If you are looking to buy health insurance in today's poor economic climate then here are 5 five things that you must watch out for.
1. Does your health plan give you cover both on and off the job?
Many health insurance policies have specific exclusions that eliminate your benefits for anything that could have been covered by Workers Compensation or a similar law. Now take a moment to read that last sentence once again and pay close attention to the phrase 'could have been covered'. That is correct, most self employed individuals and even a few small business owners don't carry Workers Comp on themselves.
There are specific insurance policies that will cover you on and off the job 24 hours a day, as long as the law doesn not require you to have Workers Compensation coverage.
2. Are you writing off your health insurance premiums?
Home based business owners, independent contractors (1099's), professionals and a lot of self employed people do not take advantage of the current tax laws.
A lot of people who are paying all of their own costs are entitled to deduct their monthly insurance payments. This by itself can lower your net out-of-pocket costs by as much as 40%. Ask your accountant whether you are eligible or check out the IRS website to get more information.
3. Look closely at any policy's internal limits
All health insurance plans use some sort of internal controls which determine how much the company is prepared to pay out for a specific procedure or service. Here there are two basic methods:
A. Scheduled Benefits
Many plans, some of which are specifically marketed to self employed and independent individuals, have a detailed schedule of how much they will pay per visit to the doctor, stay in hospital or even what payment limits are imposed for testing within a 24 hour period. This sort of structure is generally associated with 'Indemnity plans'. If you are presented with one of these policies make sure that you see the schedule of benefits in writing. It is important that you understand these type of limits up front because once you reach them the company will not pay any expenses above the stated amount.
B. Usual and Customary Expenses
'Usual and Customary' refers to the rate of pay out for a doctor office visit, hospital stay or procedure that is based upon what most physicians and facilities charge for that particular service in that geographical or comparable area. 'Usual and Customary' charges also represnt the maximum level of coverage on most major medical plans.
4. Don't forget that you are able to shop around
If you are reading this you are probably shopping for a health policy.
Each day people shop for everything from groceries to a new house and during the shopping process value, price, personal needs and general market conditions are evaluated by the buyer. Bearing this in mind, it seem very strange that the majority of people never ask what a procedure, test or even doctor visit is going to cost. In this constantly changing insurance market it will become more and more important for these questions to be asked. Inquiring about price will help you get the most from your plan and reduce your out-of-pocket expenses.
5. Pay attention to networks and discounts
Nearly all insurance firms work closely with medical networks in order to access discounted rates. In broad terms, networks are made up of of medical professionals and facilities who contract to charge discounted rates for services rendered. In many cases the network is one of the defining properties of your program. Discounts will generally vary from 10% to 60% or even more.
Medical network discounts do vary but to make sure that you minimize your out-of-pocket expenses, it is imperative that you preview the network's list of physicians and facilities before you commit yourself to a policy. This is not only to make sure that your local doctors and hospitals are included in the network, but also so that you can see what your options would be if you were to need a specialist.
1. Does your health plan give you cover both on and off the job?
Many health insurance policies have specific exclusions that eliminate your benefits for anything that could have been covered by Workers Compensation or a similar law. Now take a moment to read that last sentence once again and pay close attention to the phrase 'could have been covered'. That is correct, most self employed individuals and even a few small business owners don't carry Workers Comp on themselves.
There are specific insurance policies that will cover you on and off the job 24 hours a day, as long as the law doesn not require you to have Workers Compensation coverage.
2. Are you writing off your health insurance premiums?
Home based business owners, independent contractors (1099's), professionals and a lot of self employed people do not take advantage of the current tax laws.
A lot of people who are paying all of their own costs are entitled to deduct their monthly insurance payments. This by itself can lower your net out-of-pocket costs by as much as 40%. Ask your accountant whether you are eligible or check out the IRS website to get more information.
3. Look closely at any policy's internal limits
All health insurance plans use some sort of internal controls which determine how much the company is prepared to pay out for a specific procedure or service. Here there are two basic methods:
A. Scheduled Benefits
Many plans, some of which are specifically marketed to self employed and independent individuals, have a detailed schedule of how much they will pay per visit to the doctor, stay in hospital or even what payment limits are imposed for testing within a 24 hour period. This sort of structure is generally associated with 'Indemnity plans'. If you are presented with one of these policies make sure that you see the schedule of benefits in writing. It is important that you understand these type of limits up front because once you reach them the company will not pay any expenses above the stated amount.
B. Usual and Customary Expenses
'Usual and Customary' refers to the rate of pay out for a doctor office visit, hospital stay or procedure that is based upon what most physicians and facilities charge for that particular service in that geographical or comparable area. 'Usual and Customary' charges also represnt the maximum level of coverage on most major medical plans.
4. Don't forget that you are able to shop around
If you are reading this you are probably shopping for a health policy.
Each day people shop for everything from groceries to a new house and during the shopping process value, price, personal needs and general market conditions are evaluated by the buyer. Bearing this in mind, it seem very strange that the majority of people never ask what a procedure, test or even doctor visit is going to cost. In this constantly changing insurance market it will become more and more important for these questions to be asked. Inquiring about price will help you get the most from your plan and reduce your out-of-pocket expenses.
5. Pay attention to networks and discounts
Nearly all insurance firms work closely with medical networks in order to access discounted rates. In broad terms, networks are made up of of medical professionals and facilities who contract to charge discounted rates for services rendered. In many cases the network is one of the defining properties of your program. Discounts will generally vary from 10% to 60% or even more.
Medical network discounts do vary but to make sure that you minimize your out-of-pocket expenses, it is imperative that you preview the network's list of physicians and facilities before you commit yourself to a policy. This is not only to make sure that your local doctors and hospitals are included in the network, but also so that you can see what your options would be if you were to need a specialist.
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