Things to Consider – Individual & Family Health Insurance

Choosing between health insurance plans is not an easy task. Health insurance can be very confusing. Although no plan will pay for all costs associated with you or your family member’s medical care and treatment, some plans will cover more than others. ALL HEALTH INSURANCE PLANS ARE NOT CREATED EQUAL! You must do your homework, or make sure you deal with an agent that does it for you, and has the experience to do it right. Following is a list of questions to consider when reviewing health insurance plans to best meet your needs:

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What is the insurance carrier rated?

Many carriers operate in only their state and many of these carriers have very little financial resources to withstand hard times and/or large claim losses. It is imperative that you select a company that can weather the inevitable storm.

What is the insurance carrier's history of claims payment and customer service?

A good rating is important; however, you need to also determine if the company has a good reputation for prompt and fair claims payments. This can sometimes be hard to find out, but in many states the insurance department will maintain what is a called a “complaint ratio” which is usually a good indicator of how a company is paying claims and satisfying their policyholders. The lower the complaint ratio, the better the company is satisfying their policyholders.

Does the carrier specialize in health insurance?

While a good rating is important, another factor that is just as important is to make sure the company specializes in health insurance. Due to rising costs and shrinking profits, many large, top rated carriers have exited the market completely in recent years because the health insurance market only represented a small portion of their overall business. Making sure your carrier is a “specialist” in the market means you will minimize the chance of this happening.

Does the company do a lot of business in your state?

Once again, this is very important. Your company can be highly rated and be primarily in the health insurance business, but if it does not do a substantial amount of business in your state, there is a much higher likelihood that the carrier may pull out of the state if laws change that would make it unfavorable to continue to do business in that state. For this reason, it’s crucial that you know the company has not only a firm commitment to the health insurance market, but a firm commitment to your resident state as well.

Is the coverage comprehensive?

This is a tricky one, to say the least. The average consumer (and agent, for that matter) does not know what coverage limits and/or benefits to look for, and every plan is different. Specifically, you should look for any limitation on any benefit, whether in the form of a dollar amount or percentage amount. For example, a policy may pay for outpatient chemotherapy (which can be very expensive), but they may put a limit of AWP (average wholesale price). This amount could easily be exceeded. The rule of thumb is that any time you see a limit represented by either a dollar amount or percentage amount, make sure you are aware of the potential danger to your pocketbook.

Limitations to look for:

If any of these categories are not covered, it could literally cost you tens of thousands of dollars out of your pocket. IT IS EXTREMELY IMPORTANT THAT YOU KNOW HOW YOUR POLICY COVERS THESE ITEMS. REMEMBER, IF AN ITEM IS NOT COVERED, THE EXPENSE YOU PAY WILL NOT GO TOWARD SATISFYING YOUR DEDUCTIBLE. Be sure your policy covers the following, and even if it does, look for dollar or percentage limits:

Outpatient labs, diagnostic procedures and x-rays

Ambulance, both air and ground ambulance

Outpatient doctor office visits

Outpatient chemotherapy and/or radiation therapy

Surgical fee limits

Daily room benefit limits

Intensive care limits

Outpatient prescription drug limitations

Outpatient therapies, (physical, occupational, rehab, etc).

What are the deductible choices?

Many agents will not show you all the deductible choices. You might be surprised to find out, for example, that if you raised the deductible from $500 to $1,000 you could save $400 in premium every year. In other words, you are PAYING $400 for the POTENTIAL of the company paying an additional $500. In most cases, it makes sense to look at the larger deductible and save a lot of money in premium payments.

What hospitals, doctors and other medical providers are in-network?

Provider networks can vary greatly from one company to the next. Some companies offer choices of different networks, allowing you to choose the one that best suits your needs. Ask your agent what networks are available. And remember, PPO networks are not static, providers come and go within the networks, so the best way to see if a specific provider is on the network is to either call the provider’s office and ask, or go to the network’s website and do a provider search.

What is the penalty for using out-of-network providers?

Virtually all PPO health plans have higher costs for going to an out-of-network provider. This higher cost can be in the form of additional deductibles, lack of co-pays, and/or additional co-insurance after the deductible is satisfied. This can vary widely from plan to plan, so make sure you know what the penalties are to go out of the network.

What are the exclusions and limitations of the health insurance plan?

Every plan has a list of exclusions and limitations. Simply put, these are things that are not covered under the plan. Make sure you read these and are willing to accept the things listed as not payable under the plan.

How are Pre-Existing conditions covered?

The way preexisting conditions are covered is extremely important (assuming you want claims to be paid in the future). The best policies will immediately cover preexisting conditions that are disclosed on the application and not specifically excluded. Under the Affordable Care Act, all pre-existing conditions are covered. One needs to make sure the policy is ACA-compliant.

Does the plan have a doctor's office visit co-pay?

In some plans, co-pays are paid in lieu of the deductible being satisfied and may not count towards satisfying your deductible.  You also may want a plan where both of these apply to your annual out-of-pocket maximum. Most people think they really need to have a co-pay at the doctor’s office, however, if they knew how much additional premium they were paying to get that co-pay, they make think differently. For example, a family of four might pay an additional $80 per month to have a $30 co-pay versus having to pay the entire office visit out of pocket. This means that the family is paying $960 per year extra to get a little discount when they go to the doctor 2 or 3 times per year. If the average visit would normally cost $60, this means the co-pay would save $30 for each visit. In this example, the family would have to have 32 office visit co-pays before they would have actually saved any money ($960 cost divided by $30 savings per visit = 32 office visits). Bottom line–see if the plan has the ability to be purchased without the co-pay option, and see if it would be worthwhile to save the premiums and pay for it out of your own pocket. 

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The Bottom Line
The health insurance carrier and plan you select could be the most important financial decision you ever make. A bad choice can be financially devastating. A good choice can save your hard earned money. Make sure you do your homework, or at least make sure you deal with an agent that specializes in the health insurance market. At Brassard & Associates, we specialize in health insurance, so you can rest assured that we know the market and are qualified to help you make proper, educated choices when it comes to your family’s healthcare decisions. Not only will you save money, but you’ll probably sleep better at night knowing your family is properly protected.