Personal Health Insurance Considerations

Personal health insurance considerations apply to coverage for individuals and for families. It can also apply to the self employed who do not have enough employees to qualify for a group plan. Two related areas you may want to take into account are Cost Factors and Underwriting Standards.

Beyond these factors of applicability, cost and underwriting standards, you should direct careful thought toward Types of Benefits, Plan Coverage Designs, Marketplace Factors, Insurer Policies and You – Your Situation and Objectives. These are the areas we’ll cover here.

Types of Benefits:

To analyze plan designs for personal health insurance considerations, let’s start with eight Types of Benefits, which are available to some degree in almost all plans from most insurers. These benefits include:

Doctor Visits- Low copays are a major factor that increases premium cost. Most patients go to the doctor two to four times a year. Waiving copay benefits could result in big premium savings that offset copay costs. Always check that option. Many people waste money on high premiums to get first dollar benefits they could afford to pay themselves;

Lab and X-ray Services- For most, these are affected by deductibles and coinsurance factors. If you pay directly as part of your share, pre-determine prices and be alert for “phantom costs”;

Hospital (Inpatient) Services- Be aware of higher deductibles and be alert for phantom and miscellaneous charges, if this is a deductible item that you pay. Do not assume hospital charges are correct. Check them;

Outpatient Services- These charges usually have a higher deductible. Same considerations as for inpatient;

Lifetime Maximum Benefits- You need to insure against the worst case scenario that you cannot afford. That principle of insurance usually offers the best cost-value result;

Optional Specific Services- Covers special non-ordinary needs such as Maternity, Cancer, etc;

Prescriptions and Drugs- Same copay and coinsurance factors apply. Seek generic options to get best value, lowest cost, and;

Fitness Programs- In recognition that about 70 percent of our illnesses are due to obesity, smoking and poor fitness, many insurers sponsor a wellness program. Some have a waiting period to start paying, many are not as extensive or convenient as our Fitness Culture program.

Plan Coverage Design:

To look at plan coverage designs, we’ll review a spectrum of eight classes of plans which offer different degrees of personal insurance coverage considerations. These include:

Limited Benefit Plans- Usually offer basic medical coverage, but limit surgical, hospital, outpatient, maximum benefits and some specific services. Some insurers offer a basic plan, a better plan and a best plan, with increasing benefits and maximums. The insurer's objective is to offer reasonable premium by limiting coverage for known pre-existing conditions, but while covering other services. Not as benefit rich as comprehensive major medical plans;

Low Cost Comprehensive Major Medical Plans- These are basic traditional major medical plans with minimal copay coverage, longer waiting periods, increased deductibles (but not high deductible), and reduced maximum benefits. An entry level plan at reduced premium. A good choice for younger insureds;

Mid-Cost Comprehensive Major Medical Plans- A moderately rich comprehensive traditional plan at middle cost premium rates. Probably features optional benefits at increased cost. This usually will be an insurer’s most popular plan, designed to offer a good personal insurance value for young to middle aged families;

Best Benefit Comprehensive Major Medical Plans- A luxury comprehensive plan with high limits and early dollar coverage. High premium for rich benefits. Designed for insureds who want no hassle, no problem coverage and will pay for it. Contrary to insurance principles, so not a best value;

High Deductible Tax Benefit Plans- Consumer directed high deductible plans that qualify for participation with Health Saving Accounts. Usually available with high maximums to cover potential catastrophic loss. The best cost to value plan design for active personal health insurance consumers;

Short-Term Health Plans- This is limited medical benefit coverage for periods up to twelve months. Moderate maximum limits. Designed for people between jobs, for college graduates seeking a job, for a lower-cost alternative to COBRA, for early retirees not yet qualified for Medicare, and for seasonal or temporary workers. Excellent option for short periods, but usually excludes pre-existing conditions;

Impaired Risk or Pre-Existing Conditions Plans- For people who have a condition that is usually rejected as uninsurable, and in the event they are not eligible for a Medicaid or state guaranteed-issue risk pool, an Impaired Risk Plan offers limited coverage, usually written as a Limited Benefit Plan. A good option for those with few options.

Marketplace Factors:

These mean the quality of the product or service, the cost and the relative value factors for the healthcare consumer.

Quality: The quality of US health insurance has deteriorated due to an employer-centered model that used traditional early dollar coverage plans. It insulated health consumers from cost and responsibility for their healthcare and wellness. The result was the sickness culture that caused over-use, high claims and out-of-control costs.

In an effort to limit and control costs, insurers turned to managed care plans. These have made progress in limiting costs, but at the expense of quality. For all healthcare models – HMO, PPO, Government Controlled Healthcare or any other – controlling costs ultimately comes down to rationing services and / or reducing quality.

The best alternative is Consumer Directed Healthcare in which the patient assumes the proper role as the final decision maker of acceptable quality and acceptable cost.

Cost: Out-of-control personal health insurance costs are a result of healthcare consumers not minding their own business. They have not applied normal buyer cost restrictions on the healthcare services they get. In their minds, insurance benefits are not their money. It’s free to them, and they are due it. So, they will spend it without reservation. The same mindset applies to government-controlled healthcare, like Medicare, with the same result. Ultimately, out-of-control costs.

How To Reduce Health Insurance Cost: You can reduce personal health insurance premium cost, and your overall healthcare cost, by assuming more responsibility yourself in the areas that involve less risk and lower cost. These areas are deductibles, copays, and co-insurance factors. They apply to early dollar benefits for which premium costs are high. Since more than ninety percent of insureds never reach the low annual deductible limits for which they pay dearly, they overpay for false peace of mind.

Personal health insurance premiums have increased at double digit rates annually just to cover higher claims cost. In an effort to avoid premium sticker shock, insurance companies are offering several basic price alternatives. For traditional plans that have lower deductibles and copays, premiums must be higher. Some insurers are offering multi-year plans with marginally-higher first year premiums, but that will be followed by significant premium increases in subsequent years.

Other insurers are offering traditional multi-year plans that have higher, but not shockingly higher, first year premiums. In subsequent years, premium levels, and perhaps deductible decreases, are governed by a formula that credits insureds for low claims experience. This is a step toward consumer control and offers lower cost.

The lowest cost health plan alternatives are tax benefited high deductible consumer controlled plans which put insureds in control of their healthcare expenditures and their wellness.

Value: For personal health insurance considerations, we define value as the optimal combination of quality and cost. It’s different for each person. The best value for you depends on your priorities. Which is more important to you – time or money? If money is no issue and you are willing to spend it to save time, a best benefit traditional low deductible comprehensive healthcare plan could be your best value.

If money is more important than time, you might prefer to spend time to save it. In that case, a high deductible consumer controlled plan, with a health savings account tax benefit, is your best bet. Determining your priorities will lead you to your best personal health insurance value and to peace of mind.

Insurer Policies:

Insurer policies cover an insurance company’s plans, service provider networks, administration, financial stability, and claims system. Health insurance consumers are primarily concerned with the suitability of the insurance plan and of the provider network. Most rely on regulatory authorities to scrutinize financial issues. They tend to ignore administrative concerns. Since claims issues are few and far between for most insureds, they seldom give a second thought to an insurer’s claims policies, processing and payment record.

With some insurers, claims disputes, delays and disapprovals are much more frequent than consumers would imagine. This can be an issue for insureds, a huge problem for some. Half of the personal bankruptcies in the US result from medical expenses the patient could not pay. Seventy-five percent of those bankrupted patients had health insurance that should have given them relief. They just did not or could not promptly collect on their insurance policy.

The claims issue warrants two safeguards. First, look at an insurer’s claims record and try to avoid an insurance company with a poor record. Second, get a Patient Care plan, such as we offer with our Fitness Culture program, to help you with any claims dispute problems.

You – Your Situation and Objectives:

In the above section on marketplace value, we talked about the need for you to evaluate your priorities as to what is important to you in your personal health insurance considerations. Our value proposition was expressed as a time versus money equation. Now, we will introduce two other considerations to your process. The first is your personal or family health situation and what you can do to improve it.

As we age, the wear, tear and behavior take a toll. We experience health issues and problems. About seventy percent of our health problems - obesity, smoking and poor fitness – are caused by risky behavior and bad habits. Most underwriting standards penalize these habits and conditions. They are correctable if you take charge of your health and pursue a wellness lifestyle. The result can be improved underwriting standards and lower health insurance costs.

The second other consideration is minding your healthcare affairs. No one is more concerned than you are. No one will do it better than you will, if you know how. Our purpose here is to show you how and to offer programs of assistance.

To secure a Personal Health Plan Quote, go to the Individual Quote Page Guide or the Family Quote Page Guide, or the Group Quote Page Guide, as appropriate, plus the Health and Fitness Plan Request for a Personal Plan or a Group Plan. Complete and send us your quote requests for a quick response.

For ideas on Fitness Culture, go to Fitness Culture.

For information on Medical Self Care Prevention, go to Self Care Prevention.

For information on Medical Self Care Affairs Management, go to Self Care Management.

For information on Patient Care, go to Patient Care Plan.

For information on HSA’s, go to HSA's.

For information on personal health plan cost factors, go to Cost Factors.

For information on personal health plan underwriting standards, go to Underwriting Standards.

If you have questions or need additional information, go to our Contact Us Page.

WARNING: NEVER CANCEL YOUR CURRENT INSURANCE UNTIL REPLACEMENT COVERAGE IS APPROVED AND IN PLACE.