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Avoid The 5 Deadly Sins of Individual Health Insurance
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1. Purchasing the Wrong Health Plan
Get a Health Plan according to how you expect to use it. Not all Health Plans are the same. The first important thing to do is ask yourself, how have I used a Health Plan in the past and presently and in the future. Do you need maternity, doctor co-pays, prescription co-pay card, a no or zero hospital surgical deductible, chiropractic, emergency room coverage, or vision care? Don’t prepay for coverage’s you don’t expect to use. You can save a lot of money if you purchase a Health Plan without the “fat”.
Do you need a Doctor Co-pay?
How times do you and your family go to the doctor during the year? Do you go to the doctor 1-2 times a month or do you go once a year? You could save 5-15% by eliminating the doctor co-pay option. Typically, the average doctor’s office visit cost $75 - $100 on a “retail cost” basis. If you eliminated the doctor co-pay option, most health plans allow you to receive the network discount for that doctor visit. This is the rate the Health Insurance Company would have paid. That same doctor visit would cost $40-$80.
Do you need a Prescription Drug Co-pay Card?
Same question here as the doctor co-pay - how many prescriptions have received at the pharmacy over the last 2-5 years? Are you or a family member on monthly maintenance medications (i.e. high blood pressure, allergies, etc…)? You could save 15-40% by eliminating the prescription drug co-pay card option. Most Health Plans offer a discount prescription card at no additional cost with their Health Plans. The discount prescription card can be used at most major pharmacies. The discounts range from 5-60% off the retail cost of the prescription.
Higher Deductible
Would a higher deductible justify the savings received? If your family is healthy and no medical procedures are expected a higher deductible plan may be justified. In most cases when evaluating the higher deductible, the premium savings can be equaled in 12-18 months. Hence, if you don’t have a hospital or surgical claim every 12-18 months, the savings are yours to keep.
2. Ask for All Discounts Available to You
Similar to auto insurance, you can qualify for several health insurance discounts - are you a non-smoker, height to weight ratio in good proportion, not currently taking any medications, and in good overall health condition. Some Health Insurance companies are offering Wellness Discounts each year at renewal time. This rewards you for being in good health each year. This discount is rewarded at renewal time if your claims have not reached your annual deductible. Wellness Discount could be up to 10%. This could save $100 - $1,200+ annually.
3. Perform a “Background Check” on your Health Plan Provider
How can you evaluate the “Health Performance” of your current Health Insurance Company? Does your company pay claims quickly and is your company financially strong and will they be there when you need them. There are several ways for you to research the strength and quality of your company or the company your considering. Your state’s Department of Insurance regulates insurance companies for the members of the state. The Department of Insurance has a “Complaint Index” that it maintains for all Insurance Companies that operate in the state. This can be accessed online at www.insurance.state.mo.us/reports/complaints/compindx.htm. You can also call the Missouri Department of Insurance direct for a copy of the report, (573) 751-4126.
There also are insurance rating services:
AM Best - www.ambest.com
Weiss - www.weissratings.com
Standard & Poors - www.standardpoors.com
Moody’s - www.moodys.com
Duff & Phelps - www.duffllc.com
These services evaluate Insurance Companies for the public.
4. Receive 100% Tax Deduction for Most Medical Expenses and More
It is a common fact that small business owners do not realize some of the same tax advantages as corporate employers. They miss out on savings with respect of the treatment of health costs. A Section 105 plan offers qualified business owners a means to deduct 100% of the health expenses and other related expenses: Term Life Insurance ($50,000 max.), Disability Insurance Premiums, Long Term Care Insurance, Dental and Vision expenses. Ask your Health Insurance Agent or Tax Advisor if you quality for the Section 105. Qualified small business owners save on average $400 - $2,000 each year.
5. Perform an Annual Health Plan Checkup
If you receive a 20-40% increase from your health insurance company should you just accept it? No, you should not. Unless you currently have an ongoing health condition and receiving treatments, it could be to your benefit to look at other Health Plans. Insurance Companies introduce new Health Plans every year; one of these new plans could be to your advantage. As your family situation changes (i.e. marriage, new child, new address, etc…), the type of Health Plan you need could change.
Health Insurance Companies “group” individual plans with other small business owners. As that group gets older or matures, healthy individuals leave and go somewhere else. The group has mainly individuals with high claims and rates need to go up significantly to offset the claims coming in.
We Can Help!!! Check Out Our Individual and Group Health Plans Today!
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