What happens when COBRA coverage ends?

Q. Our daughter's COBRA coverage just expired and she's been turned down for individual insurance policies in Ohio—probably because she smokes and is overweight. Does she have any other options?

A. Yes, but tell her to act quickly. The Health Insurance Portability and Accountability Act (HIPAA) guarantees that anyone whose COBRA coverage runs out is entitled to purchase a specially-designated individual plan, without being subject to a waiting period or exclusions for pre-existing conditions. But to take advantage of this right, you must begin new coverage within 63 days after COBRA ends.

States handle this guarantee in different ways. In Ohio, the program is called Open Enrollment, and it offers two plans, Basic and Standard. The Basic plan has lower premiums but less comprehensive coverage than the Standard plan, and generally higher deductibles and co-pays. Unfortunately, comparing plans is a challenge because Ohio provides this coverage through more than two dozen insurance carriers offering different benefits for different rates. The good news is that most of the companies still accept applicants (they're allowed to close enrollment once they've met state-established quotas), so your daughter still has plenty of options.

The Ohio Department of Insurance has published a chart comparing sample rates for the Basic plan, which vary by gender and age, and also has more details about Open Enrollment eligibility.

If your daughter can't afford the premiums for these plans, she can apply for federally-subsidized coverage through the Ohio High Risk Pool administered by Medical Mutual of Ohio. The catch is that she has to be uninsured for six months to qualify.

By 2014, when the Affordable Care Act is fully in place, people in your daughter's situation will have more economical options, and insurers will have to accept them regardless of any pre-existing conditions. But one important provision of health care reform has already taken effect: coverage for specified preventive services without co-pays or deductibles. Among the covered services are weight-loss and smoking-cessation counseling, in case your daughter ever feels ready to address those issues.

Read more of our coverage of health insurance.

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—Nancy Metcalf