Recent legislation means there will likely be an increase in the number of people shopping for health insurance. Insurance companies are sure to compete fiercely for their share of this new market by offering some very attractive packages. Health insurance is a complex contract put together by company lawyers focused upon maximizing profits. Many insurance companies do have compassion and respect for patients and operate with positive customer service attitudes. On the other hand, there are some companies that make claims of service or promises they have no intention of keeping. This article will try to expose some of the pitfalls the shopper might encounter when buying individual health insurance.
In a supermarket, shoppers expect to see products in a range of prices. There will be nationally known brands and there will often be store brands or “generic” un-branded products at lower prices. The differences in the products are often subtle enough to make the lower priced store brands attractive to many shoppers. Health insurance, in spite of being priced higher than a can of corn, has similar options. Before a buyer decides on the lower priced policy he should know what the insurance company has done to bring the price down.
The most effective cost control was based on finding and avoiding those patients who were expensive to cover. The horror stories about insurance companies dropping people who were diagnosed with expensive-to-treat conditions are common. Persons who had pre-existing chronic conditions were regularly refused coverage. Smokers, overweight people and those diagnosed with depression were routinely denied. These practices vividly demonstrate the lack of compassion that most insurance companies operate with.
Another common and effective tool for insurance companies to manage costs is to use health maintenance or preferred provider organizations. These tools are actually effective at reducing costs and can benefit the consumer. The problems with HMOs and PPOs arise when the insurance company contracts with sub-standard providers or providers out of the patient’s area. Before choosing an insurer, the shopper should investigate the approved providers and the extra costs of using providers outside of the insurance company’s network.
Just as auto insurance companies offer many types of coverage with different deductibles and coverage limits so do health insurance companies. Health insurance has even more options and variations than auto insurance. If a standard coverage level is established to meet the government requirement, the insurance shopper must be sure the policy bough meets the standard. Deductibles, co-pays, coverage limits and several other factors are part of any health insurance contract. It is the buyer’s responsibility to know what he is paying for.
The intent of the government plan is to spread the cost of insurance over a larger population. In the past very few young people paid for personal health insurance. Young healthy people have little need of insurance. As people get older they tend to need medical care more often and the care they need can be expensive. The cost of health insurance is driven in part by the ratio of older people to younger people. With young, healthy people being required to purchase insurance the young people’s premiums are expected to reduce the premiums for everyone. Any insurance company’s profits are also influenced by the ruthlessness the company uses when paying claims.
The growing health insurance market is certain to bring out new insurance companies with varying degrees of integrity. Buyers must be cautious and suspicious of new companies making outrageous claims or having super-low rates. Aggressive companies can find hundreds of obscure ways to deny payments and a buyer might find himself paying for an essentially worthless policy.
Try to get a written copy of the policy and read it before making a commitment. Do some online research into a company’s reputation for paying claims or denying coverage. Research will help the shopper make informed decisions before buying individual health insurance.
In the past few months, the discussion of where and how to purchase individual health insurance plans has been in the news. Buying individual health insurance is one way to acquire medical and drug insurance coverage.
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