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Uninsured with preexisting conditions may not buy health insurance

Many consumers who have been priced out of the U.S. health insurance system or denied coverage due to a preexisting condition will be able to get affordable coverage for the first time starting in 2014. But a new survey shows many of these consumers aren’t lining up to buy health insurance.

The survey of about 3,000 U.S. adults, conducted in July by Princeton Survey Research Associates International on behalf of insuranceQuotes.com, shows that 68 percent of uninsured consumers with a preexisting condition aren’t sure if they’ll buy insurance when the health insurance exchanges (marketplaces created by the federal healthcare reform law) open this fall.

It’s not surprising that many of the people surveyed said they still don’t know what they plan to do or how the Affordable Care Act will affect them, says John Rother, president and CEO of the nonprofit advocacy group, National Coalition on Health Care.

preexisting condition insuranceConsumers likely will be forced to get more informed in the coming months, he says, especially when the health exchanges start selling insurance in each state this fall.

“People tend to get a lot more focused when they have to make a decision,” Rother says.

Will consumers with preexisting conditions buy health insurance?

Starting in October, Americans with preexisting conditions will for the first time be able to buy health insurance without paying extra, experts say. A preexisting condition is a medical condition or illness that existed before a consumer began shopping for health insurance.

“You won’t be turned down because of cancer or any illness,” says Sally McCarty, a healthcare reform expert with the Center on Health Insurance Reforms at the Georgetown University Health Policy Institute.

And, you won’t pay more because of your condition, she says. Consumers who buy insurance on the individual market will be pooled by state, much like employees in a group plan. Pooling by state creates a large group, so the high medical bills of one sick person will have much less of an effect on the premiums paid by all group members, she says.

According to the survey, 37 percent of people surveyed have a preexisting condition. Right now, people with preexisting conditions can get coverage through group plans offered by employers but often get denied – or charged exorbitant premiums – when they try to buy insurance on the individual market, McCarty says.

Each insurance company typically handles preexisting conditions differently, but conditions can include anything from acne to high blood pressure to cancer. And McCarty even saw bunions on a list of preexisting conditions for one insurer, she says.

Currently, the inability to get individual insurance due to a preexisting condition forces many consumers to stay uninsured, McCarty says. About 16 percent of the consumers surveyed said they don’t have health insurance of any kind, including insurance through work, a policy purchased on the open market, or coverage through a public program such as Medicaid or Medicare.

But many of these uninsured consumers aren’t clamoring to get health insurance yet: Nearly 70 percent of uninsured consumers with a preexisting condition and 57 percent of uninsured consumers without any health issues, said they aren’t sure if they’ll buy health insurance.

Only 12 percent of uninsured consumers with a preexisting condition said they will buy insurance before the end of this year, while six percent said they will get coverage after the start of 2014.

Experts say it’s likely many of these consumers simply feel they don’t yet have enough information and will get informed and likely buy insurance in the coming months.

“They will have a lot of choices to make,” Rother says.

Many consumers still confused about Obamacare

Most consumers surveyed admit that they aren’t sure how Obamacare will affect their health or their wallets.

In fact, 85 percent of people surveyed said they don’t believe Americans have gotten enough education about the health care reform law to know what it means for their own healthcare.

One thing consumers should know about how reform will affect their health: When they buy health insurance through exchanges, it will cover 10 “essential health benefits” including emergency services, hospitalization, maternity care, mental health services and prescription drugs,  says Christine Barber, a senior policy analyst for the nonprofit Community Catalyst, which offers support to community health organizations. That’s not always the case now, she says, since many individual plans exclude coverage for maternity care or prescription drugs. “(People) will be able to get health insurance that actually covers things,” she says.

Consumers also are unsure about how much Obamacare will cost. Sixty-nine percent of those surveyed said they don’t have enough information about Obamacare to know how it will affect their personal finances.

Experts say that’s partly due to lack of specific costs available now and should change as the exchanges open, allowing consumers to shop and compare the costs of plans.

But the survey also showed consumers just don’t have all the facts about Obamacare in general. About 60 percent of people surveyed either think the exchanges will offer more than just health insurance or aren’t sure.

McCarty says that before the exchanges open, the federal government, many state governments and community organizations will mount big publicity pushes with TV commercials, billboard and ads, to educate consumers.

She says: “I just don’t think the big push to get the word out has started yet.”

Kicking off the publicity campaigns closer to when the exchanges open will help ensure that the information is fresh in consumers’ minds when it’s time to start shopping for insurance.

“You want to start early but not too early,” McCarty says.

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How healthcare reform will affect you and your finances

Consumers can get a glimpse of how health care reform will affect them and their personal finances now. Here’s how:

1. See if you qualify for a health subsidy.

Consumers with household income up to 400 percent of the federal poverty level could qualify for premium subsidies. Tax credits will be offered on a sliding scale, so consumers with an income equal to the federal poverty level would pay no more than two percent of their income in premiums, while those who make 400 percent of the federal poverty level would pay a maximum of 9.5 percent of their income in premiums.

2. Find out how much health plans cost.

Most states have not released sample pricing yet for their exchanges. But you can take a look at pricing in states that have released numbers, such as Vermont. In the Vermont exchanges, a platinum-level plan with no subsidy would range from $610 a month for a single person to $1,710 for a family with kids. And a bronze-level plan would cost $365 to $1,028 a month.

3. Review your previous medical bills.

While past medical bills are definitely no guarantee of how much you’ll spend in the future, they can serve as a rough guideline, Rother says. Your estimated medical costs will be one factor in deciding which of four levels of plans you might want to choose. The platinum plan  has the highest premiums but pays more medical costs.Bronze has the lowest premiums, but pays a lower percentage of your medical bills.

4. Educate yourself.

Basic information about healthcare reform, specific features of the law, and how they affect you can be found at HealthCare.gov. “It’s really a good starting point,” McCarty says.

5. Don’t worry.

Consumers shouldn’t get anxious because they don’t have all the facts yet, Rother says. They will get more details on October 1, 2013 when the exchanges open.

“At that point, it will be much easier to both understand what the choices are and to gauge the cost,” he says.

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