Eleven Tips on Buying Health Insurance

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 When comparing health insurance companies, ask the following questions: 

1. What are the “lifetime limits” and the “per incident” or annual maximums? For example, some policies have a $5 million lifetime limit, but will pay only up to $100,000 annually.

2. Does the insurer use usual, customary, and “reasonable” as criteria for paying claims? (Reasonable means the insurer will decide what it will and will not pay of its portion of the co-pay, leaving you little recourse for costs you thought the insurer was supposed to pay.)

3. What are some of the policy’s internal limits? Organ transplants often are limited to a maximum pay out of $250,000 (after a twenty-four-month wait). Physical therapy will often times have very low limits. These internal limits identify the maximum the policy will pay for certain procedures regardless of per incident and lifetime maximums. The per incident or annual max becomes meaningful when realizing transplant costs can be around $350,000, plus the surgeons’ charges.

4. What are the policy’s exclusions and limitations? If the insurer does not make this information openly available before you buy, beware.

5. What is the maximum out of pocket expense, often called a “Stop Loss” or “Co-Insurance Maximum”? (This information should also be openly listed. Some policies have no stop loss.)

6. Does the policy cover you and all the insured both off and on the job? Sole proprietors and some “S” corps are exempt from having to carry workers comp. Many insurance companies will not cover you or your spouse on the job.

7. Is pre-authorization required for any medical services? This could postpone treatment of a medical condition that may need immediate attention.

8. Does the policy cover the insured outside your home state and outside the U.S.?

9. Is your rep advising you on how Health Reimbursement Arrangement (HRA) works and the tax benefits potentially available to you?

10. How extensive is the policy’s network? Is it just in the state, or does it extend across the country and out of the country as well?

11. Who has the right of renewal? You could lose coverage if it is not you.


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