Info Before Buying| Ten Tips for Buying Insurance| How to Buy Health Insurance


 Important Information:

Read Before Purchasing Health Insurance


Info Before Buying

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:

A++ and A+ (Superior)
A and A- (Excellent)
B++ and B+ (Very Good)
B and B- (Adequate)
C++ and C+ (Fair)
C and C- (Marginal)
D (Very Vulnerable)
E (Under State Supervision)
F (In Liquidation)

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.

Other important factors to consider:

As always, contact me today to discuss how I can set you up with a policy from one of the nation’s leading health insurance providers.

Ten Tips For Buying Insurance

Many business owners dread the process of purchasing insurance. It is not uncommon for an insurer to demand tons of information, and then decline to offer a policy. The process may seem to waste valuable time and resources. However, insurance is a necessity and it's worth the hassle to do it right.

The first thing to do as a business owner is to put yourself in the right frame of mind. Start by understanding why you need the insurance: 

Next: Commit yourself to handling the details. Underwriters can only base an underwriting decision on the information they have available. If you are inattentive to details, the underwriter will not have the information available to make an informed decision. 
  1. Give the underwriter a reason to write the account. Each underwriter has basic underwriting guidelines, but these guidelines do not, and cannot, address every situation that is likely to arise. Emphasize your organization's good works, prevention and risk reduction programs, and professional operation. Give the underwriter a reason to fit your organization into the guidelines, and to make an exception for your organization if necessary. 
  2. If you have a renewal quotation for an existing policy, say so. Give the underwriter a baseline from which to start. Let him/her match or beat the other quotation. Use the other quotation to negotiate more favorable terms.
  3. Build in time for an underwriting review. If you send the insurance application to the underwriter well in advance of the desired coverage date, the underwriter has a chance to review the submission and ask questions. The lead time also gives your organization a chance to understand the features of the insurance product, to solicit competing quotations, and to compare competing terms. 
  4.  Complete the application! Every question on an application form is important to the insurance company. An incomplete application will either be declined outright or sent back to your organization for completion. A quick glance will save a lot of time in the long run. 
  5. Attach all supporting information. An insurer will consider its requested information to be important to accurate underwriting. List the enclosed items in your cover letter and ensure that each item is in the package prior to mailing. 
  6.  Provide accurate and truthful information, preferably in writing. False information may only be discovered by the insurer when you file a claim. By then, the insurer is generally within its rights to deny coverage, and your organization is deprived of the protection that it thought it had paid for. 
  7. Anticipate questions and answer them up front. In consultation with your insurance agent, provide any necessary explanation for the answers on the application and unique exposures that your organization may have. In a single submission, give the underwriter sufficient information to evaluate the risk. 
  8.  Promptly respond to requests for information. A prompt response not only saves time, but it highlights your organization's professionalism and willingness to cooperate. 
  9. Negotiate quotation terms with respect. A clearly unacceptable quotation may result from an honest mistake, unreasonable underwriting guidelines, or a misunderstanding about the risks involved in your operations. While you should question the basis of the quotation and try to alter the terms, do so in a way that will not alienate the underwriter. Give him/her a chance to act reasonably. 

How To Buy Health Insurance

12 Tough Questions to Ask your Agent

  1. What is the coinsurance limit?  What is the total annual out-of-pocket cost for covered services?
  2. What happens if I go to a doctor or hospital that’s not on the “preferred” list?
  3. Are managed care discounts passed along directly to members?
  4. Can employees pick a plan design?
  5. Are customer service people available in the evenings or on weekends?
  6. Is the carrier’s utilization review program accredited?
  7. If I have a significant illness, will I get to talk to the same nurse every time I call the insurance company, or will I  talk to someone who uses their computer to check what’s been done up to that point?
  8. Will I have to fill out claim forms?
  9. What is the carrier’s A.M. Best rating?
  10. What happens if I want to hire someone who has a recent history of significant illness or who is currently undergoing treatment?
  11. How much experience does the carrier have dealing with small businesses (fewer than 10 employees)?
  12. Do they handle other employee benefits that I need?

What is the coinsurance limit?  What is the total annual out-of-pocket cost for covered services?
 Most managed care plans require their members to pay a small percentage of the charges beyond the deductible, up to a point.  For example, you might pay a $500 deductible, plus 10% of the next $2,000.  Your deductible plus your coinsurance limit is the point where your health plan takes care of all covered charges - - in this case $2,500 - - up to any policy limit.  And your out-of-pocket maximum for any year is the deductible plus 10% of $2,000 - - or a total of $700.

What happens if I go to a doctor or hospital that’s not on the “preferred” list?
If you’re in a health maintenance organization (HMO), you probably have to pay on your own for any medical care from doctors or hospitals not on the list (or “panel”) for your HMO.  While you lose freedom in an HMO, you gain a lot more benefits for the money.  Many other types of managed care health plans, however, provide some coverage for care from doctors and hospitals not on the preferred list.  Preferred provider organizations (PPO) do this, often requiring the member to pay a higher coinsurance percentage - - say 30% instead of 10% - - for out-of-plan care.  This results in a higher out-of-pocket maximum for that year.  Another type of plan is an “elect provider organization” (EPO), in which, as with an HMO, members designate their primary care physician as a “gatekeeper.”  But unlike an HMO an EPO provides some coverage for out-of-plan care, in the same way a PPO does.  An EPO is sometimes called a “point-of-service” (POS) plan.

Are managed care discounts passed along directly to members?
 Managed care companies in most cases negotiate price discounts with doctors and hospitals.  Your surgeon may have a “list price” of $2,000 to perform a minor surgery, for example, but he or she may have an agreement with your insurance carrier to charge only $1,500 for its members.  Make sure your out-of-pocket expenses are based on the discounted price.  Some carriers would pay benefits as if you paid list price.  That is, they expect you to pay 10% of $2,000, even though the actual charge was only $1,500.

Can employees pick a plan design?
These days, even the smallest of businesses can often get a health care plan in which individual employees can select from a menu of benefit options, including deductibles and coinsurance percentages.  In many cases each employee can even pick for him or herself whether to go with an HMO, EPO or PPO.

Are customer service people available in the evenings or on weekends?
Make sure the carrier answers that 800 number when it’s convenient for you.

Is the carrier’s utilization review program accredited?
Most managed care plans require members to check with a nurse at the insurance company before checking in to the hospital, or when incurring managed medical expenses.  This is known as “utilization review” (U.R.)  Make sure your plan’s utilization review program is accredited by the Utilization Review Accreditation Committee (URAC), a national standards board that reviews U.R. systems to safeguard consumers.

If I have a significant illness, will I get to talk to the same nurse every time I call the insurance company, or will I talk to someone who uses their computer to check what’s been done up to that point?
As part of the utilization review process, many carriers employ “case managers.”  You’ll want to be assigned to one case manager if your case gets complex and expensive.  You’ll come to appreciate this nurse’s familiar voice, and the fact that she or he knows you, your situation and your local health care scene.

Will I have to fill out claim forms?
Some carriers require members to fill out claim forms, while others simply have their members show an ID card that allows the clinic or hospital to take care of all the paperwork.  We recommend the latter.

What is the carrier’s A.M. Best rating?
An “A” (excellent) rating from the independent insurance rating firm A.M. Best Co. is a positive indication that the insurer will have the money to meet its obligations into the foreseeable future.

What happens if I want to hire someone who has a recent history of significant illness or who is currently undergoing treatment?
Ask whether your carrier offers “portability,” meaning a person currently undergoing treatment or who has recently been treated will not be prevented from getting coverage for the at condition under a pre-existing condition clause, assuming they are transferring over from another health plan.  In some states portability is required by law.  In other states some carriers offer portability voluntarily. 

How much experience does the carrier have dealing with small businesses (fewer than 10 employees)?
Small businesses have special needs because they generally don’t have a personnel department or benefits mangers.  If you’re in a small business, you need to think of your carrier as your benefits manager.  Make sure their experience shows they’re up to the task.

Do they handle other employee benefits that I need?
Dental plans are becoming a “must” to attract the very best segment of the labor pool.  Now small businesses can easily set up flexible spending accounts (Section 125 plans) that allow employees to pay for things like uncovered medical costs, vision care and daycare using pre-tax dollars.  This can often be done at no cost to employers.  Group term life policies are becoming a very popular and very affordable employee benefit.  Make sure your health carrier can provide all of these benefits - - if not today, as your business grows.

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