How do you know if you're getting the best health insurance bang for your buck?
Is a health insurance check-up on your financial to-do list for 2013? Whether your employer offers you a couple different plans to choose from, or you pay out of pocket for your own policy, how do you know if you’re getting the most for your money?
Health insurance expert Katherine Woodfield provides 10 tips on how to navigate the sometimes confusing lingo, mathematic calculations and insurance coverage options to help make sure you’re getting the best deal on health insurance.
1. Call your family's doctors.
Ask for the office manager and find out if there are any providers or any plans that they do not accept. While the office manager may suggest plans they prefer, understand that they’ll prefer plans that pay higher. Since you’ll want to choose a plan with the lowest premium, note that the provider’s suggestions may not be in your best interest.
2. Find out the cash payer cost of a routine sinusitis or bronchitis visit.
If you have $50 co-pay and the doctor would charge a cash paying patient $75 for the same visit, you are paying most of the cost of the visit already. This knowledge will become helpful later in this article as we discuss "costing out" your options.
3. Call or visit your pharmacy.
If there are maintenance medications you fill every month, call and ask the pharmacist how much the retail price is for those prescriptions every 30 days. Sometimes co-pays are actually higher than the retail cost! Also, if you are going to be filling the prescriptions from a mail-order pharmacy, you’ll be purchasing the medication 90 days at a time. Remember the day count when comparing prices.
4. Call or visit two other pharmacies.
Now that you have one pharmacy's retail price, you may be surprised to learn that there are no set costs for prescriptions. I have seen price swings of up to $50/month on commonly used generic prescription drugs. If you are going to be filling prescriptions every month, you may want to pick up different products from different stores.
5. Do you even need or want prescription coverage?
Once you have collected your prescription data, work out how much it would cost you each month if you paid cash for your prescriptions. If that number is very small (say $60/month) and the insurance plans you’re considering are charging $200/month for their prescription benefit, consider "carving out" or not buying the prescription coverage. By the time you add in co-pays and premium rates, you may realize that you will save money purchasing prescriptions as you go.
6. Health Care Reform has mandated that insurance companies pay 100% before co-pay and deductible for all preventative care.
This means that childhood vaccinations, routine well visits and adult well care should not require a co-pay. You want to choose a plan that shows $0 for all those visits even when it has a deductible.
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7. Don't be afraid of a deductible.
Do the math - if your premium is $4,000 less per year should you add a $2,500 deductible, then lean toward the deductible. Even if you spend the full deductible, you are still ahead by $1,500. If you are healthy, you’ll want to consider betting on yourself to save big money here.
8. Be wary of "hidden deductibles".
Many insurance plans charge a relatively low out of pocket office visit co-pay but have a $2,500 deductible if you are admitted to a hospital. The hidden hospital deductible is really where the out of pocket risk is. If the plans you are considering have a hidden hospital deductible, you may be paying more in premium than a higher deductible plan and end up straddled with a $2,500 hospitalization deductible on top of higher premiums.
9. Do the math.
Work out all of your annual predictable costs. Consider the free annual visits and look back at last year. How many prescriptions did you fill and what was the retail cost? How many times did you go to the doctor for routine sick visits and what would have been the retail cost? If this predictable number is significantly below the plan with a deductible and that alternative saves you several thousand dollars, it might be the right plan for you.
10. Ask for an expedited copy of the contract.
Only with health insurance do you send in your money first and get the terms of your contract second. In most states, consumer protection laws give you two weeks to 30 days to change your mind, cancel your insurance and demand your money back after you have received the contract. When you’re buying the insurance, make sure to ask how long you have to rescind your coverage and demand a refund in the event that you don't like the contract. Look at the contract and make sure you feel comfortable with the terms. If you don't understand anything, call the insurance company and ask someone to explain it to you. Keep asking until you feel comfortable with the answer.
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