Healthcare Reform – Good news for those with pre-existing conditions in Georgia

Monday, October 18th, 2010 by Cass Chappell, CFP®

Affordable Care Act gives an option to those for whom healthcare was previously unavailable.

**This post does not address issues for those with Medicaid**

In March of 2010, Congress passed, and President Obama signed, the Affordable Care Act.  This law created a new program, the Pre-Existing Condition Insurance Plan (PCIP), which makes individual health insurance available if you have been denied coverage from a private insurer due to a pre-existing condition.  

Historically, individual insurance was difficult to obtain in Georgia….unless you were perfectly healthy.  Results from a congressional investigation revealed that 1 in 7 applicants was denied health coverage by the four largest for-profit insurers in the U.S., based on pre-existing conditions.   Inexplicably, however, the plan is only available to those who have been uninsured for 6 months or more?!?!?!

Prior to the passage of this law, Georgia was only one of a handful of states that offered no high-risk pool for those able to pay for insurance, but unable to qualify based on a pre-existing condition and their ability to secure coverage through an employer.

“The ability to secure coverage through an employer” was the key factor for many…and something that was on the very top of my list of “Things I Would Change if I Were in Charge”.

When it comes to health insurance, people generally fall into two groups: those who can get group health insurance through their employer and those who can’t (for a variety of reasons).

Group health insurance offered at work – Group Health Insurance

If you were lucky enough to be a part of this group, then you were unlikely to EVER face any issues around securing health insurance.

  • NO pre-existing condition exclusions
  • GUARANTEED acceptance
  • Premium increases are capped

If you leave employment, coverage can be continued for a limited time via COBRA (for companies with more than 20 employees) or Georgia State Continuation (those with less than 20 employees). While each program works differently, in both systems an insured is able secure a “group conversion” policy once these programs run out.  In other words, if you are chronically ill (or even if you just have several health related issues) AND you have group health insurance through your employer, then you will always be able to have insurance – provided you pay the premiums.

No group insurance available – Individual Health Insurance

More and more people are falling into this category. Once upon a time this group consisted of only the self-employed. Unfortunately, premiums for group plans have increased at such a rate that some small businesses have decided these plans are no longer affordable.  Individual insurance in Georgia could be characterized like this:

  • Pre-existing condition exclusions allowed
  • NO guaranteed acceptance
  • Premium increases are unlimited

In other words, if you didn’t have access to group coverage, and you had a pre-existing condition, then it was unlikely that you would be able to get insurance in Georgia at ANY COST…unless you were indigent.  

When someone would call into our office asking about purchasing individual health insurance, unless they were perfectly healthy (and I mean PERFECTLY healthy), the discussion almost always led to the ability to secure group coverage through an employer.   

“Can we “create” a company that would allow you to purchase group health insurance and fall into these far more favorable rules?” In Georgia, you only need two employees to qualify for group coverage.  Maybe your spouse is self-employed and could technically be considered an employee?”

Why should whether or not someone’s employer offers health insurance have any bearing on your ability to not only get health insurance, but also on whether the insurance could contain exclusions?  It shouldn’t!!!  The new PCIP was created to level the playing field in this area.

The creation of this Plan should be a welcome relief for many Georgians who have had difficulty securing quality individual health coverage.  Based on information I found HERE, the plan appears to be affordable too.

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