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Health insurance for diabetics

by Tony Novak, CPA, MBA, MT, revised 11/21/2011, content partly outdated

Diabetics are often challenged with the duel problem of having high out-of-pocket medical cost and at the same time being denied eligibility to most health insurance plans that could otherwise help with the costs. To make the problem even worse, the complications of diabetes make it less likely that a patient would be employed on a full-time basis and eligible for group insurance benefits.  There are three ways that a diabetic can obtain health insurance. All three of these are through "guaranteed issue" plans which means that eligibility can not be denied because of health history. The three choices are: 1) employer-provided group health insurance (cannot be denied because of diabetes bit you must be employed full time with an employer who provides this benefit), 2) state high risk pools (these are usually very expensive), or 3) use individual health insurance plans that accept diabetics (these are few and offer limited coverage). This article lists a few of these possibilities.

First, it makes sense to separate the health insurance for a diabetic from the rest of the non-diabetic family members. The other family members will be able to find much better coverage at a lower cost. There is no need to subject other family members to more expensive insurance with limited benefits when better coverage is available.

Most health insurance for diabetics today is issued through state-controlled assigned risk pools. While it is comforting to have these plans available, most people have trouble paying for these expensive insurance plans. These plans are best found "offline", although an easy place to look for information is the state insurance department or the state Blue Cross Association at Freedom Benefits.

In most states (excluding Maryland, Maine, New Jersey, New York, Massachusetts and Vermont ) non-insulin dependent diabetics can get coverage through a short term medical insurance policy. This is a month-to-month coverage for up to six month policy. Subsequent six month policies are allowed in most states to stretch coverage for longer periods of time. This is a true comprehensive short term major medical policy offering full coverage up to $1 million for the usual ordinary and necessary medical expenses at any doctor or hospital in the U.S. Like all short term medical policies, this insurance excludes coverage for pre-existing medical conditions including diabetes. The purpose of this insurance is to cover other expenses that may arise until alternate health coverage is available. In most cases, this plan is the likely choice, when available, for a diabetic who needs a immediate coverage because insurance can be issued immediately online.

Diabetics who live in AK, AL, AZ, DC, DE, GA, HI, IA, IL, IN, KY, MI, MO, MS, MT, ND, NE, OK, PA, RI, or SC have a new type of plan called Core Health Insurance that pays for some basic out-of-pocket costs but is not designed to be a comprehensive coverage. Expenses for diabetes or any other pre-existing medical condition are not covered for the first 12 months of the policy. One of the primary benefits of this policy is that cash benefits are paid to the policyholder in addition to and regardless of other health plan benefits available. This policy is often combined with other medical insurance. Because this policy has no deductible of co-payments, it is useful for covering expenses out-of-pocket costs left by other health insurance policies. More information can be found at www.basichealthinsurance.net.

Finally, diabetics should take extra care to ensure that their assets are protected from medical claims. In the worse case scenario, a diabetic will be eligible for coverage under Medicaid, but obviously the intention of financial planning would be to find a better alternative. This might mean paying for the services of an accountant who has experience in this field but this effort is definitely worth the price.

Status: outdated

Current information on the health insurance plans open to diabetics is available at FreedomBenefits.net.

This article is available for republication in its entirety without charge after obtaining the express written permission of the author.

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