5 Basic Facts About Purchasing Health Insurance Policies In A Bad Economy

If you are buying health insurance in today’s poor economic climate then here are 5 five things that you need to look out for.

1. Does your plan give you cover both at work and away from your job?

Many health insurance policies have specific exclusion clauses which wipe out your benefits for anything that could have been covered by Workers Compensation or a similar law. Now stop and read that last sentence again and pay special attention to the words ‘could have been covered’. That’s correct, most self employed people and even some small business owners don’t carry Workers Compensation on themselves.

There are insurance plans which will cover you on and off the job 24 hours a day, as long as you are not required by law to have Workers Compensation coverage.

2. Are you writing off your insurance premiums?

Independent contractors (1099’s), home based business owners, professionals and many self employed individuals do not take advantage of the current tax laws.

Many people who are paying 100% of their own costs are permitted to deduct their monthly insurance premiums. Just that alone can lower your out-of-pocket costs by as much as 40%. Ask your accountant if you are eligible or check out the IRS website for more information.

3. Look closely at any policy’s internal limits

All health insurance plans have some form of internal controls which are used to determine how much they will pay out for a specific service or procedure. There are two basic methods which are used:

A. Scheduled Benefits

Many plans, some of which are specifically marketed to indpendent and self employed people, have a clear schedule of how much the insurance company will pay per visit to the doctor, hospital stay or even what limits are placed on payments for testing within a 24 hour period. This sort of structure is generally associated with ‘Indemnity policies’. If you are offered one of these plans be sure to see the schedule of benefits in writing. It is important that you understand these type of limits up front because once they have been reached the insurer will not pay anything above the stated amount.

B. Usual and Customary Expenses

‘Usual and Customary’ refers to the payment for a doctor office visit, procedure or hospital stay that is based upon what most doctors and facilities charge for a particular service in that geographical or comparable area. ‘Usual and Customary’ charges also represnt the highest coverage on almost all major medical plans.

4. Do not forget that you can shop around

If you are reading this there is a fair chance that you are shopping for a health plan.

Each day people shop for everything from food to a new house and while shopping value, price, personal needs and general market conditions are evaluated by the buyer. Bearing this in mind, it is very disconcerting that most people never ask how much a procedure, test or even doctor visit cost. In today’s ever changing health insurance market it will become more and more important for for people to ask these questions. Asking about price will help you get the most out of your plan and reduce your out-of-pocket expenses.

5. Be aware of networks and discounts

Nearly all insurance firms work closely with medical networks in order to access discounted rates. In broad terms, networks are made up of of medical professionals and facilities who agree to charge discounted rates for services provided. In most cases the network forms one of the defining properties of your program. Discounts will generally vary from 10% to 60% or more.

Medical network discounts do vary but to make sure that you minimize your out-of-pocket expenses, it is vital that you preview the network’s list of physicians and facilities before committing yourself to a policy. This is not only to make sure that your local hospital and doctors are in the network, but also to see what your choices would be if you were to need referral to a specialist.

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