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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

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More pre-existing condition issues

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If you notice an error or are in doubt, please send a new question by email or ask for an update. Email

Q: I'm trying to get health insurance with a pre-existing condition, I'm currently disabled with RA arthritis and no insurance co. will accept me. I get a social security check each month and will be covered with basic care. The benefits are not much and I want to have more coverage for myself. Is there anyway you can help me locate a company that will accept my pre-existing condition? or is there no hope for people like me?

A: Well, there is good news and bad news. The good news is that every American can now be enrolled in a health plan that covers pre-existing medical conditions since the implementation of federal legislation known as HIPAA several years ago. There is at least one state-designated insurance plan that will accept you and cover the pre-existing medical condition. (This information is available on your state's Insurance Department Web site). If you do not have the income or assets to buy coverage, then the state will cover you under Medicaid - perhaps this is the basic coverage you mentioned. Other good news is that if you cannot manage the cost of this insurance or choose to be uninsured, then basic medical care will be provided to you anyway. The bad news is that the insurance plan that will cover you is more expensive than other coverage - perhaps up to $1000 per month - and may require a waiting period (for example, 6 months of coverage before pre-existing conditions are covered). In addition, the medical providers and the state have the right to recover the cost of treatment from your assets or attach part of your income to recover payment if the cost of your treatment exceeds the benefits available through insurance. Since you are not covered by Medicaid now, this probably means that you have some assets or other income that put you over the poverty level for your local community. This means that your financial planning for the future should focus on how to retain some of those assets and not lose everything due to the cost of future medical treatment. This is more important to your overall financial well-being than the insurance between now and May 1. Even with the basic care plan, as you mentioned, significant uncovered medical risks remain a problem. The unavoidable truth is that those individuals without the ability to pay for full coverage will receive something less than the best our medical system has to offer. The basis care you mentioned is an example of this. Obviously, if you can afford HIPAA coverage until you become eligible for Medicare, this is the best route. If not, then it makes sense to arrange your finances to make sure that you do not lose your remaining assets due to the cost of uncovered medical care in the future. This financial strategy used to be called "Medicaid planning" but it is no longer considered ethical or legal for financial advisers to offer help with this strategy. However, if you say, for example, that you want "Medicaid-qualified" retirement account, a well-qualified financial adviser should know how to help set this up.


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