Quick Insurance Tips

Having two health insurance policies means that you will pay twice. It doesn’t mean that you will get twice the benefits. When you combine the insurance rates they may be double the rate of having one policy, however when you combine the benefits they won’t be.

You may wind up with slightly more in benefits, but the additional benefits of the second policy are unlikely to even come close to justifying the additional costs.

A medical insurance policy will typically have a provision written into the contract that greatly reduces your benefits if you have a second policy. There are exceptions. Certain types of policies, such as cancer policies, other critical illness policies and hospital indemnity policies will typically pay their full benefits even when you have other coverage.

Most companies will not issue you a policy if you say that you intend to keep your current health insurance policy inforce. This is for your protection. A second health insurance policy isn’t likely to be in your best interest.

It is better to simply get one very good policy. To find health insurance rates for Alabama or health insurance quotes for any other area in the US request private medical insurance quotes from us.

Using two health insurance policies to cover your costs will probably be much more expensive than simply using the money you would have paid on the second policy to cover your uncovered expenses.

Are zero deductible health insurance plans oversold?

There are two things that the careful consumer should know about no deductible health insurance plans. The first is that even with a zero deductible, you will probably need to pay something towards your medical care. The second is that a zero deductible health insurance plan will usually have a monthly price tag that isn’t justified by the additional benefits.

Deductibles, coinsurance and co-pays are the typical cost shares that are associated with health insurance policies. A no deductible health insurance plan will probably have coinsurance and co-pays. In fact, often zero deductible plans will have higher coinsurance and co-pays than other plans. It pays to read all the fine print before making a final decision.

Zero deductible health insurance plans are often more expensive than they are worth. You may wind up paying a lot more in monthly premiums and getting a little more in benefits. Making a careful comparison and doing some arithmetic can help you make the right decision.

No deductible health insurance plans are often much more expensive than high deductible health plans that are Health Savings Account compatible even when you factor in the added benefits.

Today most health insurance companies use provider networks for their policies.  You should know the advantages and disadvantages of plans that use provider networks.

Advantages of Health Insurance Provider Networks

The advantages of a policy with a network of doctors, hospitals and other providers are the lower cost for medical care and the lower premiums for the policy.

When you use a doctor or other provider that participates in your health insurance carrier’s provider network the provider charges less than they would if you didn’t have insurance.  The lower rate is called the “negotiated rate.” The insurance company or you will pay a rate that the carrier has negotiated with the provider.  This rate can be half of the standard price for a given service.

This means that your costs are lowered in two different ways.  First, the insurance premiums you pay for your policy will be lower than they would be for a similar policy that does not use a network.  Second, if you have to pay for the service out of your pocket because you haven’t met your deductible, you will pay the lower negotiated rate.

Disadvantage of Health Insurance Provider Networks

The disadvantage is that you will pay more for care if you choose to seek treatment from an out–of-network provider.  In some cases, you will have to pay the entire cost of care received from a doctor, hospital or other provider.  In other cases you will pay a higher percentage.

Emergency care is often an exception to this.  Your share of the bill may the same as it would be if you used a network provider if you use a non participating doctor or hospital during a medical emergency.

It is important to know how your policy covers you when you are out-of-network.  HMO plans will typically cover nothing but emergency care if you are out of network.  PPO and POS plans will typically cover some costs when you use a non-participating provider.  However, you will often have a higher deductible and/or a higher coinsurance percentage.

Special Health Insurance Network Issues

It is important to be able to have access to in-network care at all times if possible.  If you are a college student, ideally you want an insurance policy with a strong network near your parents’ home as well as near your school.  “Snow birds” and other people who have secondary residences that they spend substantial amounts of time in will have similar concerns.

Should you pay for your insurance on your credit card?  Will this make your insurance cost more or less?

Many carriers are encouraging their policy holders to pay via credit card today.  This has both pros and cons.  It may mean that you have coverage when you need it.  It may also mean that you are paying 20% extra for your policies and are getting deeper in debt.

By allowing your insurer to debit your credit card for your auto insurance or health care policy, you may keep your insurance in force longer.  This may mean that an accident or other even is covered when it might not have been. Forgetting to pay an insurance bill can cost you thousands or even millions.  There is definitely a positive side to paying for insurance via a credit card.

If you have a medical condition or have gained weight that you acquired since you purchased your health insurance policy, this can be especially important.  Missing a payment may mean that you are denied coverage or charged extra for the same coverage you had before.

Your health insurance company is not allowed to drop you because of a significant health condition or a state of obesity that you developed since your healthcare policy was approved unless you cancel your policy or allow it to lapse.  If you do so, you can be treated as if you are a new client.  This can mean that you are subjected to medical underwriting all over again.

If you are in the habit of paying your credit cards off each month before any interest is assessed, there no downside to using a credit card to pay your monthly insurance premiums.

However credit is overused today.  How would you feel if you were charged 20% more for everything you buy because of your race, gender or religion?  When we use a credit card to pay, we often pay an extra unnecessarily.

Insurance plans that will charge your credit card by default may be willing to send you a bill in the mail or bill a checking account.  If you are concerned about excess interest charges, you may want to contact your insurer about this.

What will it cost you to have a medical emergency but no medical insurance?  It can cost you everything that you have worked for.  Finding ways to reduce your medical insurance costs without eliminating coverage can mean that you get to keep your house, your credit and your health.

Health insurance can be very expensive and because of that it unfortunately isn’t an option for many people.  Some, perhaps most of those without coverage can’t avoid it.  Some who technically can afford it are forced to choose between buying health insurance and living in a safe neighborhood or sending a child to college.

If you are not in one of those categories, but are still considering going without health care coverage consider the fact that even in these recessionary times, uninsured or poorly insured sicknesses and accidents cause more people to go bankrupt and to be foreclosed upon than anything else.

There are ways to reduce your costs for health insurance without risking your financial future.  You can find plans that have similar coverage to the plan you are considering dropping that are less expensive simply by shopping around.  You may also be able to raise your deductible.  In so doing you may reduce your coverage and price without eliminating coverage entirely.

Shop for Health Insurance

Shopping around for insurance can save you a bundle.  There is often a wide variance in the price of health insurance policies that offer the same or similar coverage.  Many people fail to shop around for coverage. Many others shop once and never know that the plan that was the most competitive five years ago is one of the most expensive today.

If you need to insure a family, one of these “secret health insurance buying strategies” may help you lower your premiums.

Look at Low Cost High Deductible Health Plans

High deductible healthinsurance plans are often the best for many families.  These plans tend to be much less expensive than low deductible co-pay plans.  You will trade some coverage for the smaller things, but will probably be able to get excellent coverage for the catastrophic medical event.  You may be able to cut your costs in half with a high deductible health insurance plan.

These plans may also help you save on income taxes as well.  Owning a HDHPs or high deductible health plan can qualify you to open a health savings account.  HSA plans are similar to Individual Retirement Accounts or IRAs.

An HSA can also help you spend less on medical care.  A debit card that accesses your HSA funds will allow you to spend pre-tax dollars on medical and dental expenses, and thereby turning a $100 expense into a $72 expense for many Americans.

By shopping around and or purchasing a higher deductible health insurance policy, you can reduce your costs without risking the loss of your home and financial future.  Consider these options before considering dropping your health coverage entirely.

The risk of paying higher taxes with universal healthcare should be weighed against not just the benefit of easing of pain and suffering and extending life, but also the benefits of the tax dollars that might be generated by those who aren’t hampered by the current system.  The person who is disabled today because he couldn’t afford health care when his condition was preventable might be working today.  He might be paying taxes instead of collecting from social security if we had a universal healthcare system.  The woman who today who is shackled to her job because a family member is uninsurable in the private health insurance market might be the person who invents the next great thing.

Better Preventative Health Care May Reduce Our Costs

Although it is true that the poor have access to health care today, the access is biased towards expensive care one might need in an emergency medical situation as opposed to the relatively inexpensive care one might need to prevent that emergency situation.

There must be countless men and women who are currently out of work and on the dole who would love to be working and supporting their families.  Few of us want to be out of work.  Fewer of us want to be sick and out of work.

In many cases the disabled former tax payers had relatively minor preexisting conditions that turned into major disabling conditions.  These conditions were only allowed to become major medical conditions because the person couldn’t afford proper preventative care.  The cost of this care pales in comparison to the cost of losing a tax payer and gaining a “tax eater.”

A Lack of Health Insurance Options May Reduce Innovation

Many people are afraid to leave their jobs because they are afraid of losing their healthcare coverage and slows our economy. This fear keeps people shackled to jobs that no longer fit them.  A person who has the ability and experience to do something bigger may stay at a job because the opportunity to do something else means that they will leave their coverage behind.  This doesn’t happen in the other countries that use a universal healthcare system.

The next Bill Gates or Thomas Edison may be forced to stay in their current job because they have a daughter with Crohns disease or a genetic defect.  They are not going to take the risk of leaving their job and create the next computer innovation or light bulb.  We lose and they lose.

A major innovation isn’t necessary for this to hurt us.  Small improvements multiplied by thousands or millions of workers could be enough to turn our economy around and drive us forward.  If John is forced to stay with a company with no advancement opportunities because of health insurance issues, he can’t work at another company that can use all of his abilities and make that company great.  If the same is true for Jane and Barbara and Dave… we are losing a lot of production due to this forced underemployment that is driven by the current system.

If universal healthcare can increase the number of tax payers and reduce the number of “tax-eaters” we may find that it improves our economy.  By helping those in need we may be helping every American whether rich or poor.

Buying a zero deductible health insurance plan can mean that you pay extra for lousy coverage.  Although this isn’t always true, a zero deductible policy can have other cost shares.  Your monthly premium is likely to be higher than that of a plan with a moderate deductible.  You may also pay more in coinsurance or co-pays.

A health insurance policy that allows its policyholders to go to the doctor or hospital without any money out of their pockets will tend to be overused.  Insurance policies that are overused will cost the carrier more and therefore will cost you the consumer more.  A policy that has a zero deductible and no co-pays or other cost shares will be prohibitively expensive should an insurance company decide to offer such a healthcare policy.

If you would like to have fixed, predictable healthcare costs, the best option for you may be a high deductible health plan with a health savings account.  Believe it or not a high deductible plan may be your best zero deductible plan if your couple it with a health savings account (HSA).

An Aetna zero deductible health insurance policy offered to a Connecticut couple in their fifties might cost them $800 a month.  This plan has no deductible but it has other cost shares.  They could pay up to $7,500 in coinsurance each year.  This is in addition to any co-pays.

A high deductible health plan from Connecticut’s Anthem Blue Cross Blue Shield with a $2,500 family deductible might cost the same couple $600 a month.  If you divide the $2,500 deductible by 12 you come up with $208.33.  This means that this couple’s maximum costs when you add their cost shares and their premium together amount to about $810 a month.

For $10 more a month, they get a true zero deductible plan since this plan has no other cost shares.  But wait there’s more… if they have low or moderate medical expenses, they get to keep any of the $2,500 that they don’t spend.  There is still more… they can probably put the $2,500 into an IRA-like account and reduce their taxes.

Being creative with your health insurance policy can mean that you save significant amounts of money on your coverage.

A zero deductible health insurance policy may cost more than it is worth.  However, if you are willing to be creative and look into your options with high deductible health plans and health savings accounts, you may be able to get better coverage for the same or less money.

Optional private medical insurance benefits such as prescription insurance may or may not be worth the extra money.  A bad decision here can mean that you are paying a $100 in extra premiums and getting something less than $100 in value in return.

Prescription Insurance Comparison

There are a lot of companies offering cheap health insurance and prescription coverage.  When evaluating these insurance plans verses similar plans that don’t offer prescription coverage, look at the benefits verses the costs before making a final decision.

Often the prescription coverage will have a low annual dollar limit.  This reduces the value of this benefit.  Typically the base policy limits are in the millions on a health plans offered to individuals or to the self employed. Prescription insurance limits however are usually lower.

You will need to convert the monthly cost into an annual cost to make an easy comparison.

If your Aetna insurance prescription plan has a $5,000 limit and costs an extra $200 a month, you are spending $2400 a year in order to have the potential of receiving $5,000 in return.  In this scenario, the most you can lose by not having this coverage is $2,600.  This is the difference between the cost of the coverage and the maximum benefit you could be paid.

This also means that the insurance company would have to cover $2,400 in prescription benefits in a given year for you to benefit from buying this insurance coverage.  This $2,400 is the cost of the prescriptions after your co-pays or other cost shares are deducted from the cost of the drug.

You may benefit from getting a discounted price from your pharmacy when you have certain insurance policies, however you may get the same discount whether or not you have the prescription rider.  This discount should be factored in before making a final decision on the coverage.

However you may not need a health insurance or prescription rider to get cheap Rx. Insurance isn’t necessary to get prescription discounts. You may be able to get your generic prescription for a few dollars at Wal-Mart or one of the other pharmacies that are aggressively pushing discounted drugs.

When buying insurance or anything else, make sure that you receive a dollars worth of value for every extra dollar you spend.  The cost for prescription coverage sometimes is too high for the benefits received.  However sometimes it is a lifesaver.  It all depends on the price and the benefits.

When evaluating health insurance plans, the best way to do so is to look at the total price that you might pay when you add the monthly premiums with the costs that you might pay in deductibles, co-pays and other cost shares.  This means that often a low cost health insurance plan is often the most economical and provides the best coverage.

It can be a lot of work but the best way to evaluate health insurance plans is looking at what you would pay using three scenarios.

The first scenario should be one in which you have no medical expenses for the year.  In that scenario you would pay your monthly premium times twelve and nothing else.  Obviously in this scenario, the health insurance with the lowest monthly premium is going to be the best plan to have.

In the second scenario, you could look at how much you would pay if you had an accident or a disease that caused you to have very high expenses in your physicians office, pharmacy and hospital.  In this scenario, you would pay your monthly premiums, plus your full deductible, coinsurance, co-pays and or other cost shares.  The winner in this situation might surprise you.  Often the winner here is a moderate or a high deductible plan.

In the third scenario, you might look at what different insurance plans would cost you in a year where you had moderate expenses.  Again, add your monthly costs for the premium times twelve plus the costs of any money you would pay towards your co-pay and other cost shares.

Only after you have seen what your total cost would be in different scenarios should you decide on a health insurance policy to purchase.  The same plan is unlikely to win all of the “face offs,” however, this will give you a good idea of how much each plan really costs.

The above assumes that you have done your homework comparing companies and have excluded the “Dewy Cheatum and Howe” insurance companies.  Getting the best price will do you no good if the insurance company isn’t stable or doesn’t pay claims like it should.

Usually a low cost or moderately expensive policy is a better buy because the money you save in premiums will go a long way toward paying any medical bills that the insurance policy won’t cover.

The above strategy is the one that will help you find the best policy for your needs.  It does take more work, but you may save thousands of dollars each by doing the math to determine your overall costs in various scenarios.  The best policy may not be the one you thought it would be.

This may not technically be a secret, but it is not well known even among insurance agents.  I was an agent for almost 20 years before I discovered that the default way to insure a family wasn’t always the cheapest or best way.

My wife figured this out when she worked briefly as my assistant.  She was calculating rates for a family that needed maternity insurance and investigated some options that I would not have.

She was carrying our child and had some extra time on her hands, so she helped out in the agency.  I think that was the last time that she had extra time on her hands.  We have a very health and active child now.

What she discovered is that putting the entire family on the same policy isn’t always the lowest cost way to insure them.  The Blue Cross Blue Shield policy with maternity coverage had some extra benefits on it that the rest of the family didn’t need.  We were able to save the family $200 a month by insuring the husband and the other child on a different policy.

My wife’s discovery led me to look for other situations where a family would benefit from being on separate policies.

There is a negative that should be addressed first. In many cases if a family has separate health insurance policies, they will pay more of their medical expenses.  Typically a family can only pay two deductibles regardless of how many people have medical expenses if they are all on the same policy.  With separate policies this isn’t the case.

The main reason that buying separate policies is sometimes less expensive than purchasing one family policy is based on the way a given health insurance company calculates the rates for a particular policy series.

The rating calculation for many policies is based on the company calculating the rates for each family member as if they were to be on separate plans and then simply adding the rates together.  With those policies you will pay the same whether you insure everyone on one policy or on separate policies.  However many companies will have family rates based on the age of the younger or older spouse.  This can be an advantage for some families and a disadvantage for others.

We now help our clients take advantage of the different ways companies calculate rates.  For example Blue Cross Blue Shield in Connecticut will calculate the rates for most of their policies based on the age of the younger spouse and the number of insured family members.  This means that the 60 year old woman who marries the 29 year old man is paying the same rate that a 29 year old woman would pay if married to the same man.  This is of course to her advantage.

However since this company doesn’t have a separate rate calculation category for single parents, a 12 year old girl would also pay the same rate as the 60 year old if she were insured on a policy with her father and there are no other family members on the policy.

In most scenarios a family will get the best price by insuring everyone on the same policy. But people who meet the following criteria may find that their rates are very different with different companies:

• Families with more than two children
• Couples where the one spouse is more than 5 years older than the other
• Families needing to insure two people only where one is a child
• Families needing to insure only a child or children
• Families with children where a parent is over 50

Usually big differences in prices are a big clue that there is a corresponding difference in quality.  However that isn’t always true.  Sometimes the difference is in how the insurance company calculates the rates.  I hope that this “secret” that my wife discovered helps you save money.  It has taught me once again how smart my wife is and reminded me that there is always something new I can learn about insurance if I’m willing to listen to smart people even if they are involved in another profession.