Top Ten Obsolete Obamacare Insurance Terms

Let’s take a journey through the pre-Obamacare individual health insurance application process for a list of the top ten obsolete health insurance terms.  Each of these terms are passé with the launch of the individual health insurance exchanges.

If you currently purchase insurance on the individual market, you may have forgotten how scary, invasive, confusing, and time consuming the initial application process was. This should bring back some not-so-fond memories.

If you are covered by employer group health insurance, you might never have taken this journey.  If you hear people who are excited about the launch of Obamacare, also known as the Affordable Care Act ( ACA), here are some reasons why.

Let’s look at the plight of a 40-ish family breadwinner who wanted to Escape from Cubicle Nation

America is the land of freedom and opportunity, and you had a great idea for a new business.  You were afraid to leave your current job due to…

1. Job Lock  The inability to freely leave your job because doing so will result in the loss of health insurance benefits.

You decided to go for it, and quit your job.  You find out that the individual insurance market, unlike the group health insurance at your old job, is subject to…

2. Medical underwriting  Using your health information to decide if the insurance company will deny coverage or charge a different premium.

As an employee, health insurance was a job benefit. In the individual market, you were required to disclose each…

3. Pre-existing condition The classic chicken-and-egg situation.  Defined as “medical condition that occurred before a program of health benefits went into effect.”

All pre-existing conditions must be disclosed on the…

4. Health History Statement The first question is “Has any insurance company within the past five years declined, postponed, refused, restricted, or increased the premium for health reasons for life or health insurance coverage for anyone listed on this application?”  You were required to grant permission to insurance companies to keep a history of your personal medical information in the MIB database, in case you applied for coverage in the future.

If you answered yes to the first question or any of the 48 specific conditions you could be…

5. Denied coverage The four largest U.S. for-profit health insurers on average denied policies to one out of every seven applicants based on their prior medical history, according to a congressional investigation released in 2010.

If you inadvertently withheld information on the health history statement, you might be subject to…

6. Recission Insurance companies had the ability to rescind, or “undo” policies.  “In health insurance and specifically the individual and small group insurance markets, rescissions have generally followed the diagnosis of an expensive-to-treat illness in the patient (policyholder), typically because of withheld information about a pre-existing medical condition.”

If you were laid off from your job, you were eligible for…

7. COBRA continuation coverage You could purchase your employer group policy at up to 102% of the full cost.  For some, this was unaffordable.

If you could afford to pay for COBRA coverage until you exhausted the benefit period, you might have been eligible for a…

8. Portability Policy  Eligibility was determined by each state. In Oregon, if the employer group insurance company didn’t sell individual policies, then they didn’t have to offer a portability policy.

If you were ineligible for a portability policy, you could get insurance through the…

9. High-risk pool Come on in, the water is fine.  The premiums were high and the benefits were low.

If you were unable to get insurance and you or a family member became seriously ill, you went deep into debt and had to file…

10. Medical Bankruptcy  Medical debt has been found by a 2009 study to be the primary cause of personal bankruptcy.

We’ve reached our destination.  In a future post, I’ll describe the current landscape.