I have been a multi state licensed health and life insurance broker for almost 15 years now. One of the biggest  challenges I have had to deal with through the years has been trying to help the uninsurable. Unfortunately in most  states if you have one of a host of "pre-existing" medical conditions you are labeled as uninsurable on an individual  health insurance policy. In most states this uninsurable status lasts for many years and sometimes for life depending on  the specific pre existing condition you have been diagnosed with. Some of the pre existing medical conditions that  render an applicant uninsurable for ten years or more are: Heart Attack, Stroke, Diabetes, Cancer, Lupus, Multiple  Sclerosis, Muscular Dystrophy, Degenerative Arthritis and a host of other pre existing conditions. In addition, there are  applicants who have a combination of controlled pre existing conditions but because they have more than three  "ratable conditions" they are labeled uninsurable. For example, with many carriers an applicant who has Hypertension  & Hyperlipidimia but is also overweight falls under the "3 strikes your out" rule and is labeled uninsurable. Or an  applicant may have two of the aforementioned controlled conditions and is not overweight but is a smoker and is  then labeled uninsurable also. Or an applicant who has asthma but also smokes falls in to the same uninsurable  category with many carriers.

These are just a few examples of conditions or "combo conditions" that can render an applicant uninsurable. The question then becomes, what do I do now? Who will insure me against the catastrophic medical bills that I may face in the future? Who will help me pay for the medications I currently am taking to control the aforementioned conditions? For many years depending on the state you live in you only had two options. They are as follows: 

1.) If you have a corporate tax i.d. number you can purchase a small group health insurance policy from most insurance carriers. With this scenario a minimum of two people (often husband & wife) who work for the same corporation can apply for a small group health insurance policy. After a period of time, or in some cases immediately (depending on how many months you have had prior health insurance coverage without a lapse) pre-existing conditions will be covered provided that they are a covered expense on the policy.

2.) Enroll in your states insurance risk pool (if your state is fortunate enough to have one). In our home state of Illinois the risk pool is called the Illinois Comprehensive Health Insurance Plan (ICHIP). ICHIP is a state health benefits program and not an insurance company. Persons must qualify for coverage but in most cases if the applicant is coming off an exhausted qualified COBRA continuation plan from a prior employer sponsored group, their pre existing conditions will be covered from day one (provided again that those conditions are a covered expense on the ICHIP policy). However, ICHIP (and all insurance risk pools) are by no means entitlement programs. They are far from free! Premiums charged are established by law at from 125%-150% above the average rates charged individuals for comparable major medical coverage by five or more of the largest insurance companies in the individual health insurance market in that state. Suffice it to say, the premiums are far from affordable for many people. The rates for a person 50 years of age living in Chicago can range from $554 monthly for a $5,200 deductible plan to $852 monthly for a $500 deductible plan. For those who do not have a Risk Pool in their State (http://www.naschip.org/states_pools.htm) their options are then even more limited if they are labeled as uninsurable.

The two aforementioned options are legitimate Health Insurance options for the uninsurable. It is important to steer clear of the two other "options" presented to the Uninsurable. They are as follows:

1.) Discount P.P.O. network memberships that are by no means health insurance policies. We've all seen them advertised from company's like "Care Entree" or "Ameriplan" that offer "health coverage" (clever way to circumvent the words "health insurance") that will "cover" the entire family for $89 monthly! Beware of these kinds of "discount" products! Learn more in the September 23rd 2008 Issue of The Tennessean Newspaper

These kinds of discount "coverage" plans are so inexpensive because they provide nothing more than a P.P.O. re-pricing discount. This in itself is not a bad thing. However without a Major Medical or Defined Benefit health insurance policy in place one can experience catastrophic medical bills with these types of "health coverage" plans. This is the case because the average P.P.O. discount on medical procedures performed within a P.P.O. network is between 25% & 40%. For a $100 doctor office visit, this is a good deal. However, if the medical bill is $500,000 that can leave the "covered" person with as much as $200,000 in out of pocket expenses!

2.) "Defined Benefit Health Insurance Policies". These policies do indeed provide Guaranteed Issue Health Insurance coverage for the uninsurable. However, the benefits provided are severely insufficient if one were to experience a major medical illness of any kind. These benefits provide a maximum of only $1,000 a day in the hospital and will provide coverage for surgical benefits but only up to the Medicare reimbursement ratio and they provide no coverage for "facility fees" (e.g. hospital fees related to the surgery which can be exorbitant). The two most popular of these plans are available through "AIM" (Association of Independent Managers) and the "Cinergy" plans. Both plans were formerly insured by American Medical & Life Insurance company of New York and NOVA Insurance company.

CONSUMER ALERT!! As of September 28th, 2009 the AIM plans have a issued a "cease & desist" order to all agencies nationwide to stop selling their Defined Benefit Health Insurance policies because AIM no longer has an insurer. American Medical & Life Insurance company (their former primary carrier) was replaced by NOVA Insurance company earlier this year. Now, (as of September 28th, 2009) NOVA has withdrawn as their carrier leaving AIM with no Health Insurance carrier to underwrite future applications or to pay existing claims.

About the author: C. Steven Tucker, is the President of Small Business Insurance Services, Inc. He is a multi-state licensed insurance broker who has been serving the Small Business community and Self-Employed for 15 years. C. Steven has served as a Subject matter expert for the Wall Street Journal and Fortune Small Business Magazine and hosts his own Internet radio show, entitled, "Health Insurance 101." He is also touted for being a consumer watchdog against greedy insurance companies, insurance scams and unscrupulous agents on Twitter.