August 7, 2006 by bob.

Q. My health insurance with Blue Cross keeps going up. This year it increased on the policy anniversary and last week I received a notice it is going up again because I am having a birthday next month. I almost never go to the doctor, yet they are increasing my rates. I have decided to sign up with Mid-West National of Tennessee. They tell me they have a plan with no deductibles and rates never increase. What do you think?

A. So many questions, so little time . . .

Health insurance premiums for all companies increase over time, no matter what you are told. And they increase whether you use the plan a lot or not all all. I noticed today that gas prices are up at my local gas station, yet I have not bought any gas in the last few days.

The point is, SOMEONE is using the health plan and EVERYONE has to pay for it.

SOMEONE is buying gas, even if it isn’t me, and it costs more for the station to refill their tank, even if I didn’t buy gas.

You did get hit with a double whammy. Carriers rate & rerate based on attained age + inflation. The first increase you got was due to inflation. SOMEONE is using the plan and it costs more to pay claims this year than it did last year. You just moved into a higher age bracket and statistically speaking, you are more likely to have more claims this year than in the past.

As for your choice in new carriers . . . all I can say is you have not done your homework. If you had you never would have opted to buy a plan with fixed benefits and a per hospital admission deductible before you can access the major medical.

Rates go up. The best you can do is learn to manage your risk, and your plan, rather than letting it manage you.

My clients still have rate increases, but they are not as much as they would be if they had followed the advice of other agents, or even bought without consulting someone. Many of my clients are paying less now than they were 4 years earlier.

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August 6, 2006 by bob.

Q. I was turned down for health insurance because I told the company I was pre-diabetic. How can I get coverage?

A. Being pre-diabetic is like being pre-pregnant. Either you are, or you aren’t.

What your doctor is saying is you have certain conditions that make you predisposed to developing diabetes. By taking steps now you may be able to avoid developing the disease. Lowering blood pressure, losing weight and getting more exercise are ways to counter the path your body is on now.

Underwriters are trained to assess a risk based on diagnosed illness and other factors such as BMI (body mass index). However, they will sometimes jump to conclusions that can affect your ability to obtain coverage.

When applicants try to complete applications without a full understanding of the questions, more often than not the final offer from the carrier is less than it could have been if you had answered the question as asked, rather than speculating on the answer.

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August 5, 2006 by bob.

Q. What is the difference in a deductible and a copay? Aren’t they the same?

A. This just proves that sometimes agents take things for granted and assume what we know is common knowledge.

This question comes up more often than it should which shows that many people really don’t understand their coverage. This seems to be more prevalent in employer sponsored plans vs. those purchased individually.

In simple terms, a copay is a per occurrence “fee” that must be paid before insured benefits kick in. An example is a doctor visit copay. If your plan has copays, and not all plans do, you are required to pay a small fee, usually $20 - $40, everytime you visit the doctor. This fee is assessed for all visits, usually without a limit.

Some individual plans in particular will limit the number of copay visits to 2 or 6 visits per year. After that limit is reached you will pay the full charge and that amount paid is credited toward your annual deductible.

The deductible is almost always an ANNUAL fee that must be paid before benefits are available. Typically many plans have a $100 - $300 Rx deductible before you can take advantage of Rx copays. Major medical expenses, such as hospital admission, radiological testing or surgery will incur a deductible of $500 - $5000 before the carrier pays any benefit.

Most deductibles are per person, and assessed only once per year. Some plans have a FAMILY deductible rather than per person. A few carriers have a per HOSPITAL ADMISSION deductible and some have a per ILLNESS or per ACCIDENT deductible. You want to avoid these plans entirely.

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August 3, 2006 by bob.

Q. I do not have health insurance. Can’t afford it. Will doctors refuse to treat me if I do not have health insurance?

A. Would you refuse to work for your employer if they were unable to pay you?

Most folks who say they cannot afford health insurance really mean they have other things they like to do with their money rather than buying insurance they may never need. The problem with this is, by the time you need it you won’t be able to get it.

Providers are required by law to treat you in the event of a true emergency regardless of your ability to pay. That does not mean you are entitled to carte blanche treatment at the same level as those who are paying clients.

In other words, if your condition is life threatening they are required to treat you to the point of stabilizing you and moving you out the door. Beyond that, if you lack the ability to pay they are not obligated to treat you.

If you had a spinal cord injury the hospital & doctors are required to stablize you until the point you can be discharged. However they are not obligated to provide any ongoing treatment or rehab.

If you can pay cash, any willing provider will treat you, at least until the cash runs out.

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August 2, 2006 by bob.

Q. I have Crohn’s disease and no one will offer health insurance on me. What can I do? I can afford $100 - $150 per month in premiums.

A. Very few conditions are truly uninsurable.

In your situation, I can offer you a TRUE major medical plan that covers 100% after the deductible up to $1,000,000. You can add a basic plan that will cover your pre-ex after 12 months and help fill in the gaps up to your major med deductible. This plan will run about $100 per month which fits your budget.

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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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