Monthly Archives: November 2008

How do I know what good coverage is when comparing health policies?

The magic question!  Believe it or not, we do believe that there are some simple ways to narrow the search. When shopping for health insurance, remember that you are looking for protection, not to save $10.  

Here’s a quick check list. 

  • Start with coverage, not the deductible or premium. 

  • Insist on coverage for prescription drugs, particularly Injectables being covered without an annual limit. 

  • Figure out what it would cost you for: .

    • A $100 doctor visit at a preferred doctor.

    • What if the doctor did $200 of lab work at the office.

    • What it would cost you if you sprained your ankle and went to the ER and had a charge of $800.

    • What it would cost you if you had a $50,000 claim.

  • How $3000 of physical or occupational therapy would be covered after your surgery.  (assume the same year as your surgery)

  • Are my providers and hospitals in the PPO network?  If not, pick a different plan. 

  • If I need $20,000 of Injectables drugs, how much would it cost me? 

  • If I take three, $100 retail, name brand drugs, per month, what would I pay if I already met my deductible? 

  • Ask the agent how long they have been licensed.  Not saying that a rookie won’t sell you a good plan, but you’re probably going to get better advice from a professional.  

  • If you have questions, have the agent give it to you in writing.  

If you have a good grip on the answers to these questions, you can make a good value decision.  Please remember that you don’t worry about $10 or $20, worry about $1000, $10,000, or $50,000.   You don’t need to insure your windshield wipers, you need to insure the car.  

What is a COCC? Why do I need it? Why is it important?

A COCC is a Certificate of Creditable Coverage.  This is the proof that you need to provide when you change carriers to prove that you had coverage.   When you leave employment, or your employer changes carriers, a child or spouse drops off coverage, you will receive a COCC.  It is very important for you to hold on to this document for a period of 18 months.  When you change group/employer sponsored health carriers, the law mandates that your new carrier provide credit for your preexisting conditions if you have had continuous coverage for the past 18 months or more.  Many individual plan carriers provide the same credit if you have prior, uninterrupted coverage.     

If you are changing individual coverage, a certificate of creditable coverage is not issued.  Even so, group and individual carriers frequently offer credit for preexisting conditions if you had prior coverage.  Bottom line on this subject is to keep a good record of who was covered, during what periods of time.

Michelle’s Law (HR 2851) -Student Medical Leave

On October 9, 2008,  President Bush signed into law a requirement that insurance policies allow college students who are on their parents health plan to take a medical leave of absense of up to 12 months.  This new law DOES NOT TAKE EFFECT until October 9th, 2009.   

Under current law, if a child lost full time student status, the child would also lose eligibility for coverage under a parents health plan.  

Several states had already passed this provision, check with your local carrier or broker to see if your State already has this legislation in effect. 

Q. – There has been a lot talk about insurance companies going under. How do I know if my insurance is at risk?

Insurance companies whose primary business is health carry securities on their balance sheet that are shorter term in nature than a company whose primary business is life insurance or property and casualty.   Health insurance carriers take the $1 in and immediately pay out $0.80 of that dollar.   Life insurance companies take in a dollar with the intention of paying out the claim at a much later date.   Health Insurance companies are far more liquid and flexible with their portfolio thus they, for the most part are not affected by the long term debt obligations, tied to mortgage backed securities, as other types of insurance companies.   Additionally, health insurance policies are regulated by State governments and the State, backed by a pool of the rest of the insurance carriers, guarantee that coverage in case a carrier does go insolvent.   Now sometimes insurance carriers, whose business is health, do close or go insolvent.   Many of these carriers did not have an AM BEST rating, ( since they did not buy a rating from AM Best to sell their commercial debt to the public, so you couldn’t judge the financial health of the carrier, or would have a rating not indicative of it’s ability to operate.,(formerly Weiss Ratings) rates insurance companies based on public information filed in States and, in our opinion, is an excellent tool to compare carriers.   Don’t look for an A+ rating from any of the health carriers.  A grade of C+ or better is, in our opinion, safe to do business with.