Choosing a Health Insurance Plan
Click on any of these links to skip to a section:
Overview
What to Look For:
The Deductible
Outpatient Benefits
Per-Day Limits
Co-pays
Other Considerations
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Overview
Choosing the right health insurance plan can be very time consuming but not
choosing carefully can change your whole life. Having the right plan means the difference
in getting the care you need or having to do without. It also can mean the difference
between going through your care while focusing on getting well or going through care
realizing that you will be bankrupt just for getting it. Or, worse yet, that your family
will be bankrupt if you get the care you need to survive.
No one needs to be in that terrible position. Choose wisely. There are plenty of affordable
plans. I am often amazed at the way people click around and make
the choice with little information. Advice is free so why not take advantage of it? All
insurance companies file their plan and the rates for it with each state they operate in.
If you buy your plan alone and online it will cost exactly the same as it would if you get
a professional to help you.
What Should I Look For?
The most obvious is the maximum limit the policy will pay. $2 million is the most common
lifetime limit. You can buy $10 million or more but you pay for it and you should think
about the likelihood you’d ever have a claim that large before you spend the money on it.
Over the years it can turn into a windfall for the insurance company.
The Deductible
The deductible is the biggest factor in determining your rates. All plans have a particular
breakpoint where the risk and expense make the most sense. Make that deductible too high and
you may find yourself with a claim that’s hard to pay while you saved relatively little on
premium. Make the deductible too low and you will be giving the insurance company a lot of
money you’ll never benefit from. Finding that spot in each plan can be a challenge for some
but it’s there.
The deductible should be an annual deductible NOT a per occurrence deductible. Sometimes bad
things happen in bunches. You get very sick and are hospitalized, then go home and have an
allergic reaction to your medication, then develop a secondary infection. If you were
hospitalized three times that year you should not have to pay three deductibles. Quality
plans have an annual deductible. Seeing a plan with more than one possible per year should
be your first clue that you are looking at a plan designed to limit the isnurance company’s
losses, not yours. Shop again!
Outpatient Benefits!
The single biggest blind spot in individual health insurance coverage today is in what they
don’t cover. Nearly all companies have plans out now that offer a slightly lower premium but
offer very limited out patient benefits. In this day and age it is the outpatient benefits
that should be highest. Think about the last time someone you know was in need of major care.
Chances are their surgery was performed in an outpatient manner. Gall Bladders, appendix, even
heart surgeries are done as outpatient procedures now. However, if you look at the plan that is
$20 a month less it is very likely the outpatient benefits have been severely limited. Of the
largest insurance companies I can show you plans being sold to unsuspecting consumers every
day where the fine print limits outpatient benefits to $2500 a year. If you need you gall
bladder out and later that year had appendicitis the bills would run tens of thousands but the
policy would pay only $2500. Another one limits outpatient procedures to only those incurred
within 10 days of a hospital confinement. How many times do you know of where someone had an
outpatient surgery and was hospitalized within 10 days? Not many, so that company won’t pay any
of the bill for the outpatient surgery. No prize for guessing who gets to pay it!
There should be NO separate limit for outpatient benefits. They should be available to the same
level as the policy maximum. IF you are being treated for a deadly illness on an outpatient
basis you don’t want to stop care jus because you hit that low limit. Insurance companies know
that is where the expenses are these days. Consumers need to think of it too. A professional
specializing in health insurance knows the plans well.
Per Day Limits
Another tip off to a less than stellar plan is one that has a per day limit as to what the
insurance company will pay. Most plans of this type show per day limits of $300, $600 or $900.
Have you priced a day in the hospital lately? This can go much higher if you need intensive
care. This type of plan only has a place for those who are otherwise uninsurable. If you had a
triple by-pass last week and still have a brain tumor this type of plan may be all you can get.
Even then it should not cost more than $300 a month. I see people all the time paying $600 and
even a $1000 a month for a plan with limits so low it is nearly worthless. They often think they
have major medical, instead they have a plan full of limits.
Co-Pays
Tread carefully here. With small children they can save you money but for many they end up being
an extra expense. Lately I have found the average family spends about $200 a month extra for a
plan with co-pays. Ask yourself first how much you spend on doctor visits each year. If your
doctor’s cash price for a visit is $50 would it be better to just pay for it your self? Some of
the most common plans on the market now offer only 4 doctor visit co-pays a year, yet cost about
$100 a month more that a plan without a co-pay. If you go the doctor and pay a $35 co-pay 4 times
a year instead of $50 for a cash visit then you paid $1200 to the insurance company to save $60
on doctors visits. Unless you get unlimited visits and actually go a lot the co-pay route may not
be best for you. I always help my clients weigh the benefits vs. the expense so they can make a
wise decision here as well.
Other Considerations
The list of variables and decisions in this process is extensive. I just hit on some highlights.
For a guided tour through your decision jungle just give me a call.
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