Individual Health Insurance

Even if your state does not have a law that gives you the right to continue group health care coverage after employment ends, it may have a law that requires health insurance companies to offer you the option of converting your group policy to individual coverage.

Individual coverage typically is much more expensive than group coverage—and the coverage limits are usually much lower than those offered under group coverage. For example, a group health insurance policy often will not have any limit on total benefits paid during your lifetime, while individual coverage often limits total lifetime benefits to $500,000. However, laws that give you the right to convert to individual health coverage usually do not require you to lose your job to be eligible.

If your employer cancels your group health care coverage but continues to employ you—an increasingly common situation—these laws can give you the right to convert to individual coverage until you can find a better insurance deal or a job with better health insurance benefits. You can usually find the laws guaranteeing you the right to convert group health insurance coverage to individual coverage among the statutes governing your state’s insurance industry. Some states have a consumer complaint section in their insurance departments that can help you with this.

Recent research reveals a sickening prognosis: We’re seeing the most rapid rise in health care costs in more than a decade—with a current price tag of about $1.3 trillion.

According to a health insurance trade group, America’s Health Insurance Plans (AHIP), the fingers of blame point in a number of directions, including the health care and drug industries, government—and consumers who want expensive care and more of it. AHIP maintains that spending on health care costs is speeding up at a far faster rate than the rest of the economy for a number of reasons:

Americans are demanding more health services and use them more frequently. While this can translate to longer, healthier lives, it also increases health care spending.

People over 50 use twice as much health care as those in their 20s—and almost four times as much by the time they hit 60. So, as the population ages, the cost of health care rises.

Many of the state-of-the art technologies in vogue and in demand are also expensive to buy, maintain, and operate—significantly increasing costs.

Hospitals are spending more, too—and because more of them are organized as networks, they have more power to bargain on the prices they charge.

Spending on prescription drugs is rising at a double-digit rate—weighing in at $212 billion in 2004. The current craze of advertising directly to consumers puts added pressure on doctors to prescribe what patients request rather than costeffective alternatives.

State and federal government keep passing new legal mandates requiring insurers to cover an increasing variety of services and items—not always in keeping with consumers needs and preferences, but at a greater expense to all.

What you can do to help control the cost of health insurance premiums: Foremost, mind the commonsense urgings to take care of yourself by exercising, eating a balanced diet, maintaining the correct weight, and not smoking. Make sure all the information you give to medical providers is correct and current—and review bills and statements for accuracy. Be aware of public policies that influence the cost of health care—and agitate against those you feel would raise it unnecessarily.

Source: America’s Health Insurance Plans, www.ahip.org, 2005