5 Things To Consider When Taking Out Health Insurance Plans In A Poor Economy

If you are looking to purchase health insurance in today’s poor economy then here are 5 five things that you need to watch out for.

1. Will your policy provide you with cover both at work and away from your job?

Many health insurance policies have specific exclusions that eliminate your benefits for anything that could have been covered by Workers Compensation or a similar law. Now take a moment to read that last sentence once again and pay close attention to the phrase ‘could have been covered’. That is correct, most self employed individuals and even a few small business owners don’t carry Workers Comp on themselves.

There are insurance policies that provide cover on and off the job 24 hours a day, as long as the law doesn not require you to have Workers Compensation coverage.

2. Are you writing off your insurance premiums?

Home based business owners, independent contractors (1099′s), professionals and a lot of self employed people do not take advantage of the current tax laws.

Many people who are paying all of their own costs are entitled to deduct their monthly insurance premiums. This by itself can reduce your net out-of-pocket costs by up to 40%. Ask your accountant if you are eligible or check out the IRS website for more information.

3. Look closely at a policy’s internal limits

All insurance policies have some sort of internal controls which determine how much the company is prepared to pay out for a particular procedure or service. There are two basic methods which are used:

A. Scheduled Benefits

Many plans, some of which are specifically marketed to self employed and independent individuals, have a detailed schedule of how much they will pay per visit to the doctor, stay in hospital or even what payment limits are imposed for testing within a 24 hour period. This sort of structure is generally associated with ‘Indemnity plans’. If you are presented with one of these policies make sure that you see the schedule of benefits in writing. It is important that you understand these type of limits up front because once you reach them the company will not pay any expenses above the stated amount.

B. Usual and Customary Expenses

‘Usual and Customary’ refers to the rate of pay out for a doctor office visit, hospital stay or procedure that is based upon what most physicians and facilities charge for that particular service in that geographical or comparable area. ‘Usual and Customary’ charges also represnt the maximum level of coverage on most major medical plans.

4. Don’t forget that you are able to shop around

If you are reading this you are probably shopping for a health policy.

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

5. Look out for 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 contract to charge discounted rates for services rendered. In many cases the network is one of the defining properties of your program. Discounts will generally vary from 10% to 60% or even more.

Medical network discounts vary but in order to make sure that you pay the lowest out-of-pocket expenses, it is vital that you check out the network’s list of physicians and facilities before committing yourself to a plan. This is not only so that you can ensure that your local doctors and hospitals are part of the network, but also so that you can see what your options would be if you need referral to a specialist.

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