The Basics Of Individual Health Insurance

Historically, most full-time American workers got great health insurance through an employer-based health plan. Very often, this coverage was a benefit that they did not have to contribute to. Those who didn’t work full-time bought it themselves directly from an insurance company.

Times have certainly changed! In the economic upheaval that Americans have been facing since 2007, many people have lost their jobs and with that loss came the loss of health insurance. Some of the lucky ones are fortunate to be able to afford individual health insurance. For the millions of Americans who are not so fortunate, individual health insurance is just unaffordable as families struggle to pay their mortgages and feed their kids. These families pray that no catastrophic illness comes their way as they wait for the situation to improve.

If you do have to buy health insurance on your own, there are many kinds of private health insurance policies for sale, although not all offer the same benefits if you were to become ill. Call an agent who represents some of the more widely known health insurance carriers, such as Blue Cross Blue Shield, Aetna, Wellpath Coventry, United, Kaiser, etc. Have them send you a few different plans that you can study. They all have the same information on their computers, so there is not need to call them all.

As with any product, the cheapest policy is not always the best. You must read the fine print. Make a list of questions to ask and ASK THEM! You must compare apples to apples… not apples to oranges. When you compare different products, make sure you understand how they are alike and how they are different. Be thinking for five years down the road, not just for today. Today you may be single and not require maternity care, but you may be married in 2 years and ready to soon start a family. Make sure you will be able to add such coverage as needed.

The most obvious feature of any policy is the premium – the amount you pay (usually monthly) to an insurance company for your health insurance policy. The premium will vary depending on the policy you purchase. This variance comes from having either a higher or lower deductible – the amount of money you will need to spend out-of-pocket before your insurance policy starts covering your expenses. Be sure you can afford the monthly premium. Be sure you can afford the deductible. If the premium is more than you can afford, you can often reduce that premium by raising the deductible. Keep in mind, however, that there is a direct trade off between how much you pay for health insurance and the extent of the covered benefits. As you weigh this trade off, remember that buying the policy with the cheapest premium or with a very high out-of-pocket maximum may leave many services and treatments uncovered. This could leave you vulnerable to high medical bills if you were to become ill.

If you decide to cancel a policy, that can be done and once you have notified the company in their prescribed format, you will usually receive a pro-rated pre-paid premium refunded to you. NEVER cancel one policy until you have another one lined up and ready to go. Life is full of surprises. And you certainly don’t want to receive such a surprise when you are without health insurance.

Some Benefits to ask about:

How much will you need to pay out of pocket before the insurance coverage begins (deductible)? What services will you be responsible for after you pay the deductible?

What percentage of the bills will you be responsible for paying? What percentage will the insurance company pay?

What are the co-pays you will be responisble for?

How much will you be responsible for paying if you become ill (the out-of-pocket maximum)?
Is your policy still good if you move to another state?
Will your policy cover you if you are traveling within the U.S.? Outside the U.S.?
At what age will it drop coverage on your dependents?
Will it cover an adopted child?
Is the plan a PPO- Preferred Provider Organization?
Is the plan an HMO – Health Maintenance Organization?
What are the penalties for canceling a policy?
What is the drug coverage? ( generic vs non-generic vs formulary)
What out-patient services will it cover?
What in-patient services will it cover?
Will it cover psychological/psychiatric services?
Will it cover maternity services?
Will it cover emergency room services?
Will it cover surgical services (in & out patient)?
Will it cover hospice care?
Will it cover blood services?
Will it cover ambulance services?
Will it cover durable and non-durable medical equipment?
Will it cover vision care?  Dental care?
Will it cover chiropractic care? Podiatric care?
Will it cover physical/occupational/speech/recreational or other therapies?
Will it cover home health care?
Will it cover you to be part of a research study?
Will it cover you for FDA unapproved drugs?
Will it cover you for experimental drugs or treatments?

Will it cover you for transplants?

 

People often say that they just can’t afford to have health insurance. But the real question is how can you afford not to have insurance? One catastrophic illness can wipe out the assets of an uninsured family.

 

Anecdotes:

My 52 year old Maureen was not feeling well for a few days. She thought she had the flu. When she realized she was having difficulty breathing, she went to the emergency room. Once tests were run, she was hit with some pretty shocking news. A virus had attacked her heart leaving her with only 10% of her normal cardiac function. She was immediately placed on a heart transplant list. Maureen was in-between jobs and her COBRA health insurance had recently expired. The heart center that she was referred to would not accept her without insurance and she had to show that she had a million dollars in cash before such admission. Fortunately for Maureen, a gazillion prayers and an experimental trial with miracle drugs gave her back 35% of her heart function and she was taken off the transplant list. She is alive today to enjoy her grandchildren. One can only imagine what would have happened to her had she not enjoyed the recovery she did. There was no way that she was going to be able to raise one million dollars. Do not let your health insurance lapse if you can help it.

My son was paying for his own individual Blue Cross Blue Shield health insurance plan. When he turned 29 in April of 2010, his premiums increased from $200 per month to $245 per month. He was furious. He wasn’t working and the premium was becoming unaffordable to him. We advised him to lower his monthly premium payment by switching to a higher deductible. We felt that we were in a position to pay for his deductible in the event of a catastrophic occurrence or illness. By raising his deductible from $2500 to $5000, his monthly premiums went down to $180… a savings to him of $65 per month in out-of-pocket expenses. In 2012, my son had a 30 minute abdominal-pelvic CT Scan with and without contrast. Before Blue Cross Blue Shield did their price adjustment, the bill was in excess of $6,600! His out-of-pocket portion of that bill was $3,500! That cost did not include the $350 charge for the radiologist to read the scan.

Comments are closed