July 23, 2006 by bob.

Q. I recently changed jobs. At my old employer I was paying $100 per month for a plan that had $15 copays and $0 deductible. My new plan has $25 copays and a whopping $3000 deductible. On top of that, I am asked to pay over $700 per month for coverage. Is my new employer ripping me off? Is there a government agency that regulates this?

A. Your new employer is contributing less for the cost of health insurance than your old employer. This is not uncommon.

Your former employer had a much richer plan, and probably paid 90% or more of the premium. Your new employer is paying somewhere around 30% of the premium.

Government has tried to require businesses to pay a percent of payroll and lost. Most recently Maryland tried to tell Wal-Mart how much they should pay toward the cost of health insurance and lost in court.

You should have made sure you understood all aspects of your compensation package before making the change.

Between now and your next open enrollment you need to look in to dropping dependent coverage and picking up a dependent only carve-out plan. Doing so can probably save $300 per month or so.

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July 21, 2006 by bob.

Q. I am looking for health insurance and all I need is the rates and coverage. I will look over the plans and decide which one is best. When I decide, I will contact you if I decide to use your services.

The plan I have now doesn’t work. None of the doctors will accept my card. When I submit a claim the plan never pays as much as it should. I want a better plan this time.

A. I have no problem providing you the information as requested, but before you start looking, ask yourself why the plan you have now didn’t work out. You looked over several plans before and picked the one you have now. How do you know you won’t make the same mistake all over again?

Clients who trust me enough to make a recommendation end up saving about 30% over plans they would have picked. Even if you happen upon the “right” plan for your needs if the underwriting is not a fit for your health history you will end up with a plan that does not cover everything, or is more expensive than you thought it would be.

And who will service your account? The plan you have now leaves you without an advocate. The agent who sold you the plan is no longer in the business. Just last month I picked up an agent of record letter on a new client, allowing me to service their business. The first thing we did was review a large claim from last year in which he felt the carrier paid less than it should. After a review and consult with the carrier, it was determined that they underpaid the claim by $2,000. This amount was refunded in short order.

Still think you want to go alone in this venture?

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July 20, 2006 by bob.

Q. I many of your posts and emails you refer to the amount “at risk”. What exactly do you mean?

A. Good question.

Professional risk managers look at two things in deciding if they have assets they want to insure, and how much insurance to buy.

For instance, you would never buy insurance for a lawn mower. The amount at risk if the lawn mower is stolen is around $300 . . . more if you have a riding mower.

But your car & house are worth much more. The amount at risk is in the hundreds of thousands (structure for the house; liability for the auto).

Similar philosophy applies to health insurance. The amount at risk for a doctor visit is usually $100 or less. The amount at risk for a serious accident, heart attack, stroke, cancer, etc. is much greater. Possibly in the hundreds of thousands.

In evaluating health insurance a risk manager would look at how much is at risk for a major claim and wouldn’t worry about the at risk portion for routine medical care.

Many policies limit your at risk on accidents to $150 or less while the amount at risk on most policies is $3,000 - $5,000. In some cases the amount at risk cannot be determined due to the limited benefit structure of the policies.

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July 17, 2006 by bob.

Q. I decided to enroll with a large association for the self employed and take their health insurance plan. Our current Blue Cross plan was so expensive and the plans you suggested would not take my wife. You suggested leaving her with Blue Cross and moving the rest of us to a new plan to save money. The association is willing to take all of us so we don’t have two different plans. Why is this bad?

A. The plan you picked is a limited benefit plan with caps on everything. A major claim will leave you owing as much as half the bill.

By leaving your wife with Blue Cross, she had full coverage for everything, including her pre-existing condtion. The new plan will not only limit benefits for everyone but will not cover her pre-ex condition. Also, the benefits she needs the most are severely limited compared to what she had under the Blue plan.

By dropping your Blue plan you have dug a hole that you may not have an escape. Your best bet is that Blue will take your wife back under a separate policy. Otherwise there is nothing I can do for her but wish you the best.

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July 6, 2006 by bob.

Q. Two years ago you recommended a health insurance plan for my family. At the time I felt like there were better plans available than what you were suggesting. I bought from another agent, and another carrier and have been dissatisfied ever since. When I try to use the plan many doctors will not file the claim but require me to pay up front and then collect from the carrier. When the carrier does pay, it is never as much as the doctor charges. What can I do to get away from this plan.

A. Your situation is not unique. I have several clients now who felt they could get a better “deal” elsewhere. Some used another agent; others bought direct from the carrier.

The plan you have is a reasonable & customary plan that is not tied to any network providers. The doctors you use are free to charge market rates and you must make up the difference in what the carrier is willing to pay and what the doctor charges. This always leaves you in the hole.

Plus under that kind of plan you never know what your out of pocket cap will be on a major claim.

The plans I recommend always have clearly defined caps and are always tied to a network where the providers are bound by contract to accept what the carrier offers as payment in full.

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July 5, 2006 by bob.

Q. I like the plan you have proposed but I am concerned about the $200 prescription drug deductible. The plan I had before only had a $50 deductible. I have called that carrier and they told me I can keep the drug plan for only $17 per month. How much will it lower the premium on the new plan to eliminate drug coverage? If it cannot be eliminated I think I will keep the old drug plan and use it until I have $200 in drug charges for the year.

A. The Rx cannot be carved out of the new plan. I have seen the benefit under your old plan and the new Rx benefit, even with a higher deductible, is much better.

There is no rule against having two Rx plans, but why would you want to? If you keep the old Rx plan you will pay $204 per year ($17 x 12) PLUS pay the first $50 in drug charges before you get into the copay. If you forget about the old Rx plan and just put the $17 per month into a savings account you will have accumulated your deductible under the new plan.

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July 5, 2006 by bob.

Q. I am looking for a plan for my family with low doctor & drug copays. We don’t take medication now, but I want to make sure my medicine will be affordable when I need it. I go to the doctor once a year, maybe twice but I can’t afford to pay $200 or more just to see a doctor. I also want a low deductible, $500 but no more than $1,000 and I don’t want to pay a lot of money. Can you help me?

A. The plan you are looking for is what most people want. If you ever find it, let me know because I have a huge list of people looking for the same.

If you can’t afford to pay $200 to see the doctor twice a year you have problems that cannot be solved by insurance. Most people really don’t need doctor visit insurance, what they really need is car accident insurance, or heart attack insurance, or cancer insurance.

Taking care of the small things in a health insurance policy is nice but terribly expensive if you want the carrier to cover these items.

The plan you describe will cost your family at least $1000 per month. For your $1000 you can go to the doctor 6 times per year under a copay; after that you pay out of pocket. Your medicine will cost $30 after you have satisfied the $200 Rx deductible. A major illness or accident will cost you $4,000 plus copays.

As an alternative, you might want to consider a plan that discounts things like doctor visits & prescription drugs. An office visit will run somewhere around $60 - $70; meds will be discounted around 30%. A major illness or accident will cost you no more than $5,000 and your monthly premium is $250.

So which plan makes more sense?

Paying $1,000 per month and never using the plan or paying $250 per month? The choice is yours.

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July 4, 2006 by bob.

Q. My wife’s employer has notified us of a change in our health plan. It seems the carrier’s contract with a major hospital chain has expired and we have 2 weeks to either accept the old plan but WITHOUT access to that hospital or their doctors, or find new coverage. We are paying $500 per month for family coverage which I think is outrageous. I think we can do better.

A. So basically you think you can get more coverage for less money. I hate to burst your bubble . . .

Your wife’s employer is paying about 65% of the premium. When you opt out of the coverage you will have to pay 100% of the premium. Even if you can find comparable coverage, and you can, the premium you will pay will be almost double what you are paying now.

The situation you describe, where a provider contract has been allowed to expire, is nothing new. This particular carrier went through the same thing about 2 years ago. Eventually the two came to an agreement but about 60 days had passed.

You can still use the non-par providers but you will pay more out of pocket when you do so. No one is telling you that you cannot continue to see your family doctor or use the hospital down the street.

The plan you have now doesn’t get much use. You are paying about $6,000 per year and, by your own admission, using less than $500 per year in medical services.

You could opt for a plan that pays all medical bills in excess of $10,000 per person for about $250 per month and cutting your annual outlay (in a typical year) to about $3500.

You can take on even more risk by increasing the deductible to $25,000 and dropping the premium to $170 per month making your expected annual outlay around $2500.

Either way you save money in a typical year, enough to ride out a “bad” year once every 3 years at the $10,000 deductible or once every 6 years at the $25,000 deductible level.

Or you can keep paying $6,000 per year and make the carriers rich.

Your choice.

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July 1, 2006 by bob.

Q. I am 5 months pregnant and looking for health insurance. No one will accept me for coverage. Isn’t there a law against this?

A. Since you are looking for INDIVIDUAL coverage, unless you reside in one of a handful of states, the answer is no. In about 45 states carriers can refuse coverage and can refuse to cover your pregnancy.

Pregnancy is just like any other insurable issue. You must take responsibility and purchase the coverage BEFORE you need it.

You can try and negotiate with providers for a discount but most will want a good portion of their bill up front. You can pick up a discount plan for about $20 per month that will provide you access to doctors & hospitals that have agreed to discount their services in exchange for prompt payment.

If you were no more than 3 months pregnant you could have purchased an INSURED plan that would cover the pregnancy after 6 months.

These are the only options, short of finding work with an employer plan that has health insurance.

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