets fokrth for those who lose group coverage and need to get an individual policy. My buddy also said the guy he spoke with was extremely friendly, knowledgeable, and said he loved "educating" employers and insurance companies about their obligations under the law" and would be happy to help if my friend ran into any difficulties. He even gave my friend the number for his direct line!

It seems caveat emptor must be your mantra should you need to buy health insurance on island because not all agents who provide individual coverage know the law themselves and/or require the health insurance companies that serve the islands to comply with the law.

--HC

The reality is that companies can determine who they want to insure by using their underwriting" analysis to determine premiums. Yes, you can get insurance if you have been in a group and have not gone >63 days with out continuous coverage and a few other scenarios.....the point is that even if you meet the guidelines of HIPAA - health history will be asked for underwriting purposes and premiums will be accessed accordingly. You will get a policy but may not be able to afford the premium which is essence makes many people unable to continue their coverage. It is the same way in the states and is the reason that there are so many working uninsured if their employer doesn't provide coverage.

Remember too that there is a national reporting bureau (much like a credit bureau with health history) that you will most likely be asked to sign a release to allow for underwritng purposes.

Insurance companies aren't evil - but they are first and foremost a business and will price to protect themselves and their stock holders. I use to do pricing for small groups (which included self employed groups of 1 person). Look at what the fees are for a few tests and office visit not to mention treatment for a major illness and you will see what I mean......I have seen policies written for individuals with AIDS, cancers, etc. Premiums are high but better than being uninsured. The bottomline is you may as well disclose your health history.......it will be learned like it or not.

Thankfully, I am covered under a group policy that will continue, and then will add onto my husband's group policy as a secondary. I have, however met one person who did work at home, hired a few family members as "employees" and was able to get a 'group policy' to cover herself and a few needy relatives. Not sure how it all came about.
I am just thankful to have good insurance; and think it's disgracefull that we can spend billions destroying other countries, but have our own citizens without health coverage.
---also grumbling in my ice tea, and shaking my head

p.s. to Hip Crip - did you know we now live on St Croix. I think of you when we go to Off The Wall - perhaps we can still meet one day.