About Guaranteed Issue Health Plans

Preexisting health conditions usually preclude you from obtaining individual health insurance. Other factors, including advanced age or obesity, are also typical obstacles to obtaining a policy. Guaranteed- issue health-insurance policies are issued to anyone who applies for them, regardless of preexisting conditions or risk factors. While they don't offer the same broad coverage as standard health-insurance policies, they can provide some financial relief in the event you become ill or injured.

Typical Insurance

• Group health coverage through an employer is typically prohibited from excluding preexisting conditions. Privately purchased insurance, or employer insurance at small companies, often has the right to exclude coverage for preexisting conditions in individual policyholders. For example, if you purchase health insurance individually, and have diabetes, the insurance company may choose not to cover any medical care for diabetes or conditions that are caused by diabetes. The exclusionary period can range from a few months to as long as the policy is in force.

Considerations

• In some cases, health-insurance companies refuse to issue a policy at all to individuals with preexisting medical issues, or other factors that put them at risk for high claims. Factors that cause insurance companies to refuse a policy issue include: age; vocation; preexisting conditions, such as obesity or high blood pressure; and the number of claims filed on past insurance policies.

Guaranteed Issue

• Guaranteed-issue policies are designed for people who cannot qualify for other health-insurance plans. Guaranteed issue means those who apply for the policies are guaranteed to get one. In most cases, such policies are issued without medical questions or examinations. People who apply for these policies often have medical problems such as cancer, diabetes or heart disease. The policies pay out less than a typical health-insurance policy would pay out. In most cases, they pay a predetermined amount of money for specifically identified events. For example, the policy may promise to pay $35 toward each well-care visit to a physician. The same policy might offer a payment of $100 a day for each day the insured is in a hospital for medical care.

Cost

• The cost of a guaranteed-issue policy is usually higher than a normal health-insurance policy, because of the high risk involved with insuring people who have preexisting medical conditions or risk factors, such as advanced age. The premiums can be paid monthly, quarterly, biannually or annually. Your insurance agent can help you locate a variety of guaranteed-issue policies to choose from.