How to Get a Better Deal on Health Insurance
Have you gotten a 'Dear Subscriber' letter from your health insurer lately? If you haven't, you probably will.
It's the season for notifying individual customers that their monthly premiums are going up as of January 1. It's also 'open enrollment' season, when companies ask employees to review their choices and change plans if they wish.
My letter says the folks at my insurance company greatly value their relationship with me, and as of the first of the year, I'll pay $560 a month for my individual coverage, a price increase of a bit over 20% from this year's rate
Now, I'm one of those people who can put off reviewing a major personal decision for decades. My latest and lamest excuse was that Congress could enact health insurance reform any day now, and force me to review my options all over again.
Fat chance.
But $6,720 a year is a lot of dough, and it forced me to look into my options.
Here's hoping my legwork saves you the crushing headache it gave me.
The Big Tradeoff
If you're buying your own health insurance as an individual or for your family, you can compare plans side by side on several sites. EasyToInsureME.com is easy to browse because it doesn't ask a lot of questions up front, and you're not required to give contact information.
Note: If you have your own business, including at least one employee, you may be able to get a better price on a group plan. You're also eligible for a group plan if you're a husband-and-wife team, but be prepared to prove it with copies of tax forms.
Here's the big tradeoff:
You can pay a big monthly rate with little or no deductible and small or no co-payments for routine doctor's visits, or tests, or prescriptions and other services. Or, you can pay a smaller monthly rate with a big deductible -- at least $2,500 and up to $7,500 or more -- plus substantial co-payments or no coverage for some services.
The monthly cost difference is substantial. The fuller coverage costs roughly twice as much. And there are much cheaper plans that cover virtually nothing except a catastrophe.
Most people think of that choice as a crapshoot, as in, 'I only need insurance if I get hit by a truck.'
That may have been true in the past, but routine health care has become wildly, unpredictably expensive. A child with the sniffles can undergo tests that cost hundreds. A pain in your knee can be treated with injections that cost several thousand dollars, after x-rays that cost hundreds, and that's a recurring expense every year or so.
The bottom line is, if you go with the cheaper monthly rate, you should consider at least budgeting money for unexpected health costs, or you will avoid going to the doctor even though you're paying for health insurance.
And watch out for the really bad plans. A Consumer Reports article says:
"We've seen policies that cap outpatient care at $2,000 per year or pay only $900 per day in hospital expenses. When heart bypass surgery costs $45,000 and outpatient cancer chemotherapies can cost as much as $14,000 per treatment, such policies are guaranteed to leave you with crushing medical debts for normal treatments if you face a serious illness. You can identify those policies because they are usually labeled 'limited benefit' or 'not major medical' policies."
Where's the Catch?
More like, where are the catches?
All of your research can give you an idea of what's available for you in your state.
When you actually apply, you'll find out whether a company is willing to cover you. They'll want to know if you've been hospitalized in the past five years or so, if you take any prescription medication, and if you've been treated for a 'major condition' in the past year. Your age, gender, and weight affect your rates, too.
If any of the versions of health-care reform now floating around Congress pass, some of these questions may be moot. Or not.
If you're wondering about my decision on health-care insurance, the answer is 'undecided.' I discovered at eHealthInsurance.com that my insurer is rated 'marginal' in terms of financial stability, meaning its ability to pay its obligations to subscribers.
Oddly, I'm not sure that's a bad thing. The companies that are healthiest financially may be the ones that are most skilled at not reimbursing their customers.
About the Author:
EasyToInsureME.com offers clients the easiest way to buy individual health insurance. Free services include instant online health insurance quotes, custom proposals for each client, free phone consultation, and 10-minute application by phone. Nobody does what we do for our clients!
Author: Chad