Individual Health Insurance
Individual health insurance should always be explored as a viable alternative to COBRA, COBRA Conversion, HIPAA or State High Risk Insurance policies. While the process of buying health insurance is time consuming and complicated, you may be surprised to discover that individual health insurance can be an affordable alternative. Individual health plans may also cover some pre-existing conditions either immediately (perhaps with an increase in premium called "Uprating" by the insurance industry) or after a certain period of time. There are a number of good resources to use in your search:
Online
A good place to start your research is online. For a quick comparison of policies, try www.ehealthinsurance.com or www.extendone.com which provide quotes from many different carriers. There are other sites available but a good site should not ask you for contact information until you have seen quotes and are ready to select a policy.
Insurance Companies
Contacting an insurance company directly may also be a good alternative, especially if you have not had very many claims and would like to stay with the same company that you had while you were insured through an employer. They will know your claim history and may give you a better rate than an insurance carrier that has had no experience with you.
Insurance Brokers/Agents
If you have a pre-existing condition, the best choice may be getting your insurance through a broker. A broker charges exactly the same as you are charged online or directly with an insurance company. Insurance companies consider different criteria when underwriting your policy. One company may insure you while another may not. An experienced insurance agent will help you shop around for coverage that will cover your pre-existing condition without damaging your ability to apply with other companies. (Note that insurance companies share information about your medical history with an organization known as The Medical Information Bureau (MIB). A denial from one insurance company will therefore make it more likely that other insurance companies will deny you too. Current pending legislation may however, eliminate pre-existing conditions as a reason for denial)
The following eight questions can help you compare policies and help you find the coverage that is right for you and your family.
1) What type of plans are available and how are they different?
HMO - Health Maintenance Organization - An HMO is a group of medical providers that provide service to members for a flat fee. Most HMOs are fairly restrictive. Typically, you can only see providers who are members of the HMO and you must see your assigned or chosen primary care doctor first to get a referral to a specialist. In exchange for these restrictions, premiums are generally lower and members pay less out of pocket expenses.
PPO - Preferred Provider Organizations - A PPO is a network of private, independent providers that supply their services at contracted fixed or discounted rates. PPOs are generally more expensive, have higher out of pocket costs than an HMO but allow you the flexibility of going to a specialist without a referral. PPO members may also choose out of network providers by paying a higher percentage of the charges.
POS - Point of Service Plans - A POS plan is a hybrid of PPO and HMO plans. It offers some of the cost savings of an HMO by requiring you to have a primary physician but allows you to see specialist outside of the network with a referral. Generally, payments for services outside of the network only receive partial reimbursement and you are responsible for the paperwork.
2) Do Doctor's visits come with copays or are they only discounted?
Traditional low deductible insurance plans generally have co-pays for doctor's visits ranging from $10 to $40 dollars. The number of visits at this fixed co-pay amount may be limited. Additional visits may be charged at a higher rate. Before choosing a plan, assess the number of visits you would expect when calculating your costs. While predicting future visits may be difficult to do, looking back at previous years may give you a general idea.
When considering a plan that only offers a discount for doctor visits and no co-pay option, check with your physician to determine how much you will pay. Discounts typically run 30 to 50 percent off a doctor's standard fee.
3) Does Prescriptions coverage come with copays or are they only discounted?
Health plans that offer prescription coverage generally break down their coverage into three categories: generic, formulary brand and nonformularly. Typical charges might be $10 for generics, $20 for formulary brand and $30 for nonformulary. Check with your insurance company or look at their website to determine which works best for you.
If you decide not to purchase prescription coverage, there are a number of prescription discount cards that offer small discounts on brand name prescriptions and large discounts off generics. Walmart and other supermarkets also have a number of prescriptions at highly discounted rates.
4) What is the Annual Deductible?
Your annual deductible is the amount have to pay for medical expenses before your insurance company starts paying for your claims. High deductible plans generally have you pay for all of your medical expenses up to a certain amount ($1000 to $10,000) before your insurers begins paying (often at 100%).
Low deductible plans have a lower threshold before your insurer begins paying for your medical expenses but may only pay at certain percentage of the cost (also known as co- insurance) leaving you to pay the remainder (typically 20 or 30%) It is important to note that doctor and prescription co-pays do not go toward meeting your annual deductible.
Online
A good place to start your research is online. For a quick comparison of policies, try www.ehealthinsurance.com or www.extendone.com which provide quotes from many different carriers. There are other sites available but a good site should not ask you for contact information until you have seen quotes and are ready to select a policy.
Insurance Companies
Contacting an insurance company directly may also be a good alternative, especially if you have not had very many claims and would like to stay with the same company that you had while you were insured through an employer. They will know your claim history and may give you a better rate than an insurance carrier that has had no experience with you.
Insurance Brokers/Agents
If you have a pre-existing condition, the best choice may be getting your insurance through a broker. A broker charges exactly the same as you are charged online or directly with an insurance company. Insurance companies consider different criteria when underwriting your policy. One company may insure you while another may not. An experienced insurance agent will help you shop around for coverage that will cover your pre-existing condition without damaging your ability to apply with other companies. (Note that insurance companies share information about your medical history with an organization known as The Medical Information Bureau (MIB). A denial from one insurance company will therefore make it more likely that other insurance companies will deny you too. Current pending legislation may however, eliminate pre-existing conditions as a reason for denial)
The following eight questions can help you compare policies and help you find the coverage that is right for you and your family.
1) What type of plans are available and how are they different?
HMO - Health Maintenance Organization - An HMO is a group of medical providers that provide service to members for a flat fee. Most HMOs are fairly restrictive. Typically, you can only see providers who are members of the HMO and you must see your assigned or chosen primary care doctor first to get a referral to a specialist. In exchange for these restrictions, premiums are generally lower and members pay less out of pocket expenses.
PPO - Preferred Provider Organizations - A PPO is a network of private, independent providers that supply their services at contracted fixed or discounted rates. PPOs are generally more expensive, have higher out of pocket costs than an HMO but allow you the flexibility of going to a specialist without a referral. PPO members may also choose out of network providers by paying a higher percentage of the charges.
POS - Point of Service Plans - A POS plan is a hybrid of PPO and HMO plans. It offers some of the cost savings of an HMO by requiring you to have a primary physician but allows you to see specialist outside of the network with a referral. Generally, payments for services outside of the network only receive partial reimbursement and you are responsible for the paperwork.
2) Do Doctor's visits come with copays or are they only discounted?
Traditional low deductible insurance plans generally have co-pays for doctor's visits ranging from $10 to $40 dollars. The number of visits at this fixed co-pay amount may be limited. Additional visits may be charged at a higher rate. Before choosing a plan, assess the number of visits you would expect when calculating your costs. While predicting future visits may be difficult to do, looking back at previous years may give you a general idea.
When considering a plan that only offers a discount for doctor visits and no co-pay option, check with your physician to determine how much you will pay. Discounts typically run 30 to 50 percent off a doctor's standard fee.
3) Does Prescriptions coverage come with copays or are they only discounted?
Health plans that offer prescription coverage generally break down their coverage into three categories: generic, formulary brand and nonformularly. Typical charges might be $10 for generics, $20 for formulary brand and $30 for nonformulary. Check with your insurance company or look at their website to determine which works best for you.
If you decide not to purchase prescription coverage, there are a number of prescription discount cards that offer small discounts on brand name prescriptions and large discounts off generics. Walmart and other supermarkets also have a number of prescriptions at highly discounted rates.
4) What is the Annual Deductible?
Your annual deductible is the amount have to pay for medical expenses before your insurance company starts paying for your claims. High deductible plans generally have you pay for all of your medical expenses up to a certain amount ($1000 to $10,000) before your insurers begins paying (often at 100%).
Low deductible plans have a lower threshold before your insurer begins paying for your medical expenses but may only pay at certain percentage of the cost (also known as co- insurance) leaving you to pay the remainder (typically 20 or 30%) It is important to note that doctor and prescription co-pays do not go toward meeting your annual deductible.
5) What is the Maximum Annual Out of Pocket
Your maximum out of pocket is your coinsurance plus your deductible which is the maximum amount your insurer expects you to pay annually. While some high deductible plans do not have co-insurance obligations once you have reached your annual deductible, most traditional plans do. When budgeting for your annual health expenses, set aside money to cover this amount.
6) What is the monthly premium?
Your premium is the amount of money you pay monthly or quarterly for your coverage. Many plans now require automatic payment set-up from your checking account.
7) What is Lifetime maximum coverage?
Lifetime maximum coverage is the maximum benefit your insurer will pay over the lifetime of your policy. Some states require policies to have a minimum amount of at least $5 million per person. Other states only require $1 million. While a million dollars may seem like a large sum of money, kidney dialysis could wipe that out in less than a decade. Current pending healthcare reform legislation may eliminate these lifetime limits.
8) Is the the plan Health Savings Account Qualified?
Health Savings Accounts allow you to put away tax free money for your medical expenses. 2009 contribution limits are $3000 for an individual or $5,950 for a family. These funds can be used to pay medical expenses that meet federal qualifications. Unused money can be rolled over annually. High deductible insurance plans clearly marked as “HSA qualified are required to participate.
While the questions above will help you better estimate your medical costs, choosing a health plan that is right for you can be a complicated process. In addition to cost, you will want to make sure that your medical providers are covered by your health plan.
For specific advice, reach out to an insurance agent that specializes in healthcare coverage. A good resource to find an agent is the National Association of Healthcare Underwriters. A good ebook that covers a lot of the same information can be found at the Health Advocate Webite.
