The cost of COBRA insurance is often much more than the low cost medical insurance through a non-group private health insurance policy. This is often true even when the coverage is offered by the same insurer.
If you have always received your insurance coverage through your employer and never purchase medical insurance on your own, you may believe that your group health insurance plan is your best option.
Many people want to know how to apply for COBRA insurance but never ask whether or not COBRA is their best option.
How does COBRA insurance work?
COBRA is a temporary extension of your group health insurance. Typically this extension lasts for 18 months, but in some circumstances this period can be longer. When you are on COBRA you will probably pay the full cost of your insurance. Your employer is unlikely to subsidize your costs.
Often people are lead to believe that group coverage is cheaper because they are unaware that their employer subsidizes their premiums. They are often unpleasantly surprised when they find out how much it really costs.
But often they pay it anyway. They don’t know that group health insurance is usually more expensive than non group or individual health insurance. Many people only shop insurance after COBRA ends.
When they wait until their 18 months is almost over to get the prices for other policies, they are often quite upset with themselves. Most of the insurance coverage that people get through their benefit packages at work is also available to them on a non group basis. You can purchase life insurance or dental insurance for the unemployed without going through an employer.
Be sure to get quotes for health insurance today. You may be surprised to find that your cost for COBRA insurance is higher than you would pay with another policy that provides the same coverage.
Those needing health insurance for individuals with pre existing conditions should be sure that they don’t take the first “no” as their final answer. They may pay more than they should if they take no for an answer or accept the first costly option. Not all insurance companies treat every condition and individual the same way.
An individual who believes that they have a pre existing health condition that will affect their ability to enroll in an insurance plan should first verify that their condition is a problem with all the plans available. Even if one or two medical insurance companies considers them a high risk or denies coverage, they should not assume that a second or third company will do the same.
Special Rules for Children with Pre Existing Conditions
Although there are certain conditions that adults will be denied for when they apply for any underwritten policy, this isn’t the case with children. The recent health care reform mandates changes this. As of September 23, 2010 (with few exceptions) a child who applies with a parent cannot be denied based on their medical history so long as one parent is approved for coverage. This is also the case when an individual applies through their place of business for a group health insurance policy with their child.
Adults with Pre Existing Medical Conditions
Health insurance companies do not all have the same underwriting guidelines. Each is a separate business and they will often assess the risk of insuring an individual differently. For this reason a person diagnosed by their provider with high blood pressure and high cholesterol, might be turned down based on their preexisting conditions when they apply for enrollment in a policy offered by one company. A second company may think that that person is a high risk, but approve their application but ask that they pay higher premium. A third company might not consider them a high risk at all and will approve that person for any of their plans with a standard premium.
Different companies will have different height and weight guidelines and therefore different opinions regarding whether an individual obese or whether they are just heavier than the average person and therefore will be willing to accept the risk of insuring that person. These differences apply to more serious preexisting conditions as well. Pre existing conditions like cancer, diabetes and heart conditions are treated differently by different insurance carriers.
You have to shop around not only for price and coverage, but also for the most favorable underwriting decision. Working with an agent who knows the health care insurance landscape in your area can go a long way towards making the experience of shopping around for health insurance less consuming and less of a hassle. An agent may be able to keep you from paying more than you should.
This is especially true when looking for private medical insurance for an individual with a pre existing conditions. Finding access to affordable health insurance means gaining affordable access to otherwise costly providers that can make a difference in the quality of your life.
There are ways to lower your monthly cost for health insurance. Three powerful ways include raising your deductible, shopping for a better price and becoming a better risk.
Your Deductible Matters
Raising your deductible even a small amount may result in a significantly lower premium. Although this strategy means that you will have less coverage, it may result in your having more coverage per dollar spent on medical premiums.
Compare Annual Premiums with Annual Deductibles
When making a decision about raising your deductible, be sure to consider how much you will save per year. Deductibles for health insurance are not monthly they are based on a 12 month period in most cases. To compare apples to apples, you should compare your savings over the same time period.
Shop Around for Medical Insurance
Comparison shopping is always a good idea. You may be able to dramatically reduce your monthly cost for health insurance by getting quotes on websites like this one. However, before making a final decision, be sure that the insurance company is approved by your state’s insurance department and that the policy covers what you need.
Healthier People Pay Less for Health Insurance
One little talked about way to lower your rates for health insurance is to become a better risk. This can mean that you have to do some research.
If, for example, you are in a higher rate category because of your weight it will pay to know what weight you need to be to get into the cheaper category. You may be paying 25% more because of five or ten pounds.
If you have are paying more because of a medical condition that is now resolved, you may be able to reapply and get a lower rate. If you don’t know why you are paying more, you will not know that you should shop around after you have been released by your doctor.
Taking on a little more risk by increasing your deductible can result in your paying much less for your insurance policy. You may also reduce your monthly costs for health insurance by doing some comparison shopping on websites like this one. Becoming healthier can also help you get a better rate. Combining these strategies can result in your monthly cost for medical insurance dropping substantially.
Before you can buy inexpensive medical insurance with confidence you will need to do a little research. There are some strategies you can use to avoid paying too much. There are three main steps. The first step is learning how health insurance policies work. The second involves shopping around. The third step is to compare the policies.
In order to compare health insurance policies, you should learn how they work. Knowing how health insurance deductibles, copays and coinsurance work is crucial.
Once you have a basic understanding of how insurance policies work, you should then start to shop around. Be sure that you limit your shopping to insurance companies that are approved to sell health insurance in your state. You can check with your department of insurance to see which companies have been approved for your area.
No insurance company offers the best bargain for every age, gender and situation. Each situation should be looked at separately. Some companies are better than others, but it is important to look at the policies as well. Not all of the policies offered by a good company will be good for you.
Finding insurance cover at a good price involves a little work, but learning a little more about health insurance can mean lowering your costs a lot.
The stop loss or out-of pocket maximum amount in a personal health insurance policy is as important to understand as is your deductible. Knowing how this provision of your policy limits your cost for health care makes it easier to select the right policy for yourself or your family.
Most health insurance policies will have a coinsurance provision that will require your paying 20% or more of your expenses after you have met your deductible. The stop loss provision limits your coinsurance to a few thousand dollars in most cases.
This way you will not be required to pay 20% of a catastrophic medical expense. You may required to pay 20% of the first $5,000 or $10,000 that is in excess of your deductible.
Regarding out of pocket maximum or medical stop loss. Insurance companies have 2 different ways of making their calculations. To make it even more confusing, the limits imposed by these provisions may not apply to all of your spending.
When comparing policies and determining which to buy, it is important that you understand which calculation method each company uses so that you can select the right policy. In some policies, your out-of-pocket maximum or stop-loss only limits the amount of coinsurance you are required to pay. In others, the limit also includes your deductible.
You may find two separate policies that work the same way, but have different stated limits for their out of pocket maximums. Both may require that you pay the first $1,000 of your medical bills each year (this is your deductible) and then 20% of the next $7,500 of your expenses each year (this is your coinsurance). The literature for one policy may express your out of pocket maximum as $1,500 because their calculation ignores the deductible. The other may express your out-of-pocket maximum as $2,500 because they include the deductible in their definition.
Not knowing how each policy defines these terms can cause you to under value or over value a policy and make the wrong choice. For this reason, it is important that you ask questions or read the literature carefully. You should be able to determine what your deductible and coinsurance limits are by reading each policy’s outline of coverage.
Regardless of which method a company uses to calculate their stop-loss or out of pocket maximum, the term applies to a 12 month period unless the policy’s term is less than 12 months. With some policies, the 12 months will start on the effective date or its anniversary. With others it may start on January first of each year.
The Term “Maximum Out Of Pocket” Can Be Misleading.
This is because the stop loss or maximum out of pocket provision will probably not include your copays. Copays are usually not limited. If you have to pay a copay each time you visit your doctor, you will pay that copay even after you have met your deductible and coinsurance limit.
Family deductibles, coinsurance and stop-loss provisions.
The stated limits for your cost shares, which include your deductible, coinsurance and stop loss, may be based on a per-family member basis. It could also be based on the medical expenses for the family as an aggregate. Stop loss insurance provisions as well as deductibles can work one of three ways:
You can have separate out of pocket limits for each family member
You can have one out of pocket limits limit for the family as a whole
Combined out-of-pocket limits
Separate limits for each family member
Which can be further limited by your family limit
The stop-loss or out of pocket maximum provision is an important part of a health insurance policy. Understanding how this provision limits your exposure should you have catastrophic medical expenses is important if you are going to buy the right health insurance policy.
In addition to sharing with you a health insurance coinsurance definition, I want to share with you 3 important things that you may not know about coinsurance. When it is time to buy a health insurance policy, an investment in information can reduce your investment in dollars. Not understanding how coinsurance works can cause you to under estimate or over estimate the value of a policy and buy the wrong health insurance policy.
Health Insurance Coinsurance Definition
What is coinsurance for health insurance? Coinsurance is one of the three major cost shares you can expect to find in most health insurance policies. The other two are deductible and copay.
Coinsurance is not found on every policy, however, on many policies you are expected to pay a certain percentage of your medical expenses. This percentage is called coinsurance.
There are three things that you may not know about coinsurance even if you are aware of the standard definition. Not having this information can cause you to buy a policy that is not as good as you think it is. It can also cause you not to buy a policy that is better than you think it is.
Coinsurance Percentages Are Not Standard
Out-Of-Network Coinsurance Is Usually Higher
Out-Of-Pocket Maximum Limits Your Exposure
Coinsurance Percentages Are Not Standard
Although coinsurance has traditionally been 20 percent for the consumer, this is not the case with all policies. Some policies limit the consumer’s coinsurance costs to 10 percent. Other policies may require the policyholder to pay 50 per cent in coinsurance.
Out-Of-Network Coinsurance Is Usually Higher
Out-of-network coinsurance on a health insurance policy is usually much higher than in-network coinsurance. It usually pays to go to in-network doctors, hospitals and other health care providers.
(In addition to paying a higher coinsurance percentage when you seek care from out-of-network providers your other cost shares may be higher; your benefits may be lower as well. Your deductible may be higher. Your co-pays may be higher. Your out-of-pocket maximum may be higher. Your annual or lifetime benefit limit may be lower.)
Out-Of-Pocket Maximum Limits Your Exposure
Often people will have a fearful response when they hear that they will have to pay 20% or more for their medical expenses. They quickly do the math figure that if they have a $100,000 heart attack or stroke they will have to pay $20,000 towards their medical bills.
This is rarely the case. Your policy is likely to have an out-of-pocket maximum or stop loss provision that limits your exposure to a few thousand dollars. Not knowing this can cause you to undervalue a health insurance policy that has coinsurance and this may cause you to select the wrong plan.
Although it is important for you to understand the standard health insurance coinsurance definition, it is also important for you to know the other three things outlined above. Coinsurance percentages are not standardized, so you will need to know the exact percentage required for any policy you are considering purchasing. Out of network coinsurance is typically much higher than in network coinsurance. Your out-of-pocket-maximum or stop loss will probably limit your exposure to a few thousand dollars even if you have huge medical expenses.
If the only health insurance copay you are familiar with is the small fees you pay to the pharmacy, please read on. Copays can be hundreds of dollars!
A health insurance copay is a flat fixed amount that you pay on a per service or per prescription basis. Since most people’s involvement with medical insurance copays is limited to relative pocket change, many fail to realize that copays can be much higher. Copays can cost your family thousands of dollars over the course of a year.
Medical insurance copays aren’t just for doctors’ visits and prescription drugs. You may find that your policy has a $75 copay for walk-in clinic visits or a $500 a day copay in the hospital. You should know exactly what your copays are and what they apply to before you purchase any health insurance policy.
Another thing that most people are unaware of is that the out-of-pocket maximum or stop loss provision of their policy will probably not limit their co-pays. This means that even though you may have met your deductible in May, you can still continue to pay copays for each doctors visit in December.
Also, if you are used to a policy that only has copays for certain medical services don’t assume that all policies work the same way. Some policies will make you meet your deductible for prescriptions. Others will pay for prescriptions after you pay a small copay. Others will have both a deductible and a copay on prescription drugs.
Do what you can to understand how any health policy you own works. This means that you should have a good understanding of the following terms:
stop loss or out-of-pocket-maximum
You should also know how each of the above cost shares apply to any policy you own or are considering buying.
It is important to note that having a large copays or deductible are necessarily bad things. What is important is that you are able pay the right price for the coverage you get. If you are not aware of the differences between the cost shares in different policies, you can wind up selecting the wrong plan and paying too much.
Medical insurance copays are an important part of most health insurance policies today. Being aware of how they work and how they can impact your finances is important if you are going to make the right decision regarding your health insurance buying decisions.
A health insurance deductible is one of the most important aspects of a health insurance policy. To a large degree the size of your deductible controls your price. Understanding what a deductible is and how it is applied on any policy you are considering is important if you are going to make the right decision when looking to buy health insurance.
Not all expenses are subject to the deductible in every policy. In some policies, doctors’ visits and prescriptions are only subject to co-pays. However, don’t assume that this is the case for all policies because it isn’t. Many policies make everything subject to your deductible.
The amount of your deductible is the amount you will pay before your insurance company pays its share for medical expenses that are subject to your deductible.
If you have a $1,000 deductible and $2,000 worth of medical expenses, you will pay $1,000 before the insurance company opens its purse. The insurance company may or may not pay the remaining $1,000 in full. This depends on whether you have coinsurance on your policy. The remainder may be subject to coinsurance. If it is and your coinsurance percentage is 20%, your insurance company will pay $800 and you will pay a total of $1,200.
Your health insurance deductible is probably based on a year’s worth of expenses. This means that your $2,000 worth of expenses could have been the sum total of several doctors’ visits or one hospital visit.
The deductible-year may begin on January first. It may begin on your policy’s effective date or the anniversary of that date.
Knowing when your deductible-year begins is important when it comes to timing planned medical expenses. If you are nearing the end of your deductible year, you may want to delay going to the doctor for non urgent issues if you are a long way from meeting your deductible. By putting the cost of a non-urgent medical treatment or exam on next year’s deductible, you increase the chances of meeting your deductible next year. Of course the reverse is true. You may want to have your next medical visit earlier rather than later if you have already met your deductible for this year.
You pay for any expenses that are subject to your deductible. This means that your insurance company doesn’t pay for these things and will give you a lower price if you opt for a higher deductible.
However the difference in price isn’t usually proportionate to the difference in deductible. When you get a lower deductible you may wind up paying an extra $100 for each additional $50 worth of insurance. For this reason medium and high deductible policies are often the best buys.
Some insurance policies will have low deductibles and very high co pays or coinsurance. For this reason many zero deductible policies are misleading to consumers. And for this reason you should understand how those other cost-shares impact health insurance policies.
When you compare health insurance plans there are three major aspects you should look at. Benefits, network and price are the areas to focus on.
Health Insurance Benefits: Policy Comparison Tips
You should be able to find a policy brochure or outline of coverage that describes any policy you are considering. You can probably download one from a website or have an agent email or mail one to you.
When you look at the brochure be sure to flip to the section that describes what they don’t cover. The section may be entitled something like “limitations and exclusions.” Sometimes the limitations and the exclusions are in two separate sections. Read this information carefully.
Watch out for policies that have a list of things that they cover with dollar amounts next to them. These policies are usually less than they appear to be. The dollar amounts in the schedule are rarely enough to cover the full costs. The amounts are not likely to increase with inflation. Also the list, no matter how long, will probably not cover everything that a good policy will cover.
The benefits of your health insurance policy are important, but they should not be looked at in a vacuum. The relationship of price to benefits is paramount.
Often a high deductible policy will have a premium that is low enough to justify the additional risk. In fact, sometimes the premium is low enough that there is no additional risk when compared to a more expensive policy. If the more expensive policy has a deductible that is $1,000 less than the cheaper medical insurance plans but has a price tag that is $1,000 more the less expensive plan is the better plan assuming the other benefits are the same.
Sometimes cheap medical insurance plans are better insurance plans, but you have to do your research to make sure.
Provider Network for Health Insurance: Policy Comparison Tips
Most health insurance companies have their network lists of providers online today. You definitely want to make sure that a hospital that is convenient to you is on their list. You also want to make sure that doctors who are acceptable to you are on their list. Although it may be best to have your existing physician on the list, that may or may not be crucial. If you are willing to switch doctors, make sure that there are doctors on the network list who are near your home or office.
Health Insurance Prices and Coverage: Policy Comparison Tips
As in just about everything else, cost is a factor. This is very true when looking at insurance for medical. Health insurance prices, however need to be looked at and compared with coverage.
When you are comparing health insurance plans it pays to look at policies from different companies and to compare prices, benefits and the network. All three are important.
There is a drawback to having a medical exam just before switching health care policies. You may be better off from an insurance perspective if you delay an exam until you have the new policy in place. Of course, you will need to weigh this risk against any risks to your health. However, any new findings may be viewed as pre existing conditions and may prevent or delay your purchase of a new policy.
If you are considering buying a new medical insurance policy or are being forced to make a change due to circumstances, you may be tempted to get as much medical work done as you can under your old policy. This can make a lot of sense especially if you have already met the deductible on your current policy. You should probably get any work done on any conditions that you are already aware of before you apply for a new policy. If those conditions are resolved before you apply, you may actually get a lower rate or be more likely to qualify for the policy.
The problem comes when new health conditions are discovered just before you apply for a new policy. If it is a major condition, it can keep you from qualifying for an underwritten health insurance policy. If it is a minor condition it may not matter. However if it is somewhere in the middle, the new insurance company may want to wait until they know that the condition is stable before they will approve you for a policy.
The way that most insurance contracts are written, a pre-existing medical condition is one that you were aware of prior to the effective date of your policy. This means that a medical condition that you may have today will probably NOT be considered a pre-existing condition unless you have or have had symptoms that would cause a reasonable person to seek medical advice or you have had a medical professional tell you that you have that condition.
Should you get an exam just before buying a new health insurance policy and a new medical condition is discovered, it will probably be considered a pre-existing condition. This can mean that your new coverage will cost more. It can mean that your new coverage will not cover that condition. It can mean that you don’t qualify for a health insurance policy until the condition is resolved. It can mean that you are denied coverage and can never get coverage from a private insurer.
Even with a pre-existing condition you may or may not have options available to you from a government-based insurance policy. However, these plans are usually either expensive and/or very limited in benefits and/or require that you have a very limited income.
Waiting an extra month or so to have your exam performed after the new policy is in place is more advisable from an insurance underwriting perspective. However, this may not be the best medical advice.
On the one hand, getting medical care a month earlier could mean that an intervention saves your life. On the other hand if a condition is discovered, you may not be able to pay for your treatment if you don’t have the option of renewing your existing coverage. You may be denied any new coverage you may not be able to afford the long term treatment that saves your life.
This post is written from an insurance agent’s perspective. Delaying a medical exam can be risky from a health perspective. You will have to weigh the risks involved. If decide to of play it safe from an insurance perspective and in so doing take a risk from a medical perspective.