Don’t choose your health policy based on price alone!

By: Tim Lom, Health and Life Insurance Agent, Licensed in 30 States

During this time of Crisis, a lot of people are doing a personal policy review to make sure they have proper Health coverage and Life coverage in case they will have to use it!  I will help you look at your health coverage from a perspective of balancing your needs and your budget.

Health Insurance is expensive, and you want to be covered/protected from those large bills from a catastrophic event and you also want it to cover your well-care and minor sickness and injuries.  But to have a plan that covers everything really well, is REALLY expensive, so most people opt to find a plan that is cheaper.  But cheaper is not always better!  You need to find a compromise in cost, coverage, and your financial exposure (max-out-of-pocket).  In the end, you typically can afford to pay some toward your minor sickness and injury and your well-care, but you cannot afford paying for that catastrophic event.  So, you should be concentrating on the max out of pocket on a plan to make sure you are protected.

Some people get hung up on deductibles and copays, though they may be important, in my opinion the Max-out-of-pocket number is the most important number besides your premium cost.  It is important to have a plan that has a true max out of pocket number so no matter what the bill is, you will only owe $X.  X can be $3K or $20K depending on what you want or can afford, but when you need $1M in Chemo, you will only owe that max out of pocket number and the insurance company will pay the rest.  There are a lot of cheap plans out there that are not protecting you properly and it is human nature to make decisions on price alone and that is the wrong way to look at it.

Potential bad coverage plans (in my opinion):  There are plans out there that are short term that will auto renew.  So people think that if they auto renew, they are safe, but if they have something catastrophic happen that requires ongoing treatments or procedures etc., when the plan renews, that catastrophic event is considered pre-existing and will not be covered in the next term.  So, it may be cheap, but you may be stuck paying for $900K in Chemo or surgeries.

Other bad plans say they pay for everything, but if you read the fine print, they don’t truly have a max out of pocket.  The max out of pocket is limited by what they are willing to pay for specific procedures.  For instance, the max yearly coverage is $500,000.  But the max they will pay out for a heart attack is $15K when the actual cost of a heart attack is $50K or $150K.  So, you are on the hook for the remaining cost.  Or say you accidently took too much Tylenol (acetaminophen) and you damaged your liver (this happens more than you think) and you need a new liver.  That will cost you about $350K but your plan has a maximum payout of $40K for a liver transplant, so you will owe the remaining $310K.  So, you see, you likely cannot get enough procedures to get even close to that $500K max that the plan has available, and you are way under insured leaving your financial exposure way too high!  And there are many other types of bad plans and variations like the plans above.

The best way to compare plans is first to see what you qualify for, and then what are the premiums and expected out of pocket if you stay at your current level of health.  Also, what is the premiums and the out of pocket costs if something bad happens to you.  Now compare the different plans in this way and you will see what plan is cheaper and better.  You cannot just look at the premiums, you have to consider all the costs!  This is what I do for my clients and would like to do for you.  With few exceptions, you can opt out of your current plan at any time of year and jump on a better plan.  One exception may be a group plan.  If in a group plan you may have to wait till your open enrollment to opt out.  And I can go over that with you in more detail.

Having an Agent to discuss your situation and help you choose a plan that fits your needs and your budget is valuable.  Also, having an Agent you can call on when you really need to use your insurance and have them re-explain it to you because you have forgotten all that you were told when you purchased the plan is also valuable.  That is where I come in…

I help individuals, families, 1099 workers, and small business owners save potentially thousands on their premiums with better coverage.  Call Tim the Health Insurance-Guy at 404-825-6971 and let me help you!