Monday, April 6, 2009

Health Insurance Bonus: Insurance language red flags

Recently, we talked a bit about ways to get decent health insurance.

And then today, I come across a very pertinent post on the Consumer Reports Health Blog: "Seven Signs a health plan might be junk."

The title says it all, doesn't it? Here are the major categories, but I suggest you go to the blog and read the story (and the soon-to-be-released investigative report) at the site:

Limited benefits
This is a big one since, CR reports, "In most states those phrases might be your only clue to an inadequate policy."

Low overall coverage limits
Have a coverage limit of $25,000 or even $100,000? You're setting yourself up for bankruptcy if you have a heart attack or even if you develop diabetes.

“Affordable” premiums
"There’s no free lunch when it comes to insurance," states CR. "[I]f your insurance was a bargain, chances are good it doesn’t cover very much." Their answer is similar to Randy's: Look into a comprehensive plan.

No coverage for important things
Some policies don't cover prescription drugs or outpatient chemo, CR reports. But most won't tell you. Uh oh.

Ceilings on categories of care
"A $900-a-day maximum benefit for hospital expenses will hardly make a dent in a $45,000 bill for heart bypass surgery," says CR. "Limits on mental-health costs, rehabilitation, and durable medical equipment should be the most generous you can afford."

Limitless out-of-pocket costs
Get specifics from your plan before you sign on to find out if they have a cap on how much you can pay. "Some policies, for instance, don’t count co-payments for doctor visits or prescription drugs toward the maximum," they say. That was my experience with my high-deductible plan. A nightmare.

Random gotchas
"An AARP policy we looked at began covering hospital care on the second day," CR says. "That seems benign enough, except that the first day is almost always the most expensive, because it usually includes charges for surgery and emergency room diagnostic tests and treatments." Ouch.

Head's up fellow freelancers!

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