Health Insurance After Cobra & Pre-Existing Conditions

COBRA is a continuation of a previous employer's health insurance coverage at a cost to you, the previous employee. If you choose to continue health insurance under COBRA, you will not risk losing coverage for your pre-existing conditions and will continue to enjoy the protections available from the Health Insurance Portability and Accountability Act, or HIPAA. However, federal law only allows you to continue coverage under COBRA for a maximum of up to 18 months so long as you lost your job involuntarily or experienced a reduction in work hours. Other qualifying events, such as loss of child dependency status, may qualify you for up to 36 months of COBRA protection. Once COBRA ends, you must either move to a new group health insurance plan or else purchase your own health insurance policy to maintain health coverage for your medical conditions.

Private Health Insurance

• If you move from a previous employer's insurance under COBRA to a new employer's insurance, HIPAA requires your new insurer to provide immediate coverage for your pre-existing conditions without a waiting period so long as you were covered within the 63 days prior to enrolling in your new employer health insurance plan. If, however, you do not have access to an employer's group insurance plan and instead must individually purchase a private health insurance policy, your new insurer may or may not exclude your pre-existing conditions from coverage. In fact, private insurers may deny your application for insurance altogether in some instances.

PCIP Coverage

• The Affordable Care Act established a federal high-risk insurance pool that extends health insurance options to Americans who cannot find coverage on their own. Known as the pre-existing condition insurance pool, or PCIP, those accepted for PCIP insurance will face no waiting periods before coverage can begin and will receive comprehensive health insurance coverage that includes specialty care, hospital care, primary care, prescription drug coverage and numerous other benefits with a maximum annual out-of-pocket cost of $5,950 after deductible. There are no pre-existing condition exclusions and absolutely no lifetime limits on coverage. Some states also offer their own PCIPs for residents, though coverage and qualifications may vary for these smaller health insurance pools.

PCIP Qualifications

• To qualify for the federal PCIP, you must have an existing medical condition and have proof of a denial of health insurance due to your pre-existing medical condition. Furthermore, you must be uninsured for a minimum of six months prior to applying for coverage under the PCIP. If you meet these conditions and are a legal resident of the U.S., you will likely qualify for insurance. Although you will be responsible for paying 100 percent of your health insurance premiums, rates inside the PCIP do not discriminate based on health but instead correlate to your age and the extent of insurance coverage you prefer.

Evolving Laws

• Though Congress passed the Affordable Care Act in 2010, Americans will not experience the full effect of the law until January 2014. At that time, the federal and state PCIPs will close, and all insurers will accept applicants with the same conditions as the PCIPs do currently. The law will ban discrimination based on pre-existing conditions, and insurance plans will no longer impose lengthy waiting periods or exclusions of benefits.