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Such a loved topic...health insurance premiums.
Just the thought can raise blood pressure faster
than the actual rates seem to go up. Let's
take a closer look and find out why an expensive
plan might not necessarily be the right plan.
It
is a pretty straight forward contract...as long as
you pay the premiums...the insurance carrier will
cover you, but what exactly are we paying for?
Before we take a look at big bills and small
bills...etc...you need to understand a fundamental
truth about health insurance.
If you are getting great benefits for the smaller
bills...believe me...you are PAYING FOR IT. It's
the equivalent to buying a car warranty that also
covers a weekly car-wash, oil change every 3,000
miles, and a new set of tires every two
years....sounds great but the cost would be so
high...no one could afford it!! Health
insurance is very similar...
A simple example (real life) will help explain
this.
Let's
say you have a PPO High-deductible at $47/month
that mainly covers the big bills...any small stuff
will be your responsibility. Compare that to
a 30% PPO plan for $167/month that will cover
right away...leaving you to pay 30%. That
means your doctor visit is going to be pretty
cheap. Remember, it will handle the big
bills pretty much the same.
Now the first reaction to our $47 plan
is..."You mean I HAVE to pay for the doctor
visits and anything else up to $2,250???
That doesn't sound too good!!"
But let's look at it more closely...The difference
in premium is $120/month. That's
$1,440 a year. That's a lot
of small bills you better be having in order to
get any value out of the more expensive plan.
So you're paying a definite $1,440 to cover a
potential $2,250 expense. That's not smart
insurance. You want to pay pennies on the
dollar...i.e. protect with $47/month from a
potential $20,000+ surgery bill.
Some other interesting facts on premiums:
Rate
increases tend to hit the most expensive plans
hardest. Why?? We are now in a period
of extreme medical inflation. As mentioned
in the previous section, managed care (HMO's and
PPO's) did a pretty good job of keeping costs down
but there is only so much they can do and the
results have shown over the last three years.
So with this rate increase, the plans that are
paying the majority of the bills will feel it the
most. Typically it has been the HMO's and
No-deductible PPO's.
Sometimes, a person can save money by splitting up
policies. For example: a family rate
is based on the average...father, mother, 2
children. If you have 1 child and a
significant difference in age between father and
mother...it may be better to have older spouse
alone and other younger spouse and child together.
Try the different options or
tell
us your situation and we will find out the
best option.
Next...the
real reason you buy health insurance...The big
what-if. It sounds ominous but a car
accident can quickly add up to $80-100,000 of
medical expenses. Let's look at how the
plans handle this big what-if...
Next
Page - Section 3 - The Big Bills
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