Many companies that provide health insurance coverage typically do not provide health insurance to individuals who are considered high risk. One exception to this is if health insurance coverage is provided by a group health insurance plan offered by an employer. Individuals who are high risk are those who have a specific type of health issue also known as a pre-existing condition. One option that is available is to use a state high-risk insurance pool to obtain a health insurance policy.
Deductibles
Deductible for a state high-risk insurance pool have a choice of deductible just like a health insurance policy that was purchased from a private health insurance company. The amount of the deductible for high-risk insurance pool can range from a low of $500 to as high as $5,000 or more depending on what is offered by a particular state. Individuals can also open a Health Savings Account or HSA that uses pretax funds to pay for deductibles and other out-of-pocket costs.
Eligibility
State high-risk insurance pools require individuals to prove eligibility before they can qualify for health coverage. Typically, an individual cannot be eligible for assistance from a state or federal health care program such as Medicare or Medicaid. Individuals will also need to provide information that they are unable to obtain coverage from a private health insurance company. Proof can include a copy of a denial letter or an involuntary-termination notice.
Waiting Periods
Most high-risk insurance pools available in various states do not have any pre-existing exclusion periods. However, there may be a waiting period that applies before coverage will become effective. This is because individuals may wait until they are already sick before applying to their state insurance pool. Waiting periods for high-risk pools can range from six months up to even one year.
Coverage
Coverage and benefits for a high-risk pool are determined by each state that has a high-risk pool available for its residents. As a result, some states, such as California, place limits on the amount of benefits that can be claimed. Annual benefits in California are capped at $75,000 per year with a lifetime maximum of $750,000. Some states, such as Louisiana and Mississippi, exclude certain types of coverage, including mental health and maternity care.
Cost
States that have a high-risk insurance pool typically have rates capped at an amount that can range between 125 percent and 200 percent of rates from the standard market. The average cost per year for an individual in a state health insurance pool is about $7,500 per year or nearly $635 a month. Some states may also offer premium subsides to low-income residents to help with the cost of coverage.
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