Read Before Purchasing Health Insurance
Purchasing health insurance can seem like a daunting (and often times confusing) process. Here are some tips to help you get the best policy that works for you.
#1: Know your prospective provider.
The A.M. Best Company provides ratings of all insurance companies to help those looking for insurance better evaluate their options. In existence since 1899, A.M. Best is the most experienced insurance-rating company in the nation. Ranging on a scale of F to A++, the ratings are as follows:
Be sure to take these ratings into account when choosing an insurance provider!
#2: Make sure the company is clear about how much coverage they are providing.
There are only three parties that can determine how much an insurance company should pay on a claim:
1. The hospital or doctor.
2. The insurance company.
3. An independent 3rd party using gathered data.
The best insurance company to go with is usually one that pays for Usual and Customary Charges based on data from independent researchers. Be wary of companies that use wording such as reasonable charges, prevailing charges, average charges, permissible charges or regular charges. This language is purposely vague and allows the insurance company to pay whatever they see fit.
#3: Get a plan that does not limit who can treat you.
Be sure your plan covers multiple doctors and does not limit your treatment possibilities. Don’t get confused by tricky wording (i.e. “surgeons’ fees” as opposed to “surgeon’s fees”). Make sure your agent clarifies all verbiage before you sign anything.
#4: Make sure your plan covers ALL medically necessary procedures.
If you undergo a procedure that is not listed in your policy as being covered, then it will not be covered, even if it is deemed medically necessary by your doctors. The only exception to this rule is if your policy explicitly states “…and [it covers] all other medically necessary hospital expenses.” Be sure to check with your agent to include this coverage.
#5: Know how your provider covers pre-existing conditions.
Most health insurance companies require a waiting period of 24 months before any pre-existing conditions are covered. In some cases, the waiting period may be waived if you’ve satisfied waiting period requirements on a previous policy. Companies may charge more to cover pre-existing conditions or may exclude your pre-existing condition from coverage, so make sure you know a company’s policy before you sign with them.
#6: Buy a plan that cannot single you out for rate increases.
Rate increases are standard practice by all insurance companies to offset inflation or losses on claims. However, you should not purchase a plan that subjects you to rate increases based on your age or health status. Instead, make sure the company implements rate increases in a consistent manner to all policyholders at the same time.
#7: Purchase coverage to match the rising cost of medical care.
Make sure the dollar limits on your policy is sufficient enough to cover major individual or family illnesses. Do not buy a policy that is outdated and leaves you underinsured. Many companies now provide $1 million - $2 million in coverage for each injury or illness with a $3 million - $5 million lifetime maximum for the entire family.