8 Private Medical Insurance Mistakes
Buying Health Insurance? Don’t make these mistakes
Private medical insurance has been my specialty for over a decade. I talk with hundreds of people each year and many of them make one or more of these common mistakes.
- Don’t Cancel Your Health Insurance Policy Too Soon
- Don’t Think COBRA Costs Less
- Don’t Get Pregnant Without Maternity Insurance
- Don’t Keep Your Maternity Insurance Too Long
- Don’t Buy a Discount Plan instead of Health Insurance
- Don’t Buy a Health Insurance Plan Not Approved for Your State
- Don’t think Low Deductibles Are Always Best
- Don’t Lie on Your Application
Don’t Cancel Your Health Insurance Policy Too Soon
Never cancel an existing health insurance policy before your new policy is approved. Too many things can happen to the human body to take that risk. Being without health insurance, even for a day can mean exposing yourself to hundreds of thousands of dollars of exposure.
Many people think that they need to wait until the last minute to apply for a policy in order to keep from paying two companies for the same month of coverage. Private medical insurance companies will typically let you apply two months in advance of the date you need coverage. Try to apply at least a month before you need coverage. This way you have a good chance of receiving your approval letter early enough that you can cancel your old policy before the new one goes into effect.
Don’t Think COBRA Costs Less
The COBRA act gives former employees of medium and large corporations the right to continue to purchase health insurance through their former employer for 18 months. Too many people wait until they are nearing the end of their 18 months to start shopping around for coverage. I’m sure that people think that their COBRA insurance is their best an lowest cost option. This is not usually true. If you have a pre-existing medical condition that will keep you from qualifying for a private health plan, COBRA may be your best option. Otherwise you should start shopping for health insurance as soon as you decide to leave your employer. COBRA is often twice the price you would pay for a comparable individual health insurance policy.
Don’t Get Pregnant Without Maternity Insurance
Many if not most individual health insurance plans will not cover the expenses of pregnancy. Today those expenses can be twenty thousand dollars or more. If you are planning to expand your family, make sure that your present policy will cover maternity and make sure that you have satisfied any waiting period before you conceive.
Don’t Keep Your Maternity Insurance Too Long
Pregnancy is expensive and so is the insurance that covers it. I will occasionally talk with women who have had their tubes tied who still have policies that cover maternity. Removing the maternity insurance rider or purchasing a policy that does not cover maternity will save you hundreds or thousands of dollars each year. Having pregnancy insurance when you don’t need it can cost you.
Don’t Buy a Discount Plan instead of Health Insurance
Often clients will purchase plans that for all the world appear to be health insurance policies. However, in many cases, they are not medical insurance; they are merely discount plans. Discount plans have their place, however if you think that you are getting too good of a deal on your plan, make sure that it is actually an insurance plan.
Don’t Buy a Health Insurance Plan Not Approved for Your State
Any private medical insurance plan you purchase should be approved by the state you live in. Contact your state’s insurance department and make sure that any company you decide to do business with is approved by your state.
Don’t think Low Deductibles Are Always Best
Health insurance plans with low deductibles or zero deductibles are often sought after by my clients. However, the higher price for these plans often far outweighs the increase benefits. If when comparing plans, you add the amount of the deductible to the amount annual premium you will often find that the high deductible plan has a lower overall cost, even in a catastrophic situation.
Don’t Lie on Your Application
Insurance companies have up to two years to rescind your policy. If they catch you in a significant misrepresentation, they can cancel your policy and force you to pay back any money they have paid for your claims.