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QUESTION 1: What is individual health insurance?
ANSWER: Individual health insurance is coverage that a person buys independently. It can be sold to a single individual, to a parent and dependent children, or to a family. Nationally, the majority of Americans get their health insurance coverage through an employer or through a government program, but a growing percentage of the population purchases private health coverage on an individual basis. In New Hampshire, the Department of Insurance regulates how individual policies may be marketed and sold within the state.
QUESTION 2: How do I buy individual health insurance coverage?
ANSWER: In New Hampshire, individual health insurance coverage can be purchased through licensed health insurance salespeople known as agents or brokers. These agents and brokers are trained in and understand the various insurance plans they represent, and they can help you find the coverage that best suits your individual needs. (To obtain a quote for health insurance from a New Hampshire-licensed health insurance agent, submit a E-ZQuote.)
QUESTION 3: Is individual insurance different from group insurance?
ANSWER: Individual health insurance is very different than group health insurance, which is the type of insurance that is typically offered through a (large) employer. In New Hampshire, the laws mandating what types of services must be included in individual policies are different than those required in group policies. Some benefits that are “standard' in a group policy, like maternity coverage, may not be included in an individual plan. Sometimes individual health insurance consumers will have the option to pay extra for coverage of additional services like maternity coverage through optional insurance “riders.”
For individual health insurance consumers, because they do not have the benefit of an employer subsidizing a portion of their premium, the cost of coverage is often a major consideration. Consequently, the benefits included in individual policies are often simpler than in group plans, while the deductibles (the amount you have to pay before insurance benefits begin) and cost-sharing (the fees you pay directly to medical providers at the time of service) are typically higher than those in a group plan.
QUESTION 4: How are premium rates determined?
ANSWER: In New Hampshire, when you apply for individual health insurance coverage, you are asked to provide health information about yourself and any family members to be covered. When determining rates, insurance companies use the medical information on these applications, as well as information on the applicant’s age and where they reside (determined by postal zip code.) Sometimes the insurance companies will request additional information from an applicant's physician or ask the applicants for clarification.
As a rule, individual health insurance companies are much more limited than group insurance companies in their ability to spread risk. In New Hampshire, a company can decide not to cover people with very serious medical conditions (e.g., HIV or cancer), deeming them “uninsurable.” If the insurance company is unable to obtain information necessary to accurately determine the risk of a particular applicant, it will underwrite more conservatively (i.e. the assumption relative to the missing information will be negative rather than positive.)
QUESTION 5: Are health insurance companies required to issue individual policies to anyone who applies in New Hampshire?
ANSWER: No. Unlike in the neighbors Maine, Massachusetts and Vermont, where health insurance is a “guaranteed issue” item, in New Hampshire individual health insurance is “fully underwritten.” What this means is an insurance company that issues individual coverage underwrites the applications prior to the policy being issued. Underwriting is based on many things including (but not limited to) age, health status, occupation, and certain hobbies. Consequently, in New Hampshire a company may (1) issue the policy as you applied for it; (2) issue the policy with stipulated exclusions either for a limited or unlimited period of time; (3) issue the policy with an added premium; or (4) decline to issue you the policy.
NOTE:By law, if a policy is issued other than as you applied for it, the company must provide you with their reason for offering exclusions or a declination, upon your request.
QUESTION 6: If I am declined for an individual health insurance policy and do not have access to a group plan (i.e. I am self-employed, unemployed or retired), how do I get health insurance coverage for myself and/or my family?
ANSWER: If you’ve been declined for health insurance, the first thing you should do is find out why, and make sure that you were not declined in error. If you determine that you were legally declined coverage, and you are not eligible for Medicare or Medicaid, you have a couple of options:
- Open Enrollment Period for “Groups of One.” New Hampshire law (RSA 420-G:8 I-a.) allows health insurance plans to enroll individuals into certain plans as a “group of one,” on a “guaranteed issue” basis, during the months of March and September each year.
- The New Hampshire Health Plan (NHHP). NHHP is a state high risk pool established to provide health insurance to NH residents who a.) Are declined coverage through the private market, b.) Have a pre-qualifying condition or c.) Are otherwise eligible. The NHHP is intended generally to be the insurer of last resort for New Hampshire residents. Applicants are encouraged to seek coverage from private insurance companies before contacting the NHHP. NHHP also provides health insurance for individuals who are entitled for certain Trade Adjustment Act (TAA) or Pension Benefit Guaranty Corporation (PBGC) benefits. For these individuals, premiums may be payable through the federal health care tax credit program. To determine if you are eligible for the NHHP, go to www.nhhealthplan.org for more information.
- New Hampshire Healthy Kids (NHHK). New Hampshire Healthy Kids Corporation (NHHK) was first established by special legislative act in 1993. Today NHHK provides access to free and low-cost health coverage to uninsured New Hampshire children of families who meet its income guidelines. (The NHHK also provides families at higher income levels with the opportunity to buy in to the program.) NHHK maintains contracts with Anthem BC/BS and Northeast Delta Dental to provide medical and dental insurance to children who qualify for the Title XXI program. These contracts encompass financial discounts negotiated by NHHK with the State’s hospitals and hundreds of health care providers in order to keep the cost of coverage low. To determine if your children are eligible for the NHHK, go to www.nhhealthykids.com for more information.
QUESTION 7: If I am refused a policy or my policy is not issued as I applied for it, how can I find out why?
ANSWER: You must make a written request to the company. The insurance company is required to inform you of the reason(s) for their decision.
QUESTION 8: Can I return my policy if I am not satisfied with it?
ANSWER: When a policy is issued to you, by law you have a "free look" period of no less than ten (10) days to review the policy and confirm that it meets your needs. If you are not satisfied with the policy, you may return it within the 10-day “free look” period and request a full refund of the premium (if any) paid when the application was submitted. To avoid any delay or confusion, if you decide you do not want the policy, you should return the policy directly to the company by certified mail within the "free look" period.
QUESTION 9: Can the insurance company require me to get an approval prior to receiving medical services?
ANSWER: Yes. Often individual medical policies will require pre-certification prior to a scheduled hospital stay or within a short period of time following an emergency admission. There may be other requirements or restrictions in your policy. Be sure you understand the requirements of your policy.
QUESTION 10: What is a “deductible” and how does it work?
ANSWER: A deductible is the amount of covered expenses you must pay before the insurance company will pay for any of the covered medical expenses. Be sure you understand exactly how the deductible works before buying any policy. There are a number of ways deductibles may be administered by the company:
- Some policies will apply the deductible to covered expenses on a per person, per calendar year basis. If the policy is a family policy, there is normally a maximum number of deductibles per family per year, and sometimes a single deductible for a common family accident.
- Some policies will apply the deductible per medical condition or cause. This type of deductible can cause a single individual to pay several separate deductibles in a calendar year. Policies with this type of deductible may not have a maximum number of deductibles to satisfy in a calendar year. These policies normally have a lower premium than those with a calendar year deductible, because the individual’s risk of multiple deductibles (and larger costs) is greater.
- Some policies apply the deductible for each hospital confinement separated by a specified number of days (usually 60 days).
QUESTION 11: How long does an insurance company have to pay my medical claims?
ANSWER: Once the company has received “due proof of loss,” they are allowed a “reasonable” period of time (no more than 30 days) within which to pay or deny a claim. If the claim is not paid within 30 days after they have all needed information, they must pay interest on the claim at the rate of 9% per annum.
QUSTION 12: What does my company mean when it says it will pay "usual and customary charges"?
ANSWER: “Usual and customary” refers to the fee charged by the providers in a given geographical area for a particular service. Insurance companies may subscribe to an independent service which periodically surveys providers in a given area, or they may use their own claims experience to establish usual and customary allowances. Most companies, in turn, pay claims based upon a percentile of the usual and customary fee schedule, and this limit is referred to as "reasonable and customary". For example, if your policy pays at the 70th percentile of usual and customary, that means they pay based upon the fee charged by 70% of the providers for that particular service within the geographical area. Consequently, if your policy includes a “reasonable and customary” provision and the doctor or hospital you use charges in excess of your policy’s “reasonable and customary” fee allowance, you may be required to make up the difference yourself (i.e. “out-of-pocket”), above and beyond any deductibles or co-insurance payments you have already made.
QUESTION 13: My insurance company has notified me that it has “rescinded” my health insurance coverage. What does this mean?
ANSWER: Health insurance policies to have a minimum two (2)-year contestability period during which the company may rescind a policy under certain circumstances. Remember, an insurance policy is issued based on information contained in the application or enrollment form. When an individual fails to completely and accurately disclose health information, including weight and height, on the application, it affects how the policy would have been issued. The company may have issued the policy with an exclusionary rider, issued the policy for a higher premium, or declined coverage altogether had they been provided with correct information.
Insurance companies will generally review the application for accuracy and completeness when they receive the first claim. If they find an error or omission that is material (one that would have changed their offering of coverage to you), the company will take action to rectify the situation. They may issue an exclusionary rider for the health condition in question and ask that you accept it as part of the policy. Or, if the error or omission is significant enough, the company may rescind the policy and return your premiums to you. Rescission means that the policy will be null and void from the beginning.
NOTE: It is extremely important to fill out your application accurately and completely to avoid having your policy rescinded. When you receive your policy, you should check your copy of the application (which will be included in the back of the policy) to be sure that your information was accurately recorded, especially if you did not fill out the application personally.
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