Health Insurance Articles
3 Common Health Insurance Coverage Riders
2010-07-16
Health insurance coverage prevents financial loss in the event of an illness or injury. Health insurance riders are ancillary products that serve as addendums or codicils to primary insurance policies and modify the elemental coverage. Some common health insurance riders include the long-term care, elimination, and the extended coverage riders. These cost saving measures eliminate redrafting or rewriting the entire policy. Riders can increase the cost of the policy and exclude some coverage because of pre-existing conditions and limitations; however, some riders may permit health-related costs to be covered despite specified limitations.
The long-term care rider is normally used to amend group health insurance policies. They are consequential by providing medical care in the event of the loss of ability to perform the activities of daily living (ADL) due to age, disability, or illness. Unlike Medicare, this rider provides for non-skilled nursing care consistent with in-home, skilled nursing facility, or temporary resident nursing care in an adult day care or similar residence. Usually there is a waiting period of between 30 and 180 days; however, the longer the elimination period, the lower the premium.
The exclusion rider indemnifies the health insurance provider against financial loss due to a pre-existing or catastrophic illness such as cancer or HIV. Some prospective policyholders attempt to purchase health insurance when the benefits are required, called "adverse selection." Therefore, most states permit insurers to review the medical history and exclude pre-existing conditions entirely or for a specific amount of time. For example, if a policyholder has hypertension controlled by medication, the policy can be modified to exclude hypertension-related care or the policy can be issued with a very large premium to include hypertension. The alternative is to purchase the less expensive policy with the exclusionary or elimination rider, and the patient will assume responsibility for any financial implications resulting from that condition.
Many health insurance companies, concerned and impacted with the rising cost of an extended hospitalization, limit these benefits. Policyholders can purchase an extended stay rider. This accompaniment increases the cost of the policy but extends the number of days the policy will cover from 30 days, for example, to 60 days or longer in the event of a catastrophic illness or injury. For policyholders with illnesses such as cancer or HIV, this rider is the difference between financial hardship and financial security.
Health insurance coverage can effectively help to offset the skyrocketing costs of health care. Health insurance riders can ensure insurance coverage despite pre-existing illnesses, extended hospital stays, and long-term care needs of the policyholder.
