Health Care Coverage Problems

Health insurance remains a privilege that not every American can afford. Many of those who earn less than $20,000 per year find that they cannot buy adequate health insurance coverage to meet their needs, says the Commonwealth Fund, an agency working toward a high-performance health system. In cases where they do have health insurance, high out-of-pocket expenses can put them in debt.

Significance

• Health insurance is necessary today because of the high cost of medical treatment. One health incident or hospitalization can financially destroy a family and keep it in debt for years.

  The cost of health insurance and buying a new plan when out of work or making some other life transition can be difficult to maintain. Although plans such as the Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA, make it possible to continue an employer's insurance after leaving, that is costly.

Function

• COBRA health insurance is designed to be a temporary solution enabling the individual or family to continue the health insurance they had with a former employer. However, it can be continued only up to 18 months, or 36 months for the surviving spouse of an employee.

Effects

• Health insurance plans such as COBRA enable the same health insurance plan to continue after leaving employment. Instead of the employer paying the premiums, however, the employee may have to pay up to 102 percent of the cost. This can come as a surprise if the employer had previously paid a large portion of the insurance cost. Added to the higher cost, any out-of-pocket expenses and deductibles might make it unaffordable.

Considerations

• This can put the individual and the family in a real dilemma financially. To get good health insurance benefits later, when becoming employed again or when purchasing a personal health plan, there needs to be continuing health insurance. A gap in health coverage might mean that a pre-existing condition is not covered, and the health care costs can suddenly skyrocket. The only way to prevent this is to maintain both policies until the time is up for pre-existing conditions, which could be as long as 18 months depending on the condition.

Prevention/Solution

• The president's new health insurance program seeks to eliminate some of these problems, providing more thorough coverage for all. It also means people cannot be turned down for health care because of a lack of money or insufficient health care coverage. Backers say the new program will also make health care more economical because of more people paying into the system, but it will take a couple of years to implement.

Features

• The new health care program will help limit rising health care costs and should also limit the amount of costs that a typical family needs to pay for coverage, say advocates. Gaps should also be eliminated because people cannot be turned away from health insurance or from health care. Health insurance will have to be purchased by everyone, and low-income families will be able to get financial help from the government to some degree.

Considerations

• People need to be well aware of what they are buying when it comes to health care. If there are conditions that need to be covered, than make sure they are in the policy before you buy. Nothing should be assumed, so be sure to ask questions if you do not understand something in the policy. As the new health insurance program comes into effect in the near future, different companies will probably be offering widely different policies and coverage until this new program comes fully into place. Some companies will also pay better on claims than others, and some are more aggressive than others about not paying claims, so be sure to look into a health insurance company's history, too.