Health Insurance and Your State of Residence

Health Insurance and Your State of Residence 

If you have an individual insurance policy, do you know if the policy requires you to live in the state considered your permanent residence? This is critical if you have an HMO or Medicare Advantage product tied to a specific geographic area. Your policy may only cover urgent and emergency care outside your area. There are many other policies, however, that also have residency requirements and you should know if your policy has such a requirement.

In addition, small business owners who have employees in more than one state should be aware of what both state and insurer residency requirements are for their small group policies.

What are the risks of having insurance from a state where you don’t reside?
You may not be eligible for the coverage and your claims may be denied.

Who is most at risk for this type of problem?
Those most at risk are people who have moved to another state and kept their individual policies, parents who have moved to be closer to adult children and affluent individuals who have multiple homes and haven’t aligned insurance with state of residence.

Medicare Prescription Drug Coverage Part D

Medicare Part D plans have a residency requirement. In fact, drug plans are required by federal regulations to automatically disenroll individuals they believe have moved outside the service area.

We have a client whose Part D coverage was terminated when she was temporarily residing outside the service area but hadn’t changed her legal residence. The client was at risk for significant prescription costs not being covered or paid.

The worst-case scenario is a Part D Plan issuing a termination letter where a covered individual either doesn’t receive it or doesn’t act upon it on a timely basis. This could result in no coverage until one enrolled in a new plan during the annual enrollment period. This is a very important issue as everyone on Medicare should have drug coverage.

Author: Maura Carley, MPH, CIC, President and CEO, Healthcare Navigation, LLC.   (From a MyBackOffice blog post)