UnitedHealth Insures Against Becoming Uninsured

Just when you thought the nation's health insurance system couldn't get any more byzantine: Now you can buy insurance to protect yourself from losing your health insurance.

That's the basic idea behind UnitedHealth Continuity, a new product rolled out this week by insurance giant UnitedHealthcare. It's only for people who currently have coverage through their employers, but who fear they might lose it or may want to retire early and will need coverage to tide them over until they become eligible for Medicare.

You have to be healthy to enroll in a continuity plan — or healthy enough to qualify for an individual health insurance policy. If you do qualify, then you can select the plan of your choice and pay 20 percent of the premium each month to keep the plan on "inactive" status. When you leave or lose your job and the health insurance that goes with it, you can start your individual continuity plan even if you've developed medical problems in the interim.

"You can activate it when you need it and not worry about some health event interfering with your ability to get health insurance in the future," says Richard Collins, who heads UnitedHealth's individual insurance unit.

Collins, who is 52, actually became the first customer for the new product. He chose a plan with a $2,500 annual deductible and a $250 monthly premium. So he's paying $50 a month — 20 percent of the premium — to guarantee his access to the plan should he need it in the future.

But Robert Laszewski, a health insurance industry consultant, says he can't imagine the market for the new product will be very large.

"It would have to be someone who wears a belt and suspenders at the same time," he says. "Someone who has a job and health insurance, and is afraid they're going to get laid off and COBRA won't be enough."

COBRA is the federal law that requires most employers to permit those who lose their jobs to keep their health insurance for an additional 18 months if the workers pay the entire premium.

Laszewski says the product also assumes that efforts to overhaul the nation's health care system — including promises made by President-elect Barack Obama to ban the use of pre-existing condition exclusions in health insurance — will not come to pass.

"It's a bet against Obama being successful," he says, "because if Obama is successful in the next few years, this product has no value."

Collins, however, says the timing of the rollout is a coincidence.

"We started work on this product years ago," he says.

Still, Collins admits he's not counting on the federal government to fix what ails the health insurance market.

"We're also uncertain about what kind of reform is coming down the road," Collins says. "In the meantime, it's a great tool to use for financial planning purposes for your future security."