Leaving: Health Insurance: General Advice
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HPAlumnipedia > Leaving > Health Insurance > Advice
Learning about COBRA (COmprehensive Benefits Retention Act): Although www.cobrainsurance.com appears to be a commercial proposition connected with Fortis, it does answer a lot of questions and can be a good starting point.
Alan Silverstein, Fall 2002 (and later):
When I asked the Fortis site for a quote for myself, the result was surprisingly low, comparable to HP option B; however, for limited-term insurance only, and without any PPO (copay) option, which I have come to appreciate with UHC (United Healthcare, the HP PPO medical insurance provider).
Anyway, as you worry about health insurance, consider the following advice:
- Your first priority is to stay healthy and enjoy life.
- Your next priority is to have access to quality medical and dental care if you need it.
- Your next priority (probably) is to gain wealth.
- Carrying insurance to protect your wealth against expensive medical problems comes in fourth. In other words, it's important, but it's not worth losing sleep over medical insurance.
Also, there's no "correct" amount of medical (or any other) insurance. You are paying up front to mitigate risk. Only you can decide how much you want to pay (and to complicate your life) to protect against how much loss.
In particular, life insurance is something you should not buy for life. You should "buy term and invest the difference", with the goal of eventually having enough of an estate and/or independence of your dependents, that you no longer need to carry life insurance at all!
Joyce Kiskis, Dec 2002:
Joyce of Kiskis Insurance Agency, Inc. in northern Colorado (apparently now retired from her agency) wrote several informative emails and gave permission to summarize here...
(Sorry if it's a bit random, I excerpted this from the conversation. -- ajs)
Understanding "out-of-pocket" costs is complex! But it is important to help you make the best choice.
With a PPO plan, in a given calendar year a person has the potential "out of pocket" expense with a major medical bill of both the deductible and the percent up to whatever limit when the insurance company pays 100%. Companies have many options where they encourage you to take more risk -- whether it be in a higher deductible, or sharing a higher percentage of the costs after the deductible, or sharing a limited percent for a longer period of time. Calculating the total out-of-pocket helps you see your overall exposure... and it's usually per person. Money you spend for doctor or Rx copays does not accrue to that out of pocket limit.
Two examples: If you have a $500 deductible and then "80/20% to $5000" your overall out of pocket limit is $1500. If you have a $1000 deductible and then "50/50% to $2500" your overall out of pocket limit is $2250. I've seen dozens of different combinations. The deductible comes first... Then for the next $5000 you pay 20%. The deductible is separate and doesn't become part of the $5000.
...Your HP costs for COBRA are very good! I'd recommend taking it; a lower premium with a high deductible / less benefits wouldn't help while you're unemployed if you get hit with a big expense. However, the one thing that often causes me to recommend not doing COBRA is when a person doesn't find other employment during the 18 months, the plan will end after 18 months and your options for individual insurance may become complicated by a new medical condition. That's called risk. However, the rich benefits / low cost of your COBRA... and your young age and probability of future group benefits would outweigh that risk.
Regarding your interest in the Fortis Value plan (one of many she related to me in a summary on paper -- ajs) -- the slightly lower deductible is far outweighed by the lack of doctor office copay and Rx copay. It also is 50% or an additional $1250 out-of-pocket after the $1000 deductible and that plan has "surcharge fees" for either an outpatient surgery ($250) or a hospital admission ($500) in addition to the regular deductible...
(Regarding someone with a pre-existing condition about to lose COBRA:) If he is in Colorado, he is eligible for CoverColorado... Check out their website or we can mail him information.
Colorado also has a "business group of one" guaranteed issue group benefits for anyone self-employed a minimum of 24 hours/week for a minimum of 12 months. Coverage is available upon initial qualification or annual at your open enrollment / date of birth (up to 31 days following)...
Regarding pre-existing conditions for private (individual) insurance... Pre-existing conditions are an issue when you first apply. Once you have a policy in force and you continue to pay your premium, you are not penalized in any way for changes in health or high claims. (Some states do, but Colorado prohibits that.) Your policy is guaranteed renewable as long as the company remains in business in Colorado and as long as you pay the premium...
It is usually advisable to get off COBRA as soon as feasible so that you don't risk developing a new, chronic health condition and then be unable to move to an individual policy.
When someone exhausts COBRA with Anthem (one of the HP choices for employees and COBRA in Colorado at least -- ajs) and they are offered conversion coverage, that conversion plan is a standard or basic plan (not the regular individual plan offered for sale to the general public)... Pre-existing conditions would be covered... For a price! Conversion plans are 3 to 4 times the going rate!
Alan Silverstein, Apr 2004:
Rumor is that you can request and often be granted an extension to your insurance under COBRA, say for six more months.
Ken Eng, Aug 2005:
If you are one of the lucky ones given 90 days to look for a job in-house, I recommend having yourself, spouse, and children to see their dentist and medical doctors. The trick is get them seen and have the dentist or doctor bill their plans ASAP. If you don't, the medical plans push it out as far as they can and possibly you'll be outside the coverage period. That happened to me on one dental bill. I told him to bill ASAP and instead he waited two months to bill, which caused me to be outside the dental window.
Alan Silverstein, Sep 2005:
I heard that for long-service pre-merger HP employees taking EER, the HP Retiree Medical Plan is cheaper than electing COBRA coverage. The "Leaving HP" Guide doesn't tell you this, so do your homework.
