I'm self-employed with an individual insurance policy. When the company I had the policy with went out of business a couple of years ago, I switched to a national provider after the agent assured me I could transfer the policy to another state. Well, I moved, and he was wrong. The same company in this state says I have to qualify and start waiting periods all over again. I'm over 50 and in pretty good health, but I do have a couple of "conditions" -- not major, but you know insurance companies don't care about that. I'm frustrated, too, because these companies seem to consider menopause a pre-existing condition! Any advice?

M.C.

Many people today find themselves in the center of conflicts between federal and state laws governing health insurance. Until recently, the regulation of individual and group health insurance was the responsibility of the 50 states. Each state has a department of insurance, or equivalent, with a commissioner or other official in charge of the department. The department is charged with the tasks of regulating the business of insurance in the state, including consumer protection, monitoring the financial solvency of insurance companies, and approving (or disapproving) insurance products and, sometimes, premium rates. The department works with the legislature to create an insurance environment that addresses the insurance issues in that state.
This system generally has worked well, except that it has created a "patchwork" insurance environment that can be confusing for both consumers and insurance carriers. In 1996, the situation became more complex when the U.S. Congress passed several laws regulating the business of insurance. Now we not only have state laws and regulations, but also federal laws and regulations, and this has created massive confusion for millions of Americans.

The situation described in this question is, in part, the result of this regulatory morass. Federal law guarantees that all insurance is renewable at the option of the policy holder with just a few exceptions. This overlays state laws that govern the renewability of insurance plans. For example, some states require that individual insurance held by a resident of that state must have been sold to the person by a resident agent in that state. This conflicts with the federal law that says insurance cannot be cancelled.

But there is a small catch here. If the insurance plan involved is for a limited geographical area, such as an HMO or other type of network plan, the insurance can be terminated when the person moves out of the geographical service area of the plan.

If the health plan is one that is not limited to a particular service area, such as an indemnity or "fee-for-service" plan, and there is no intervening state law, it is possible to take your health plan from state to state. At the very least, if the insurance company is nationwide and you are trying to maintain continuous coverage, there is little reason for the company to require you to re-apply and re-qualify, and they should not impose another exclusion period for pre-existing conditions. After all, the company accepted you before and you have been paying your premiums. It is not as if the company is taking on a new risk -- it is merely continuing a risk it already accepted.

In this situation, there are several steps to take. First, read your insurance policy. Is it a limited network plan? If so, you will definitely need a new insurance plan in your new state of residence. If not, the second step is to consult your state's department of insurance to determine whether there are any laws prohibiting you from keeping your original plan of insurance. Third, call the company and ask to talk to a high-level person in the underwriting or actuarial department. Explain your situation -- that you already have a plan from this company, but you have moved and want to keep your insurance. Perhaps the person will see that your request is valid and that you pose no new risk to the company.

You may also want to call your original insurance agent for help. Maintaining continuous insurance coverage is the prudent and responsible thing to do, and insurance companies ought to work with consumers to accomplish this.