How Do I Know If My Health Insurance Meets My Needs?


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The post below is from last February.  It had some valuable advice at that time.  Although things will change in 2014, the advice it gives is still applicable for 2013.  You are still free to pick what types of health insurance you want for another year.

Perhaps the biggest problem with health insurance is that people often do not know what they are (or are not) paying for until it is too late.

As an insurance agent, I see this happen way too frequently.  When people buy health insurance, they often only look at prices.  Rarely do they take the time to see the hidden costs to them.

During the Health Care Reform debates, the politicians made a big “to-do” over this problem.  They promised that if Obamacare became law, they would make it easier for Americans to understand their health insurance policies.

WHAT THE LAW INSTRUCTED

In the PPACA, the Secretary of Health and Human Services was instructed to provide a more simple comparison template for every insurance company to use.  This comparison tool was supposed to be implemented by March 23, 2010.

WHAT ACTUALLY WAS DONE

Unfortunately, our current Secretary of Health and Human Services was so busy with other things that she delayed getting that document out in time.  The comparison tool will be implemented by the insurance industry on September 23, 2012.

According to the PPACA, all applicants who purchase individual health insurance are required to get a copy of this new comparison tool at the time they complete an application.  Every employee who gets their health insurance through work is required to get a copy of this form every year during their election period.

The PPACA requires that the comparison tool be simple to understand.  It can  be no longer than 8 pages.  Here is a link to a sample of the 8 page Summary that the Department of Health and Human Services has decided will make shopping for health insurance simpler.

If you do not speak “Insurancese” you might also need the 4 page Glossary.

I like the idea of having a standardized form to help people compare health insurance while they shop.  I just am not convinced that Americans will read these 12 new pages.

(Since this post was originally published the SBC form has been finalized.  Your insurance company should supply you with a copy very soon after you have submitted your application.  You also have the right to call your insurance company and ask them to send you a copy.)

WHY IT IS IMPORTANT

The reason people buy Major Medical insurance in the first place is to pay for medical care when they get sick.  Some people want insurance to pay for every little boo-boo they get.  Others only want insurance to pay when they need medical care for something big like a cancer or accidental injury.

Comparison Summaries, like the one mandated by the PPACA, may eventually be useful.  However, they will not replace your need to read your policy once it has been issued.  If a change or mistake occurs during underwriting and you are issued a plan that is different from the one for which you applied, it is up to you to catch the alteration after you have gotten your policy.

Your insurance company will make the required correction or explain any waivers or riders that were added during underwriting if you point them out within 10 days of getting your policy.

If you do not discover any changes until there is a medical issue, it will be too late in many cases.  Insurance policies are “contracts of adhesion.”  That is a fancy way to say that the official contract is drawn up by the insurance company and sent to you.  If you do not complain within a specified period of time (normally 10 days), the insurance company has the right to assume that the contract was satisfactory and you “adhered” (agreed) to it.

Once a cancerous tumor has been diagnosed, it is too late to change your deductible or co-insurance.  You are stuck with any limitations or exclusions that are in your policy.

WHAT YOU CAN DO IF YOU FIND A PROBLEM

The best time to address any shortcomings that are in your health insurance is during the underwriting process or within 10 days of getting your policy.

If you did not read your policy to make certain it was satisfactory when you first got it, there are some voluntary supplements that you can get to help you supplement your health insurance portfolio.  Many employers offer voluntary benefits (Long Term Care, Disability Insurance, Critical Illness Insurance, Accident Supplement, Dental Insurance) through payroll deduction.  Ask your employer if such a plan is offered.

If you are not able to get supplemental health insurance at work, you have two options.

  1. Set up a voluntary plan at work with your employer’s permission.
  2. Purchase supplementary health insurance on an individual basis.

If you need help supplementing your major medical health insurance, contact The Insurance Barn

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