Are you covered?

How to Shop for Insurance

Health insurance exists to protect you financially in case of major events. Make sure you purchase a comprehensive policy. Your past health history is never an indication of future events. Anyone can get involved in a car accident or be stricken with a disease. It also makes sense that as we get older more health problems are expected. If its one thing we cannot stress enough it’s to make sure you get a policy that will protect you financially against a catastrophic event.  

1) Since I’m buying an individual policy, can I be cancelled or rate increased due to claims?
No. A federal HIPAA law prevents any insurance company from raising your rates or canceling your policy due to claims or a change in health. This is not to say that health insurance companies cannot raise rates. They can raise rates based on age or for an entire class of policies. But no one can be singled out for an increase or cancellation simply because they file claims.

2) What’s the single most important piece of information I need to know before purchasing a plan?
It’s absolutely imperative that you find out the “out of pocket maximum.” Simply put, this is the plan stop-loss. Always ask your agent what the plans out of pocket maximum is. If the plan does not have an out of pocket maximum you may want to continue shopping. 

3) Know the plan deductibles. 
Deductibles can be confusing since they can apply to more than one part of the plan. For example, prescription drugs can have one deductible and hospitalization can have a separate deductible. You need to find out from your agent what the deductibles are for all parts of the plan. You also want to find out if the deductible is per year or per occurrence.  

4) Ask about the co-insurance. 
Co-insurance is the percentage of the bill you are responsible for. For example, a plan with 80/20 co-insurance means you would be responsible for 20% of the bill up to the out-of-pocket maximum.  

5) Know the plans limitations.
Some plans limit doctor’s visits and/or prescription drugs. Ask you agent if the plan has any limitations regarding doctor visits, prescription drugs, or wellness. You will also want to know the policy maximum. You should have at least 2 million in coverage.  

6) Get it in writing.
When an agent tells you about the plan details make sure it’s backed up in writing. If it’s not in writing then it doesn’t exist. This especially applies to “this sounds too good to be true” situations.  

7) Don’t get pressured.
Purchasing a health insurance policy is a major decision. If you rush into the wrong policy you may not be able to change companies. You could have a change in health, which might make you ineligible for other insurance therefore trapping you with the policy you have. Before buying a policy ask yourself a simple question: “In a major event is this the policy I would want to keep?”  

8) Ask if it’s a discount plan. 
Beware of agents selling discount plans. There are cases where the agent may not directly state that it is not insurance. Simply ask the agent “Is this a discount plan or insurance?”  

9) Ask if the policy is tied to an association. If so, what are the fees?
Always ask if the plan is tied to an association. Just because a plan is tied to an association does not mean you should not purchase it. Many plans offer valuable association benefits that are worth looking into.  But ask if you are required to join the association. Ask about the association fees and find out if there’s an administrative fee.  

10) Run through some scenarios.
A great way to get your questions answered if you’re unfamiliar with insurance terminology is to ask the agent for examples of what you would owe: 

A: If I broke my leg and went to the ER what would I owe? 

B: If I had a major heart attack and the bill was $60,000 what would I owe? 

C: If I got sick, saw my doctor and got a prescription what would I owe? 

D: What if I need physical therapy?