Health Insurance can take on many shapes and sizes and there is a large amount of information across the web, so here we provide some common Facts & Questions that we hope will help guide our clients in the right direction.
What are preexisting conditions?
Preexisting conditions are conditions that are excluded from coverage under a health insurance policy. Examples are endless but include things like knee injuries, back injuries, heart ailments, etc.
Are all policies the same?
No they are not. Policies and rates vary widely. It’s possible to pay a higher rate for a policy that offers less benefits if you don’t do your homework.
Do I really need a lot of coverage if I am healthy?
Yes. The principle of insurance is to provide protection in case of a major life changing event. Most people can handle small bills. Very few people can handle the thousands upon thousands in bills if you have a major catastrophic event.
What if I am on a small or tight budget?
If you’re on a small or tight budget than you really need good insurance! You should choose a major medical plan with a high deductible. This will keep your premium low while not exposing you to untold thousands of dollars in claims.
I saw an ad that says my entire family could be covered for $139. Is that true?
Ads like that are for discount or indemnity plans. They are not insurance. They offer discounts “up to” certain percentages. In reality they offer few savings and finding doctors to see you is difficult at best. A major event could cause extreme financial hardship.
I don’t have the time to shop. can’t I just buy any cheap plan and switch it if I don’t like it?
Not really. Florida is not a guaranteed issued state. That simply means insurance companies can decline you do to health reasons. If you develop a condition you may not be able to switch insurance companies. Therefore it’s very important that you choose a good plan initially.
Is there any way around spending money when I only use 20% of my plan?
All insurance is designed to be there for unforeseen events. You can never truly know when a major or life altering event is going to happen, that is why insurance is so important.
What is a health savings account?
This is a self-funded tax-free account that is used with a high-deductible plan. It works just like an IRA however you use the money for a wide variety of medical expenses. For details on Health Savings Accounts please contact Alliance and Associates.
What about rate increases and cancellation?
No one can be singled out for rate increases or cancellation due to claims or a change in health.
Premium rates on individual health insurance policies can be increased. State-regulated policies contain clauses that prohibit an insurer from raising the premiums for an individual unless it does so for all policy owners with that particular type of class of policy. In other words, the individual cannot be singled out for an increase in premium because of claims; the company must raise the premium for all insureds for that specific policy. The Office of Insurance Regulation must approve rate increases prior to their use.
What is a deductible?
A deductible is a set amount of money that you’re responsible for before the plan pays. For example, if you had a $500 deductible and had a $2000 ER bill, you would be responsible for the first $500. It is important to find out what the deductibles are and what parts of the policy they apply to.
What is coinsurance?
Coinsurance is the percentage of money that you’re responsible for. Typically it’s either 100/0, 80/20 or 70/30. If you had an $10,000 surgery bill and your coinsurance was 80/20, you would be responsible for 20%. Most plans have an out-of-pocket max that is used in conjunction with coinsurance.
What is an out-of-pocket max?
This is a stop-loss for insurance policies. It’s the maximum amount you can pay. We can use this example: $100,000 surgery bill with a $1,000 deductible, 80/20 co-insurance and an out-of-pocket max of $3,000. If this case you would owe $4,000 ($1,000 deductible plus your out-of-pocket max of $3,000.) Another example would be an inexpensive outpatient knee surgery of $2,000. In this case you would owe $1,400 ($1,000 deductible plus 20% of $2,000.) Make sure your plan has an out-of-pocket max. Also make sure it applies to the entire policy.
What is a network?
A network is a group of doctors and hospitals that have agreed to do business with a particular insurance company. If you stayed “in network” you would be able to see any doctor. If you did not stay “in network” then you would be “out of network.” Always check your policy to see how they handle out-of-network claims.
How do I know a good insurance company from a bad insurance company?
Generally, third party rating services and you state insurance commission are your best sources when considering insurance. These organizations have financial records as well as claim paying performance statistics that can help you make an informed decision.
What is the difference between an agent that works for one company versus an agent who works independently?
In most cases, an agent who works for one company is considered exclusive. In order to sell the insurance he/she represents he/she must be employed by the company. An independent agent, on the other hand, is free to represent as many companies as he/she wishes.
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