When people switch from employer-sponsored group coverage to the individual health insurance market, they usually encounter a few surprises along the way. Even though the actual cost of the policies is lower for individual coverage, most employers pay a good chunk of the premiums on group policies. So having to pay the whole premium on an individual policy can be a big adjustment. And then there’s the issue of underwriting. The application process – complete with questions that delve into every facet of ones medical history over the last decade – can be daunting. And the underwriting process can result in a decline, a policy with higher premiums, or a policy with pre-existing condition exclusions.
United Healthcare has introduced an option called United Health Continuity through Golden Rule, the individual coverage arm of UHC. Here’s the gist of it: people who currently have health insurance and can qualify through the medical underwriting process can buy the option to enroll in an individual Golden Rule policy at a later date – with no additional underwriting – for 20% of the regular premium on the policy. People who are currently sick wouldn’t qualify, but the idea here is to allow people who are healthy now to take advantage of their healthy status and guarantee future insurability. If you already have individual health insurance through a stable, reputable carrier, you don’t have to worry about future underwriting, a job loss, or an employer getting rid of health insurance benefits to cut costs. But for people who rely on an employer to provide health insurance, there’s a degree of uncertainty that Continuity aims to address.
Golden Rule has launched Continuity in 25 states, and is working to roll out the program in the other states where they market policies. Colorado isn’t one of the first 25 states, although Golden Rule is a big part of the individual health insurance market here, so I expect that we’ll see the Continuity option here before long.
I like the outside of the box thinking here, and I can see how an option like this could be beneficial to a select group of people. If you work for a company that provides group health insurance at no cost to you, maybe you don’t mind paying $50 or so every month in out of pocket costs to secure future insurability, especially if you have specific plans to quit your job before you turn 65.
But many people already pay a good chunk of money every month for their health insurance, and the idea of tacking on even more premiums – for whatever reason – isn’t likely to be a very popular option. Also, a lot of people aren’t aware that medical underwriting is used in the individual health insurance market. I think this misconception isn’t as widespread as it used to be, thanks in part to the presidential campaign this year where health insurance was a much-discussed issue. But we still talk to people on a regular basis who question the legality of underwriting, and say “I didn’t think they could do that!?” People without a good understanding of how individual health insurance works probably wouldn’t see any value at all in the Continuity product. Unfortunately, people often find out about the ramifications of underwriting after they need health insurance and have a medical condition. Continuity wouldn’t be any help to them, since they wouldn’t be able to qualify once they’re already ill.
The other issue here is that health care reform of some sort is just around the corner. What form it will take remains to be seen, but some major health insurance carriers are backing a plan to make individual health insurance guaranteed issue as long as there’s a mandate requiring everyone to obtain coverage. Reform of that nature would make a product like Continuity unnecessary.
