California Health Insurance Guide

California residents may purchase individual health insurance plans or participate in an employer-sponsored plan. Individual insurance policies are subject to strict underwriting guidelines and cost significantly more than group plans. The California Department of Insurance regulates health insurance companies and serves as a valuable resource for residents who have questions about health insurance-related issues.

Types

• California residents have a variety of health insurance plan types to chose from. Although each type is different, they all function to pay for expenses related to the treatment of covered medical conditions. Fee-for-service insurance is referred to as an indemnity policy. With an indemnity policy, insureds have the freedom to choose their own doctor, specialist or hospital. Most policies are subject to a deductible, which is an amount the policyholder must pay before the insurance company provides benefits.

  Health Maintenance and Preferred Provider Organization plans are managed care insurance plans that give participants a network of health care professionals to choose from. Plan participants get a discount for receiving care through doctors and medical facilities affiliated with the network.

Cal-COBRA

• Some California residents lose their insurance coverage because of a change in work benefits, reduction of hours, layoff or termination. The Consolidated Omnibus Budget and Reconciliation Act (COBRA) is a federal law that extends health insurance coverage for individuals who lose their employer-sponsored health insurance benefits. California has a similar program called Cal-COBRA. Cal-COBRA extends benefits of employees who experience a qualifying event for 18 months or longer if special circumstances warrant an extension. The federal law applies to employers with 20 or more employees, whereas the California law applies to employers with between two and 19 employees, giving workers employed by small companies the opportunity to remain insured.

Underwriting

• Health insurance providers set underwriting guidelines as a basis for issuing an insurance policy. Underwriting is a process that reviews an applicant's age, gender and medical history to determine if a policy will be issued and how much the policy will cost. Health insurers in California are required to file policy information with the Department of Insurance regarding the company's underwriting guidelines and procedures. Companies ask potential policyholders questions about their health history and lifestyle choices. Affirmative answers to these questions most likely result in policy denial or higher premiums.

High-Risk Options

• Some individuals are unable to qualify for health insurance because of current or past health conditions. California has insurance programs for these individuals to help reduce the number of uninsured people in the state through the Managed Risk Medical Insurance Board (MRMIB). Programs offered through MRMIB include Access for Infants & Mothers, the Healthy Families Program and the Major Risk Medical Insurance Program. These programs assist California residents with obtaining health insurance if they are unable to qualify for or afford traditional coverage through private insurers. The Major Risk Medical Insurance Program provides coverage to residents turned down for insurance because of a preexisting medical condition.