Health care is a hot topic right now. When you buy a health insurance policy, never make your decision on price alone. Consider these facts about health insurance when making your buying decision.

FACT #1

All Health Insurance Companies Are Not the Same.

Before you purchase your next health insurance policy, you should know how insurance companies are rated. The AM Best Company is the oldest, most experienced rating agency in the world and has been reporting on the financial condition of insurance companies since 1899.

The ratings the A.M. Best Company assigns are:
A++      and         A+ (Superior)
A         and         A- (Excellent)
B++      and         B+ (Very Good)
B         and         B- (Fair)
C++      and         C+ (Marginal)
C         and         C- (Weak)
D (Poor)
E (Under State Control)
F (In Liquidation)

Solution to the Problem

Get the A.M. Best report at the library, call A.M. Best at (908)439-2200 to request a rating on a health insurance company or ask your agent for the information.

FACT #2

All Insurance Companies Do Not Pay Claims the Same Way.

There are two main methods by which claims may be considered for payment:
1. The insurance company decides how much they should pay.
2. An independent third party in the industry decides.

Commonly, the insurance company decides what they want to pay, using wording like:

• We pay reasonable charges
• We pay normal charges
• We pay prevailing charges
• We pay average charges
• We pay permissible charges
• We pay regular charges
• We pay a negotiated fee
• We pay an allowable amount
• We pay a limited fee schedule

Only the company knows what the meaning actually is. Frequently it is not what the hospital, doctor or policyholder feels it should be, resulting in misunderstanding.

Solution to the problem

The American Medical Association (AMA) recognizes a term called USUAL AND CUSTOMARY CHARGES. It sets the highest standards fore ALL health insurance claims . These charges are based on what the majority of costs are for the same or similar service within the geographical area. Make certain that you understand how your proposed insurer will pay claims.

FACT #3

All Insurance Companies do not Cover Pre-Existing Conditions.

When you are accepted by a health insurance company, you will normally have a waiting period before any pre-existing condition is covered. A waiting period of 12 months is typical for most plans in the industry. Under certain circumstances, companies must give you credit for waiting periods satisfied on your previous policy. If you have an unacceptable health condition, a company may offer you a rate-up or an exclusionary rider in order to issue your policy. A rate-up means that your premium may be increased to include coverage for your condition. An exclusionary rider means that a specific condition will not be covered.

Solution to the Problem

Make sure that you know exactly how and when your pre-existing condition will be covered and about any waiting periods.

FACT #4

Some Policies Do Not Cover All Doctors.

Some plans limit you to the medical care providers chosen by the insurance company (their clinics, networks, etc.)

Solution to the Problem

Consider a plan that best meets your needs. If you are comfortable with a clinic environment, an HMO may be best for you. If not, you may want to consider a plan with the greatest flexibility in choosing doctors and hospitals.

FACT #5

Some Health Insurance Plans May Not Travel Well.

If you travel a lot you need to be aware that some plans will not cover you if you are outside the United States. Some plans may limit or reduce your benefits if you use them outside a particular jurisdiction.

Solution to the Problem

If you travel extensively you may want to choose a plan that does not have geographical limitations. You should be sure that you understand what would happen if 1) you choose to go out of state for medical treatment,
and 2) how a medical problem would be handled if you were in a foreign country.

FACT #6

All Health Insurance Companies Do Not Increase Rates the Same Way

Some companies have provisions in their plans that allow them to single individuals out for rate increases independently of all other policyholders. Sometimes companies raise rates due to your claims history. Since all insurance companies are subject to paying claims and economic variances, there will always be a need for periodic rate increases; however, when the need arises, you don’t want to be “singled-out”.

Solution to the Problem

Make sure that you understand how your proposed insurer will impose premium rate increases. You may want to consider a plan that performs any necessary rate increases on all the policyholders of the same type.

Summary

Sometimes we never find out how our health insurance policy works until we have to submit a claim. Few people take the time to read the fine print until it is too late. It is well worth your time to understand these 6 Facts! You should choose a plan based on the quality, reputation and reliability of the insurance company, the insurance plan and your agent. Then you can adjust your premium rates by increasing the deductible or co-payment amount to make it more affordable.

Buy from a professional, licensed agent in whom you have complete trust and confidence.
Make sure that you understand how long it takes the company to process and pay claims. Make certain that you understand any exclusions and limitations to a proposed plan. Get the phone number of your agent  and your insurance company’s Customer Service Department in case you need assistance with your health insurance benefits.

We will be happy to help you do a review of your current health insurance policy to see if you are getting the best possible coverage at the most affordable cost.