Small Business Health Insurance - The Best Policy Is A Great Agent
I have been a health insurance broker for over a decade and every day I read more and more "horror" stories that are posted on the Internet regarding health insurance companies not paying claims, refusing to cover specific illnesses and physicians not getting reimbursed for medical services. Unfortunately, insurance companies are driven by profits, not people (albeit they need people to make profits). If the insurance company can find a legal reason not to pay a claim, chances are they will find it, and you the consumer will suffer seguro saúde. However, what most people fail to realize is that there are very few "loopholes" in an insurance policy that give the insurance company an unfair advantage over the consumer. In fact, insurance companies go to great lengths to detail the limitations of their coverage by giving the policy holders 10-days (a 10-day free look period) to review their policy. Unfortunately, most people put their insurance cards in their wallet and place their policy in a drawer or filing cabinet during their 10-day free look and it usually isn't until they receive a "denial" letter from the insurance company that they take their policy out to really read through it.
The majority of people, who buy
their own health insurance, rely heavily on the insurance agent selling the
policy to explain the plan's coverage and benefits. This being the case, many
individuals who purchase their own health insurance plan can tell you very
little about their plan, other than, what they pay in premiums and how much
they have to pay to satisfy their deductible.
For many consumers, purchasing a
health insurance policy on their own can be an enormous undertaking. Purchasing
a health insurance policy is not like buying a car, in that, the buyer knows
that the engine and transmission are standard, and that power windows are
optional. A health insurance plan is much more ambiguous, and it is often very
difficult for the consumer to determine what type of coverage is standard and
what other benefits are optional. In my opinion, this is the primary reason
that most policy holders don't realize that they do not have coverage for a
specific medical treatment until they receive a large bill from the hospital
stating that "benefits were denied."
Sure, we all complain about
insurance companies, but we do know that they serve a "necessary
evil." And, even though purchasing health insurance may be a frustrating,
daunting and time consuming task, there are certain things that you can do as a
consumer to ensure that you are purchasing the type of health insurance
coverage you really need at a fair price.
Dealing with small business owners
and the self-employed market, I have come to the realization that it is
extremely difficult for people to distinguish between the type of health
insurance coverage that they "want" and the benefits they really
"need." Recently, I have read various comments on different Blogs
advocating health plans that offer 100% coverage (no deductible and
no-coinsurance) and, although I agree that those types of plans have a great
"curb appeal," I can tell you from personal experience that these
plans are not for everyone. Do 100% health plans offer the policy holder
greater peace of mind? Probably. But is a 100% health insurance plan something
that most consumers really need? Probably not! In my professional opinion, when
you purchase a health insurance plan, you must achieve a balance between four
important variables; wants, needs, risk and price. Just like you would do if
you were purchasing options for a new car, you have to weigh all these
variables before you spend your money. If you are healthy, take no medications
and rarely go to the doctor, do you really need a 100% plan with a $5
co-payment for prescription drugs if it costs you $300 dollars more a month?
Is it worth $200 more a month to
have a $250 deductible and a $20 brand name/$10 generic Rx co-pay versus an
80/20 plan with a $2,500 deductible that also offers a $20 brand
name/$10generic co-pay after you pay a once a year $100 Rx deductible? Wouldn't
the 80/20 plan still offer you adequate coverage? Don't you think it would be
better to put that extra $200 ($2,400 per year) in your bank account, just in
case you may have to pay your $2,500 deductible or buy a $12 Amoxicillin
prescription? Isn't it wiser to keep your hard-earned money rather than pay
higher premiums to an insurance company?
Yes, there are many ways you can
keep more of the money that you would normally give to an insurance company in
the form of higher monthly premiums. For example, the federal government
encourages consumers to purchase H.S.A. (Health Savings Account) qualified
H.D.H.P.'s (High Deductible Health Plans) so they have more control over how
their health care dollars are spent. Consumers who purchase an HSA Qualified
H.D.H.P. can put extra money aside each year in an interest bearing account so
they can use that money to pay for out-of-pocket medical expenses. Even
procedures that are not normally covered by insurance companies, like Lasik eye
surgery, orthodontics, and alternative medicines become 100% tax deductible. If
there are no claims that year the money that was deposited into the tax
deferred H.S.A can be rolled over to the next year earning an even higher rate
of interest. If there are no significant claims for several years (as is often
the case) the insured ends up building a sizeable account that enjoys similar
tax benefits as a traditional I.R.A. Most H.S.A. administrators now offer
thousands of no load mutual funds to transfer your H.S.A. funds into so you can
potentially earn an even higher rate of interest.
In my experience, I believe that
individuals who purchase their health plan based on wants rather than needs
feel the most defrauded or "ripped-off" by their insurance company
and/or insurance agent. In fact, I hear almost identical comments from almost
every business owner that I speak to. Comments, such as, "I have to run my
business, I don't have time to be sick! "I think I have gone to the doctor
2 times in the last 5 years" and "My insurance company keeps raising
my rates and I don't even use my insurance!" As a business owner myself, I
can understand their frustration. So, is there a simple formula that everyone
can follow to make health insurance buying easier? Yes! Become an INFORMED
consumer.
Every time I contact a prospective
client or call one of my client referrals, I ask a handful of specific
questions that directly relate to the policy that particular individual
currently has in their filing cabinet or dresser drawer. You know the policy
that they bought to protect them from having to file bankruptcy due to medical
debt. That policy they purchased to cover that $500,000 life-saving organ
transplant or those 40 chemotherapy treatments that they may have to undergo if
they are diagnosed with cancer.
So what do you think happens almost
100% of the time when I ask these individuals "BASIC" questions about
their health insurance policy? They do not know the answers! The following is a
list of 10 questions that I frequently ask a prospective health insurance
client. Let's see how many YOU can answer without looking at your policy.
1. What Insurance Company are you
insured with and what is the name of your health insurance plan? (e.g. Blue
Cross Blue Shield-"Basic Blue")
2. What is your calendar year
deductible and would you have to pay a separate deductible for each family
member if everyone in your family became ill at the same time? (e.g. The
majority of health plans have a per person yearly deductible, for example,
$250, $500, $1,000, or $2,500. However, some plans will only require you to pay
a 2 person maximum deductible each year, even if everyone in your family needed
extensive medical care.)
3. What is your coinsurance
percentage and what dollar amount (stop loss) it is based on? (e.g. A good plan
with 80/20 coverage means you pay 20% of some dollar amount. This dollar amount
is also known as a stop loss and can vary based on the type of policy you
purchase. Stop losses can be as little as $5,000 or $10,000 or as much as
$20,000 or there are some policies on the market that have NO stop loss dollar
amount.)
4. What is your maximum out of
pocket expense per year? (e.g. All deductibles plus all coinsurance percentages
plus all applicable access fees or other fees)
5. What is the Lifetime maximum
benefit the insurance company will pay if you become seriously ill and does
your plan have any "per illness" maximums or caps? (e.g. Some plans
may have a $5 million lifetime maximum, but may have a maximum benefit cap of
$100,000 per illness. This means that you would have to develop many separate
and unrelated life-threatening illnesses costing $100,000 or less to qualify
for $5 million of lifetime coverage.)
6. Is your plan a schedule plan, in
that it only pays a certain amount for a specific list of procedures? (e.g.,
Mega Life & Health & Midwest National Life, endorsed by the National
Association of the Self-Employed, N.A.S.E. is known for endorsing schedule
plans) 7. Does your plan have doctor co-pays and are you limited to a certain
number of doctor co-pay visits per year? (e.g. Many plans have a limit of how
many times you go to the doctor per year for a co-pay and, quite often the
limit is 2-4 visits.)
8. Does your plan offer prescription
drug coverage and if it does, do you pay a co-pay for your prescriptions or do
you have to meet a separate drug deductible before you receive any benefits
and/or do you just have a discount prescription card only? (e.g. Some plans
offer you prescription benefits right away, other plans require that you pay a
separate drug deductible before you can receive prescription medication for a
co-pay. Today, many plans offer no co-pay options and only provide you with a
discount prescription card that gives you a 10-20% discount on all prescription
medications).
9. Does your plan have any reduction
in benefits for organ transplants and if so, what is the maximum your plan will
pay if you need an organ transplant? (e.g. Some plans only pay a $100,000
maximum benefit for organ transplants for a procedure that actually costs
$350-$500K and this $100,000 maximum may also include reimbursement for
expensive anti-rejection medications that must be taken after a transplant. If
this is the case, you will often have to pay for all anti-rejection medications
out of pocket).
10. Do you have to pay a separate
deductible or "access fee" for each hospital admission or for each
emergency room visit? (e.g. Some plans, like the Assurant Health's
"CoreMed" plan have a separate $750 hospital admission fee that you
pay for the first 3 days you are in the hospital. This fee is in addition to
your plan deductible. Also, many plans have benefit "caps" or
"access fees" for out-patient services, such as, physical therapy,
speech therapy, chemotherapy, radiation therapy, etc. Benefit "caps"
could be as little as $500 for each out-patient treatment, leaving you a bill
for the remaining balance. Access fees are additional fees that you pay per
treatment. For example, for each outpatient chemotherapy treatment, you may be
required to pay a $250 "access fee" per treatment. So for 40
chemotherapy treatments, you would have to pay 40 x $250 = $10,000. Again,
these fees would be charged in addition to your plan deductible).
Now that you've read through the
list of questions that I ask a prospective health insurance client, ask
yourself how many questions you were able to answer. If you couldn't answer all
ten questions don't be discouraged. That doesn't mean that you are not a smart
consumer. It may just mean that you dealt with a "bad" insurance
agent. So how could you tell if you dealt with a "bad" insurance agent?
Because a "great" insurance agent would have taken the time to help
you really understand your insurance benefits. A "great" agent spends
time asking YOU questions so s/he can understand your insurance needs. A
"great" agent recommends health plans based on all four variables;
wants, needs, risk and price. A "great" agent gives you enough
information to weigh all of your options so you can make an informed purchasing
decision. And lastly, a "great" agent looks out for YOUR best interest
and NOT the best interest of the insurance company.
So how do you know if you have a
"great" agent? Easy, if you were able to answer all 10 questions
without looking at your health insurance policy, you have a "great"
agent. If you were able to answer the majority of questions, you may have a
"good" agent. However, if you were only able to answer a few
questions, chances are you have a "bad" agent. Insurance agents are
no different than any other professional. There are some insurance agents that
really care about the clients they work with, and there are other agents that
avoid answering questions and duck client phone calls when a message is left
about unpaid claims or skyrocketing health insurance rates.
Remember, your health insurance
purchase is just as important as purchasing a house or a car, if not more
important. So don't be afraid to ask your insurance agent a lot of questions to
make sure that you understand what your health plan does and does not cover. If
you don't feel comfortable with the type of coverage that your agent suggests
or if you think the price is too high, ask your agent if s/he can select a
comparable plan so you can make a side by side comparison before you purchase.
And, most importantly, read all of the "fine print" in your health
plan brochure and when you receive your policy, take the time to read through
your policy during your 10-day free look period.
If you can't understand something,
or aren't quite sure what the asterisk (*) next to the benefit description
really means in terms of your coverage, call your agent or contact the
insurance company to ask for further clarification.
Furthermore, take the time to
perform your own due diligence. For example, if you research MEGA Life and
Health or the Midwest National Life insurance company, endorsed by the National
Association for the Self Employed (NASE), you will find that there have been 14
class action lawsuits brought against these companies since 1995. So ask
yourself, "Is this a company that I would trust to pay my health insurance
claims?
Additionally, find out if your agent
is a "captive" agent or an insurance "broker."
"Captive" agents can only offer ONE insurance company's
products." Independent" agents or insurance "brokers" can
offer you a variety of different insurance plans from many different insurance
companies. A "captive" agent may recommend a health plan that doesn't
exactly meet your needs because that is the only plan s/he can sell. An
"independent" agent or insurance "broker" can usually offer
you a variety of different insurance products from many quality carriers and
can often customize a plan to meet your specific insurance needs and budget.
Over the years, I have developed strong, trusting relationships with my clients because of my insurance expertise and the level of personal service that I provide. This is one of the primary reasons that I do not recommend buying health insurance on the Internet. In my opinion, there are too many variables that Internet insurance buyers do not often take into consideration. I am a firm believer that a health insurance purchase requires the level of expertise and personal attention that only an insurance professional can provide planos de saúde. And, since it does not cost a penny more to purchase your health insurance through an agent or broker, my advice would be to use eBay and Amazon for your less important purchases and to use a knowledgeable, ethical and reputable independent agent or broker for one of the most important purchases you will ever make....your health insurance policy.
Lastly, if you have any concerns
about an insurance company, contact your state's Department of Insurance BEFORE
you buy your policy. Your state's Department of Insurance can tell you if the
insurance company is registered in your state and can also tell you if there
have been any complaints against that company that have been filed by policy
holders. If you suspect that your agent is trying to sell you a fraudulent
insurance policy, (e.g. you have to become a member of a union to qualify for
coverage) or isn't being honest with you, your state's Department of Insurance
can also check to see if your agent is licensed and whether or not there has
ever been any disciplinary action previously taken against that agent.
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