What is the big deal with needing to keep continuous coverage on your health insurance?

Question

As I understand it, it's only a problem if you get diagnosed with a long term illness b/c then you get declined for coverage on behalf of a pre-existing condition. Obviously, if you get phsyically injured and have to go to the hospital w/o insurance, you're also screwed.

I'm 23. I'm looking at getting a new job, but I have to be at the new place 90 days before benefits kick in. Going on COBRA or getting independent insurance are both really expensive. At my age, I don't antcipate getting diagnosed w/ a disease. An ER visit could happen, but I'm willing to take my chances for a few months? Are these the only two circumstances that can burn me if I go 3 months without continuous coverage? Or is there another reason why so many people say it's HUGE to lose continuous coverage? It seems to me this is true for the baby boomers, but not young kids like me.

Answer 1

Most people who get expensive life threatening illnesses or injuries probably didn't expect that it would happen in the three months prior. As others have pointed out, at your age you should be able to get a high-deductible, short-term policy for <$100 a month. One ER visit in the next three months would likely cost several times that.

Answer 2

Lori S has some great advice, get a short term medical plan. If you get a $2,500 to $5,000 deductible it would only cost about $35 - $60 per month, depending on your location. In most states you can buy right on-line from Blue Cross, Assurant or Golden Rule.

I recently made a mistake and needed an x-ray and 6 stitches on my hand and the hospital bill was $891, then I was allergic to the stitch material so I needed a few follow up visits.

FYI if your employer is required to offer COBRA you can keep it for 18 months then you would be qualified for guaranteed issued coverage under HIPAA laws. COBRA is usually only a good option if you have serious medical conditions.

Since you are going to a new group plan you don't have to worry about pre-existing conditions they only matter when buying your own individual coverage. That's when you have to get coverage within 63 days of your last plan to continue coverage on pre-existing conditions.

But as you said you are young healthy and feel as I did at 23 bullet proof! Just get a short term to protect against the unknown.

Answer 3

It is very important to maintain continuous coverage for 3 reasons:

1. Many Federal and State laws that govern guaranteed issue health plans like COBRA plans and HIPAA plans require that you have done "your part" and maintained continuous coverage as long as you could have in order to be eligible for these types of plans (might not seem like a big deal when you are young and healthy but if something happens then it becomes a big deal).

2. Your pre-existing conditions will always be covered immediately when you get on a new group plan (remember, even small things like acne can be considered a pre-existing condition).

3. All it takes is going without coverage for 1 day to break a leg or have some other large medical bill spring up (the #1 cause of personal bankruptcy in the US is because of medical bills).

You are right: COBRA and all group health insurance is very expensive but individual health insurance is very cheap if you are healthy.

Just remember to choose a reputable company like Blue Cross, United Healthcare, Aetna, Humana, etc. and you can save a lot of money and find a great individual health insurance plan.

Compare quotes and save. Here is some more information on maintaining continuous health insurance coverage:

Answer 4

Going from group insurance to group insurance, it's not a big deal(pre-existing conditions are not counted) but sometimes disasterous things happen through no fault of your own while you are uninsured. Car accidents and simply being in the wrong place at the wrong time. (Karma) Why not look into getting a short term insurance policy that will cover you for something big? Check in your area for an independant agent or broker and see what is available. It's always better to be covered for the big stuff-it can haunt you (and your family-at least emotionally) for a long time.

Answer 5

I did that a lot at your age and other than a serious accident you are right you probably don't need it.

COBRA gives you a month or two to decide so if you land the new job with coverage at 90 you might only have 30 days of no coverage since if you got sick at 55 days you might be able to get COBRA retroactive to the fist day of unemployment. If you don't change jobs the first of the month you might have even less uncovered days.

Answer 6

Yes, those are the only two things that can burn you.

NO ONE, ever thinks they're going to have anything big happen.  Which is why you see so many people here asking why no one will sell them health insurance at a reasonable cost.

The time to buy health insurance, is when you're healthy.  As long as you know that, the $100,000 in unexpected bills you accumulate from ONE bad accident are yours to deal with as you will!