Paying now for the right to buy health insurance in the future

Do you have health insurance currently but wonder about your ability to obtain or maintain coverage in the future? United Healthcare has recently announced a new product which is basically the right to be able to buy health insurance in the future, even if you should eventually become sick or uninsurable. The product will likely have very limited appeal, but it is certainly an interesting idea.

Here's how it works. In order to be qualified to purchase the product, you will need to pass a medical exam. Once you have passed the health requirements, you would pay 20 percent of the current premium on an individual policy. This monthly payment would permit you the option to become insured under the plan at some date in the future. (If you ever did become insured under the plan, your premiums would increase to the "regular" rate.)

The premiums would vary according to a person's age and sex. An article in the New York Times estimates that a 50 year old man would pay $32 a month now for a policy that costs $159 a month now. Such a policy would require the owner to pay the first $3,500 in medical expenses. If you are already sick, you wouldn't be able to purchase this product at all.

People who might be interested in this product would be those individuals who might be retiring early and those people who work on a contract basis who find themselves between employers frequently. However, these people would likely also have access to continuing coverage under COBRA, so they could get coverage that way. That is why the market for this product is probably very small.

The downside even if you are healthy and can qualify? You may end up paying premiums unncessarily for many, many years. Also, if health care reform happens in the future, these policies may become obsolete. So beware.