Individual plans are offered by third-party payers directly to individuals. About fifteen million Americans have individual plans; approximately ten million of them have individual plans with commercial companies, four million with Blue Cross/Blue Shield, and one million with HMOs. Individual plans offer four basic kinds of policies: major medical policies, hospital-surgical policies, hospital indemnity policies, and dread disease policies. The best coverage is under major medical policies: they typically pay for hospital care, physicians’ fees, laboratory tests, drugs, ambulance services, and skilled nursing facilities. Hospital-surgical policies pay for hospital and surgical services only. Hospital indemnity policies pay a fixed amount only while a person is hospitalized. Since a typical amount paid is $75 a day, and since the average hospital charge per day is ten times higher, hospital indemnity policies are regarded as a rip-off. Dread disease policies will generally not provide coverage for people who already have the dread disease. Individual plans have different requirements for eligibility, cover different services, and reimburse at different rates than group plans. Generally, an insurer will cover some percentage of your medical costs if you continue to meet certain conditions: if you pay your premiums; if you have not reached some (usually extremely high) upper limit or cap on expenses; if you ask the company to pay for only those items they contracted to pay for; and if you do not seem to pose to them an unacceptably high risk. For commercial insurance companies and Blue Cross/Blue Shield, risks are classified as (1) standard, for which the insurer will supply standard coverage at the usual rates; (2) substandard, for which the insurer will supply coverage at increased rates or will exclude coverage for some medical condition; and (3) denied, for which the insurer will supply no coverage. For HMOs, risks are either acceptable or unacceptable: that is, HMOs will either accept you at the usual rate or they will deny your application. For insurers, virtually all people with AIDS, cancer, coronary artery disease, and diabetes pose unacceptably high risks. To assess the risk you pose, all private, third-party payers (that is, all private insurers) use similar mechanisms. You must fill out an application, which includes a health questionnaire. Nearly all health questionnaires include questions about HIV infection: for example, Have you ever had AIDS, ARC, or tested positive for HIV infection? Other questions may ask whether you have or ever had symptoms of HIV infection. Still other questions may be about drug abuse, age, and occupation: these questions are triggers for the insurer to scrutinize the application further. Questions about sexual orientation are also triggers, despite the fact that such questions violate the guidelines of the National Association of Insurance Commissioners. When you apply for an individual plan, the insurer will request your medical records. Everyone applying for individual insurance must authorize the insurer to request medical records. The insurer might also request a statement, called an Attending Physician Statement, from your physician. Your medical records must be complete, including HIV status. Withholding or falsifying any information on a medical record is grounds for the insurer to deny payment and cancel the policy. Most insurers also require the applicant to take a medical examination. Whether an insurer can require you to take an HIV antibody test is still a matter of legal argument. Some insurers require HIV antibody tests for all applicants for individual plans; most will require the tests if the answers on your health questionnaire merit the test. California and Washington, D.C., have banned HIV antibody testing but allow insurers to use CD4 counts instead. What insurers want to rule out with all these questions and tests and checks is what they call a preexisting condition. A preexisting condition is defined by the National Association of Insurance Commissioners as “the existence of symptoms which would cause an ordinarily prudent person to seek diagnosis, care, or treatment,” or as “a condition for which medical advice or treatment was recommended by a physician or received from a physician within a five-year period preceding the effective date of coverage.” In short, a preexisting condition is a medical condition for which you have received advice or treatment (assuming you are an ordinarily prudent person) from a physician within the last five years. Some insurers will accept an applicant with certain preexisting conditions as a substandard risk; others will deny the application for the same condition. To be certain the applicant does not have a preexisting condition that has escaped everyone’s notice, insurers usually enforce a waiting period—usually a matter of months—between the time of application and the time coverage begins. If, during the waiting period, the applicant shows no evidence of a preexisting condition, the company will accept the application and will pay eligible medical benefits. If you develop AIDS well after you enrolled in an individual plan with the insurer, by law that company is not permitted to drop you. The bottom line: An asymptomatic person with a positive HIV blood test does not fit the definition of having a preexisting condition. Insurers nevertheless will often deny the applications for individual plans from people with HIV infection. Some of these denials are being contested in court. Note that the preexisting condition rule affects people who apply for individual plans with a new insurer. For this reason, people with HIV infection who have a long-time plan with an insurer are often advised to stay with that insurer. You can find out the details of individual plans by reading your policy or by talking to your insurance agent.*205\191\2*
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