Health Insurance Options for Retirees with Pre-Existing Conditions

If you've had employer-provided health insurance throughout your career, you've likely had a fairly smooth experience when it came to your healthcare needs. Yearly physical with your doctor? No copay. Starting a family? Hospital bills covered. Numerous ER visits with your daredevil child? No problem: All covered.

And now that your kids have flown the coop, your working days are almost over, and you're getting ready to retire. You might even be able to call it quits a few years early if you've had a solid financial plan in place.

But if you've developed a chronic health condition over the years, you may have one lingering question: How do I find health insurance with my pre-existing health condition?

Defining a pre-existing condition

According to HealthCare.gov, a pre-existing condition is a chronic health issue you've had prior to the date that your new health insurance plan starts. Asthma, diabetes, and cancer are three examples of conditions that could be pre-existing.

Common pre-existing conditions

People deal with all sorts of health issues ranging from seasonal allergies to cancer. In fact, an estimated 52 million Americans age 65 and under have a pre-existing condition. But there's no perfect science to determining what, exactly, qualifies as a pre-existing condition. In most cases, the insurance company defines pre-existing conditions.

Here’s a list of the 10 most common pre-existing conditions.

• Acne
• Anxiety
• Diabetes
• Asthma
• Sleep apnea
• Depression
• COPD
• Obesity
• Atherosclerosis
• Cancer

But the list of what insurance companies view as a pre-existing condition is long. Some of the more life-threatening health problems include cardiomyopathy, cirrhosis of the liver, dialysis, and Parkinson’s disease.

So as you figure out how to find medical coverage until you qualify for Medicare, it's worth it to research your options, how they fit your health needs, and whether or not you can afford the costs.

The Health Insurance Marketplace and pre-existing conditions

Thanks to the Affordable Care Act, any plan offered on the Health Insurance Marketplace must include these 10 essential health benefits:

• Ambulatory patient services (no hospital admittance)
• Emergency services
• Hospitalization (for surgical procedures and overnight stays)
• Pregnancy, maternity, and newborn care (before and after birth)
• Mental health and substance use disorder (includes behavioral health treatment)
• Prescription drugs
• Rehabilitative and habilitative services (includes devices)
• Laboratory services
• Preventive and wellness services
• Pediatric services (includes oral and vision)

In some cases, these 10 benefits even extend beyond what's necessary: After all, it's highly unlikely that senior citizens will have much use for pregnancy and pediatric services.

Pre-existing conditions covered under the Affordable Care Act

The Affordable Care Act forbids qualified health plans from denying you coverage due to a pre-existing condition. You also can't be charged more due to your pre-existing condition but can for smoking.

The lone exception to the pre-existing coverage rule was a grandfathered individual insurance policy. A grandfathered individual insurance policy is one that was purchased for you or your family prior to March 23, 2010.

Options as you approach Medicare age

But what if an ACA plan isn't a good fit for you? Maybe you missed the open enrollment period, or you’ve evaluated the ACA plans and aren’t satisfied, or there are a number of reasons you don't want to purchase a plan on the Marketplace. So what now?

Always know that you have options available.

Short-term health insurance

Short-term health insurance plans cover you in the event of an unexpected accident or an illness. Most plans offer broad provider networks or allow you to see any doctor you wish. They include benefits such as urgent care, emergency room visits, hospitalizations, labs and x-rays. However, insurance companies can deny coverage to people with pre-existing conditions.

When applying for a short-term health plan, health insurance companies can ask you medical questions to make sure you're the right candidate for this type of insurance. Insurance companies might ask whether or not you've been denied insurance in the past due to a health condition, or if a doctor has advised you to have medical tests, but you haven't done them yet. You could also be asked if you have had specific medical issues in the past, such as cancer or hepatitis.

The questions vary from company to company, but you can expect to answer a handful of questions before you can proceed with your application.

Retiree health insurance

Some employers offer retiree health insurance as a benefit. In this scenario, you're still listed as an active employee who's receiving health coverage under the company’s current policy, even though you're retired. You're typically covered for a set time period, or until you qualify for Medicare. Though not as common as it used to be, some companies still offer this perk. Consult your employer’s HR department to see if this is an option.

Coverage under COBRA

If your employer doesn’t offer retiree health insurance, you might turn to the Consolidated Omnibus Budget Reconciliation Act, more commonly known as COBRA. This law allows you to extend your active employee health care plan for a set amount of time, usually up to 18 months.

Most businesses pick up a large portion of the coverage cost for their current employees. But once an employee retires, the cost of the plan reverts to the former employee. This means that you may be required to pay the full cost of the plan, along with a 2% administrative fee. COBRA is typically offered by companies with 20 or more employees in both the private and public sectors.

Coverage through your spouse

The answer to obtaining health coverage might be right under your nose — or at least living in the same house with you. If your spouse is still working, check into the possibility of joining his or her insurance plan. It’s probably your easiest and most cost-effective option. Even if you both retire at the same time, your spouse’s employer might offer retiree medical coverage. You could be eligible for coverage through that plan as well.

Purchase private insurance

Private insurance carriers, so you can search online for one near you. You can possibly buy a plan that suits your specific health and medical needs without breaking the bank or committing to a longer timeframe than you need.

And look into professional organizations: Did you belong to any related to your career? Those organizations might offer financially reasonable plans as well.

The Affordable Care Act marketplace

One goal of the ACA was to make health insurance available to anyone who needed it regardless of financial standing, age, or health status — including pre-existing conditions. Plan types and costs in the marketplace will vary as different people need varying degrees of coverage. Tax credits are available to defray the cost for those folks who qualify.

Direct primary care/concierge medicine

Direct primary care or concierge medicine is an outside-of-the-box way to get health coverage without purchasing health insurance. Here’s how it works:

Rather than charging by the office visit or procedure/treatment, direct primary care practices charge a monthly fee for broad access to primary care services on demand. The amount of the monthly fee varies depending on your desired scope of services, but more services typically come at a higher cost.

Direct primary care allows doctors to offer specific medical services to their patients that an insurance company might not allow. Some of those include same-day visits, around-the-clock access, minimal wait times, and even house calls. But there are some drawbacks with concierge medicine and direct primary care.

• The monthly fees paid to concierge doctors are the financial backbone of the practice. Some doctors could be tempted to limit the care they provide, though this isn't generally the case.
• Patients requiring a higher level of services, which go beyond the menu covered by the practice's monthly fee, can pay higher out-of-pocket costs. This is especially true for people with pre-existing conditions.
• Direct primary care allows doctors to spend more time with each patient, which is a good thing. But this also means less available appointments and a smaller patient list, making it difficult to find a direct primary care provider who is accepting new patients.
• Most importantly, this is not insurance, and does not include coverage for hospital care.

As a final thought: Though you have a pre-existing health condition, know that you have choices as an early retiree. Call (866) 664-0504 to speak to a licensed insurance agent, or get a complimentary consultation today.