The cost of health insurance is skyrocketing, especially if you are self-employed. This means that your selection of a policy could become one of the most important financial decisions you make. This is true with regard to the monthly premiums as well as the potential costs if you have major health issues. The following are tips with regard to shopping for health insurance gleaned from health insurance experts:
• Shop carefully before you buy. Policies differ as to coverage and cost and companies differ as to service.
• Don’t buy more policies than you need. Duplicate coverage can be expensive and generally is unnecessary. A single comprehensive policy is better than several policies with overlapping or duplicate coverage.
• What is the maximum “out of pocket” costs? If the plan you are looking at does not have an out of pocket maximum you may want to protect yourself and continue shopping.
• What are the deductibles? Deductibles can be confusing since they can apply to more than one part of the health insurance plan. For example, prescription drugs can have one deductible and hospitalization can have a separate deductible. You need to find out what the deductibles are for all parts of the plan. You also want to find out if the deductible is per year or once per occurrence.
• Co-insurance. Co-insurance is the percentage of the bill you are responsible for after you satisfy your deductible. For example, a plan with 80/20 co-insurance means you would be responsible for 20% of the bill up to the out-of-pocket maximum.
• Know the plans’ limitations. Some health insurance plans limit doctor’s visits or prescription drug coverage. Ask if the plan has any limitations regarding doctor visits, prescription drug coverage or wellness visits. You will also want to know the policies lifetime maximum payout. Also, you can select a health insurance plan that has unlimited/no cap on prescription drug coverage.
• If using an insurance agent. Check references and make sure you get quotes and details in writing. Don’t meet with an agent until you receive a quote. Don’t fall for high-pressure sales tactics and always ask if it is a discount plan rather than a Major Medical Plan. Never purchase a plan where they tell you that you have to pay for your first month before they send you any information.
• Be sure of the status of daily limits in the health insurance plan.
If the health insurance plan offers daily limits on hospital stays or room/board, (a “Scheduled Benefit Plan”) and the plan puts caps on various hospital or surgical services like surgeon’s fees, miscellaneous expenses, etc., this could cost you significantly for a major health event.
• Pre-existing conditions. Many have pre-existing conditions. The health insurance carrier will typically put a rider on these conditions and tell you that only the specific “ridered” conditions will not be covered. This is only the partial truth. If a major condition such as a heart attack is caused by the pre-existing condition such as high blood pressure, they could deny coverage. You can select a company that charges you a little extra per month and does not impose riders, it may be worth a few extra dollars.
• Run through some scenarios. A great way to get your questions answered if you’re unfamiliar with health insurance terminology is to ask the agent for examples of what you would owe or be responsible for in different situations. For example, if I had a heart attack and the bill was $50,000 what would I owe?
• Policy delivery or refunds should be prompt. The insurance company should deliver a policy within 30 days. If it does not, contact the company and obtain in writing the reason for the delay. If 60 days go by without a response, contact your state insurance department.
This is obviously an important decision. Learn the terms and shop carefully. Do you know the difference between a PPO and HMO? Learn the terms!
Sources: VIMO.com, HealthNation.com, ElderCare.com.
