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"Health Insurance from Aetna"

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By all appearances, Jamie Peet is an insurer's dream demographic. She's young. She wants health coverage. And she's healthy.

Well, she thought she was healthy. Aetna didn't agree. After the 22-year-old Middletown resident was laid off from her job in December, she applied for an individual health insurance plan through Aetna, her employer's small group health plan insurer. A company rep told her she should have no problem getting a plan since she had been an Aetna customer.

What happened? Aetna looked into her previous health history, and rejected her application, citing "pre-existing conditions," she said.

Surprising for Peet, since, as far as she knew, she was fine. "In the best health of my life," she said. "What I don't understand is since nothing had changed in my health history from when I was accepted before, how could they just decide not to cover me."

The simple answer is that individual health insurance is not treated the same as group health insurance under the federal Health Insurance Portability and Accountability Act known as HIPAA.

But that answer is the only simple one as more unemployed U.S. workers are learning in their attempt to secure or keep health coverage in the individual market. Last year an estimated 18 million Americans bought health insurance through the individual market, up from 17 million in 2005, according to the National Conference of State Legislatures.

Studies suggest that some insurers reject at least 10 percent of applicants for individual coverage because of pre-existing medical conditions. Under HIPAA, employers cannot exclude you or family from a group health plan because of a pre-existing condition. They must offer you coverage and pay the same percentage of your premium as they do for healthy employees.

But what Aetna didn't tell Peet - until apparently it was too late - is that she could have continued her coverage under options that allow workers to convert a group health policy into an individual one - regardless of pre-existing conditions. Never heard of a conversion plan? It's not surprising since insurers are not required to notify policy holders about the option. Also, not all employer group health plans are required to offer conversion plan policies under the Pennsylvania Conversion Rights law. The Philadelphia region's two major insurers - Aetna and Independence Blue Cross - offer them.

If you don't qualify for a conversion plan under Pennsylvania law, a second option is available under HIPPA called the conversion/alternative mechanism policy. In Pennsylvania, Blue Cross Blue Shield is the lone insurer that provides these plans and it currently has 1,373 members enrolled.

While conversion plans prevent private insurers from denying coverage or imposing exclusions for pre-existing medical conditions on individual plans, there is a tradeoff: These policies are usually more expensive and they don't provide as comprehensive coverage as the individual plans, insurance experts say.

As for Peet's rejection-worthy medical conditions, she says she was told there were two: acne and temporomandibular joint disorder (TMJ), which causes tenderness and pain on the joint where your jawbone meets your skull. Yes, she was treated for acne in high school, but Peet says she never heard of TMJ before she got the rejection notice.

She did see a doctor for jaw pain last October. He wrote her a prescription for extra-strength ibuprofen and recommended she see a dentist, she said. After two weeks, the pain disappeared and she hasn't had a problem since, she said. -- Other than she couldn't buy health insurance.

Area insurance spokespeople say various factors are considered when evaluating an individual's insurability. They include the severity of an illness, whether the condition or medical history is temporary or chronic, the treatment prescribed or recommended, the presence of complications risk and the overall experience of others with the same or similar medical conditions or history.

In Aetna's case, "severe" acne is a medical condition that is factored into the underwriting process, which determines if individual coverage will be offered.

"This includes cases where an individual is receiving treatment for scarring or is using more than three prescription medications," Aetna spokesman Walt Cherniak said. "In these cases, individuals may also need treatments such as chemical peels, derma-abrasion, saline injections, antibiotics, or steroids."

Aetna also includes prescription drugs in its underwriting process, Cherniak said, so with acne diagnosis the insurer also factors in the use of Accutane within the previous six months.

"Accutane has serious side effects: It can lead to high triglyceride levels and liver damage," Cherniak said. "The use of Accutane always requires close medical management and ongoing monitoring."

Peet says she took Accutane for five months ending in February; she last saw her dermatologist in March since part of the drug's protocol is seeing the dermatologist one month after completing treatment.

She appealed the rejection, but Aetna upheld it. Peet has filed a complaint with the Pennsylvania Insurance Commission, which is pending.

Then recently, Peet said she received paperwork from Aetna offering her a conversion plan. But the letter stated that her application had to be sent no later than 31 days after termination of her group coverage, which is the deadline under the state conversion rights law.

The Aetna letter was dated April 30. She lost her group coverage Dec. 31. Not that she could have afforded the conversion plan premiums, which she said were double the price she was quoted for Aetna's individual plan.

Finally, after going uninsured for a month, Peet found health coverage that started Feb. 1. The high-deductible plan she has costs $180 a month - $30 more than the Aetna individual plan would have cost. Also the copays are a lot higher than Aetna's plan. "I do know a lot of people my age don't think they need insurance, but I'd rather have it in case of something catastrophic," she said. "I feel bad for those who have more problems applying for medical insurance. I can't imagine."

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