Several blogs have highlighted UnitedHealth Group’s new ‘Continuity’ insurance plan, a “first of its kind” product that gives consumers “the right to buy an individual health policy at some point in the future even if you become sick.” As Stand Up For Health Care explains:
To be clear, the product is not health insurance. It’s more like a bribe. You’d be paying the insurance company now — 20 percent of the annual premium, at that — just for the right to purchase their policy later, if you lost your job or retired early, for example.
Sound like a great deal? Well, no. But it’s actually even worse than it sounds at first. If you’re sick and need to be sure you have coverage, you probably can’t buy this plan. And if you’re healthy enough to buy it, but get sick later, you may not be able to afford it when you need it.
Not only does the plan — open only to the healthiest Americans — not guarantee affordable coverage in the future, it exploits the country’s anxiety over access to affordable health care to convince consumers to buy a completely unnecessary product. Smart marketing for the company, but a bad investment for anyone looking to guarantee access to affordable coverage in the future.
In fact, under current COBRA and HIPAA laws, most individuals with “credible coverage” are protected from instantly losing health insurance coverage when they change or lose their jobs, regardless of preexisting conditions. COBRA allows individuals previously employed by a firm with 20 or more full-time employees on the payroll to receive health care benefits for 18 to 36 months, provided they pay the full cost of the premium and administrative fees.
Similarly, HIPAA guarantees that individuals can purchase coverage in the individual market if they have had “creditable coverage” in the group market. For consumers in the individual market, HIPAA requires guaranteed renewability of coverage in most situations. “This means that an insurance issuer must renew an individual’s policy regardless of the individual’s health status unless the individual no longer wants it.”
There is some uncertainty in the current system and UnitedHealth Group is trying confuse consumers by offering protections that are already available. But as the NYT points out, ‘Continuity’ may become even more obsolete if Congress adopts comprehensive health care reform. “As an individual, you’re betting against health reform.”