The Impact of Relocation on Individual Health Insurance
Individual insurance can have many disadvantages depending on the circumstance, such as moving or relocating to a different area. Health insurance is regulated by each state, so health insurance that is purchased in one state will need to be replaced if an individual moves to a different state. This same disadvantage also applies to individuals who are paying for COBRA coverage. As a result individuals should know the rules that apply for the state where they are relocating.
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Portability
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Unlike a group health insurance policy coverage for individuals, health insurance is not portable when relocating to a different state. The federal law known as the Health Insurance Portability and Accountability Act (HIPAA) provides protections for group health insurance policies when relocating and starting a new job. However, the federal law does not apply to individual health insurance policies. As a result, an individual is bound by the protections a particular state has, if any, for health insurance policies.
Regulations
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Individual health insurance plans are subject to the state in which the health insurance policy was purchased. This is because there are various state laws that regulate health insurers and the policies that are provided to residents. State laws for health insurance coverage differ and as a result health insurers develop different criteria for policies that are sold in a particular state. This means protections provided in one state may not exist in another.
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Pre-Existing Conditions
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A pre-existing condition is treated differently depending on the state in which an individual decides to relocate. A state can have laws that limit the length of a pre-existing exclusion or prevent it from being applied to a policy. The health insurance laws in Maryland prevent a health maintenance organization, or HMO, from imposing a pre-existing exclusion on a health insurance policy. Unfortunately, not all states have this type of law available for residents.
Short-Term Insurance
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A short-term health insurance policy may be needed when relocating to a new state. This is a type of health insurance policy that can provide protection for up to 12 months. A policy may be needed because an individual health insurance policy may not be available for purchase until a residency requirement has been met. Residency requirements can vary in length, such as 90 days or the length of time it takes to get a new driver's license.
Retirement
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Many individuals that are retired tend to relocate to states that have a warmer climate the whole year. As a result, these people will need to look for health insurance coverage that is available. If an individual is old enough, Medicare or a Medicare supplemental health insurance plan might be an option for health insurance coverage. An individual health insurance policy may also be able to be purchased by shopping around to see what the cost is for coverage.
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