Before you Move Out-of-State

Rules and regulations for obtaining health insurance, and premiums for health insurance vary from state to state. Many people approaching retirement dream of leaving a snowbound northern state for a sunny climate. But before you make your final decision it would behoove you to investigate the following issues relative to health insurance: 1) availability 2) affordability, and 3) lifetime maximum benefits.

The information in this article will be divided into two sections: One, for those of you that are eligible for Medicare benefits, and two, for those of you who are under 65 years of age and retiring early.

Premiums for Medicare supplements are different from state to state and the more senior citizens who are residing in the state, the higher the premium. For example, Florida has one of the highest premium rates in the country for Medicare supplements. Maine and Alaska have some of the lowest rates for Medicare supplements. If you are planning on spending six months in a warmer climate and six months in the Northeast, you will want to compare the premiums for the two states in which you will be residing. You may be able to purchase a Medicare supplement in the State that has the lowest premium. If you have major medical insurance from your former employer, you will want to check and make sure that this insurance will serve your needs when you live out-of –state. Chances are if you have a traditional major medical policy such as New Jersey State Health benefits your coverage will be good no matter where you live. However, if you have a managed care plan that requires you using certain physicians, it will not be good if you are out-of-state. Likewise, if you have chosen an HMO in lieu of Medicare and now want to move to another state, you will probably have to disenroll in your HMO, get reinstated in the traditional Medicare program and then purchase a Medicare supplement in your new state. You want to do all of this with no gap in coverage.

Once you are settled in your new state, if you have had good experiences with your HMO, you might decide that an HMO is more cost effective for you and once you see your new doctors in your new geographic area are part of an HMO plan, you might want to consider switching at that time. It is usually best that you get acquainted with your new neighborhood for a while so you know which doctors are in which HMOs. Keep in mind, the traditional Medicare program with a Medicare supplement (also known as Medigap) does not require any referrals and you can see any doctor anywhere, anytime in any state. For people who are traveling, it is the best choice.

If you are under 65 years of age and retiring to another state, you might wish to call the Insurance Department for that state to find out who is selling individual health insurance. You will want to investigate premium cost and availability of coverage. Will you be able to purchase a traditional indemnity plan or will you only be able to purchase an HMO? Keep in mind that an HMO plan gives you no freedom of choice. You can only see physicians who are in the HMO and you need a referral slip to see any specialist. If you can buy a Point of Service (POS) plan, you still choose a Primary Care Physician and your plan works like an HMO with one exception; you have the right to go out of network and see any doctor, anywhere, at anytime, but you will first need to meet a deductible and then the plan will pay a lower percentage.

Thanks to the health insurance Portability and Accountability Act, any company selling health insurance must sell you a health insurance policy with no waiting period for pre-existing conditions as long as you can prove that you have been continuously insured for the last 12 or 18 months. If you have a gap in coverage of 30 days or more, you will be faced with a waiting period of one year for preexisting conditions. You will also want to find out what the lifetime maximum benefit is on a health insurance plan when you move out of state. We know of one individual who was told the lifetime maximum on a policy is $250,000. This might make for a nice salary but it is totally inadequate in terms of health insurance protection should you become seriously ill.

In summation, when you are considering a change of residency to another state, in addition to determining how many days out of the year the sun shines and what your real estate taxes will be, you will want to list your options for obtaining health insurance, and find out what the lifetime maximum benefits and premiums are for those options. Likewise, if you are on Medicare, you will want to find out what a Medicare supplement will cost you in those state(s).

Irene Card & Betsy Chandler share the responsibilities of running Medical Insurance Claims, Inc. a health insurance services company . If you have questions relative to this column or other related topics, we invite you to call (973) 492-2828, or visit our contact page.