Options for High-Risk Insurance Customers
Many states offer risk pools or plans to customers who are considered a high risk by insurance companies. Because of pre-existing medical conditions or other factors, these individuals have been denied insurance, face prohibitive coverage restrictions or cannot afford the high insurance premiums.
State-created risk pools are funded by a combination of tax dollars and pooling high-risk customers to achieve a better group rate. Many risk pools offer several plan options, including indemnity (fee-for-service), Preferred Provider Organizations or Health Maintenance Organizations, as well as deductible and location alternatives.
Eligible customers must apply in their state of residence and show either proof of denied insurance or that their insurance payments are higher than the risk-pool premium. Most states ban customers who are eligible for a state or federal assistance program such Medicare, but some offer special high-risk plans for Medicare-eligible individuals.
Risk pools do have some limitations. Some states restrict certain medical conditions and diseases. Some also cap the number of customers in the risk pool, forcing newcomers to join a waiting list.
The main disadvantage to risk-pool plans is cost – in some cases, they can cost twice as much as typical individual health insurance plans. As a result, they are usually a last resort. But for someone with a costly medical condition, they are definitely preferable to having no insurance at all.
Options for high-risk insurance customers
Tips for getting the most from your insurance
Types of health insurance plans
What to look for in a health insurance plan
Why get health insurance?
