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Reliable Coverage

Except for some coverage such as MEWA employer plans operating under federal law, all genuine low cost health insurance is regulated health insurance, licensed by the state in which it is sold. If any health expense reimbursement operation is not registered with and regulated by the state, it should not be dignified by calling it "health insurance". Only with oversight by a state agency, can the consumer have any confidence that the operation is likely to be collecting enough money to pay claims and not siphoning off income for purposes other than paying health insurance claims and legitimate operating expenses.

Individual Coverage Issues

In most states, for an individual not covered by an employer or government program, the protection for getting low cost health insurance has some assurances but is also limited. This is also true for then keeping individual health insurance. Once individual health insurance is obtained it can usually be kept, no matter how one's health status may change, but there is no guarantee of that.

The health insurance company may go out of business. It may stay in business, but quit the health insurance business. It may stay in the health insurance business, but withdraw from a particular state. Either way, you could lose low cost health insurance after your health changes, developing what would then be a pre-existing condition, limiting what health insurance you may then obtain.

The health insurance renewal premiums may increase so much that it becomes unaffordable. This is especially true if the practices of a health insurance company result in there being blocks of business that are closed off from new entries. For example, if new low cost health insurance plans are repeatedly introduced so that prior plans are no longer sold and the premiums for everyone on the prior plan is based on the claims of only those on that prior plan, then that creates an isolated block of health insurance business.

Isolated blocks can also be created if the health insurance company closes off all coverage issued in a given period of time from new entries and bases the premium for that block on the claims of that block.

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People who still have good health tend to shop and change to low cost health insurance. Those who have developed a serious health problem while covered, cannot change to another individual health insurance, unless a law mandates otherwise. That increases the claim cost on the average for the isolated block of health insurance business. That increases the premiums for that health insurance block. That increases the impetus for the healthy to quit that health insurance plan. That increases the average claims cost of that health insurance even more. The price death spiral now causes the health insurance plan to be unaffordable. So much for reliable health insurance.

If you want to get individual low cost health insurance that you can keep for many years, buy one from a company whose practices result in the most price stability. Don't expect the issue to be expounded on in the health insurance brochure or plan description. If you contact us, we can help you with your health insurance decision. We can't predict the future, but we can provide health insurance information that will help you make a good decision based on what can be known today.

Laws and Low Cost Health Insurance

Many state and federal laws have been enacted to help those with pre-existing conditions maintain and hold onto health insurance, and to change plans. However, for individuals looking for low cost health insurance these mandates may have significant limitations due to the way insurance operates. Individual insurance companies cannot voluntarily operate like a national health insurance plan would. All the generous health insurance companies went out of business a long time ago.

In a few states, individual residents must be accepted when applying for health insurance, i.e., guaranteed issue. However, in most states, individuals can be declined when applying for health insurance, but there may be a state program that accepts all uninsurable individuals. It is to be expected that all guaranteed issue health insurance will cost more than health insurance for which applicants must qualify.

¶ Nothing here constitutes advice or recommendation of any nature, whether legal, tax, financial planning or otherwise. The comments above represent only the author's understanding of health insurance and may be incorrect or out of date, and should not be relied upon.

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