Get Informed, "Get In The Know"
(3 Misconceptions Consumers Make when Choosing a
Health Insurance Plan)
Whether you own a small business out of your home, or run your small business from a retail location, finding quality, affordable health insurance for you and your family can be tough. You've heard from others that a small deductible is best, or maybe a lower doctor's co-pay is better. What about co-insurance? You might ask yourself what is it? I've found that there are 3 big misconceptions when it comes to purchasing health insurance, arm yourself with the facts so you don't get burned next time you're looking for health insurance.
Misconception #1: Co-insurance
Co-Insurance levels should be given careful analysis when buying individual or
family health insurance. A health insurance plan premium with an 80/20 or 20% co-insurance level is
typically lower than is 100/0 or 100% plan. Co-insurance or shared costs between the insured and the insurance company normally have stop losses or Maximum Out-Of-Pocket amounts to protect you against a catastrophic event. Make sure there is, and you know what the stop loss is on the plan you are looking at. Let's further examine and break down co-insurance.
Example:
Health insurance plan A has a $2,000 deductible and is an 80/20 plan.
(Meaning you co-insure 20% after your deductible of $2,000)
Let’s say your stop loss
(maximum out of pocket) is
$3,000. (which means you're total out of pocket would be $5,000)
and the plan costs $380 per month for a family of 5.)
On the other hand health insurance plan B has a $5,000 deductible but is a 100% plan.
(Meaning you have no co-insurance after your deductible of $5,000)
Your stop loss (maximum out of pocket) is zero after your deductible and this plan costs you $290 per month.
Both plans have 100% coverage after your stop loss,
(maximum out of pocket) has been met.
Your stop loss (maximum out of pocket) for plan A would be $5,000 per year.
($2,000 deductible + $3,000 co-insurance).
Your stop loss (maximum out of pocket) for the plan B would be $5,000 per year as well.
($5,000 deductible + $0 co-insurance).
Your total risk "potential loss" or exposure would be $5,000 in any given year on either plan.
So in this example, on plan A you would be paying an extra $1,080 per year for the exact same out of pocket catastrophic exposure compared to plan B.
Wouldn’t it make more sense financially to select plan B as opposed to plan A? When it comes to choosing a health plan these are the things most people overlook, or fail to understand. When you choose Colorado Health Solutions to represent you, we will inform and educate you of these types of things to make sure you select the right plan at a price you can afford.
Misconception #2: Deductibles
Health insurance companies will charge you a "fool's premium" for a very low deductible. By "fool's premium" we mean that to lower your deductible from say $2,000 to $500, they will charge you an additional $2,880 a year. So unless you manage to have a catastrophic event in the first 6 months of your plan, you will always be the loser. Look carefully at the cost for different deductibles and ask yourself a couple questions:
- How much does it cost for the next lowest and the next highest deductible?
- How many months will it take before you have lost the advantage of the lower deductible by paying the difference in Health Insurance premiums?
Of course you could wind up in the hospital next month and call me up with an "I told you so". However, 99% of you will never reach your deductible. There is normally a trade off between costs and benefits and typically it's represented graphically by a curve of "diminishing returns".
Misconception #3: Co-pays
A $20 doctor office co-pay is much more expensive than a $40 doctor office co-pay! How you ask? Let’s take a closer look.
Let's assume that the premium associated with a $20 co-pay is an additional $174 per month in premium for a family of 4 when compared to a $40 co-pay.
(This is a real scenario)
In this scenario you would be paying an additional premium of $174 per month
($2,088 per year) to protect yourself against a "potential loss" or exposure of $20 each time you visited the doctor’s office. To come out even with the $20 co-pay you'd have to visit the doctor about 105 times a year to come out even! Don't pay a "fools premium" for benefits that are offset by increased premiums. It pays to do a little math when looking at cost versus benefits when purchasing health insurance. Again we can help you decipher this and choose the right plan.
We hope this will help you now or sometime in the future, what we tell
our clients is this...You already pay enough for your health insurance, don't pay more than you have to!
Health insurance carriers are coming out with new more affordable Health Insurance plans all the time, how will you know if one is right for you? Would your agent call you if there was one better suited for your needs? Most likely not! Most agents/brokers will only talk to you if there is something in it for them!
We here at Colorado Health Solutions have a
completely different attitude and approach.
The day you become one of our clients, if there is
plan or product that becomes available that could
put you and your family in a better situation we will let you know!
There has been a new major medical plan that was just released that is on average 20-40% less than many of the other carriers. If you'd like to get a quote on this plan to either get health insurance or lower your premiums just
click here, we'd be happy to help. Again, don't pay more than you have to when it comes to your individual or family health insurance!
Regards,
Kris J. Willy
Health Insurance Guru
Colorado Health Solutions
720.920.9697 Office
866-245-5035 Fax
www.ColoradoHealthSolutions.com
Kris@ColoradoHealthSolutions.com
This article has been published at the following website: http://www.EvanCarmichael.com
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