Sober thoughts about health insurance from an honest agent and (like you) a policyholder:

Once upon a time, people bought health insurance through insurance companies (and their agents). They all had what was called an Indemnity policy. This meant their physician ordered tests, and they paid an annual deductible and up to 20% coinsurance. The doctor-patient relationship was personal.

In the eighties, costs for health care grew more than anyone could imagine. This was due to many reasons (all still here). A few of these were the fact that we are living longer, AIDS, gang warfare, and the costs of the uninsured. Businesses and carriers thought a lot about what might reduce their costs. It seems reasonable.

Enter the concept of Managed Care. In an effort to maintain costs, a system has emerged that at least started with a good idea. You could visit a facility where tests, results and specialists were all close by. Doctors, like everyone else in any medical facility, were on salary.

Since the nineties, an indemnity policy is a rare thing.  Now most people have a form of managed care, either an HMO (Health Maintenance Organization) or PPO (Preferred Provider Organization).  My physician since childhood, retired early, rather than dealing with the idea of cost maintenance.  I remember him telling me, "It is just not a good idea for anyone other than the patient's doctor  to make decisions about what tests or procedures are needed."  Since that day in 1991, I understand what he meant.

Take the test to see if you have a cheap HMO

Some carriers have developed ways of doing business that can be described as making you (the policyholder) jump through hoops. It seems designed to discourage you. It might save you some anxiety if you understand that some things are denied routinely, and then granted when you appeal. It is contemptible but it is just a delay process. It discourages some to the point of giving up (and not get paid). You must persist.

Now we should admit that in the past some doctors ordered unnecessary tests and procedures because of the malpractice insurance crisis.  If there were one chance in a million that a condition was cancerous, and the test was not ordered, a big law suit could follow. However I see a contradiction. HMOs regulate tests, X-rays, and procedures. They actually give "their physicians" guidelines to follow. Someone should be responsible when savings cause losses. But HMOs are currently exempt from malpractice liability, and although that may be CRAZY, we should admit removing the exemption will have to increase their health care costs and therefore premiums.

Enter the concept of Association plans.

It seems insurance contracts written between Insurance carriers and an association (for its members) can be offered (country wide) without coverage mandated by each state. In those states an unfair advantage exists. In reality, some coverage will most likely be limited to a maximum payout or excluded (like like psychiatric care or organ transplants). People compare policies and agents chart prices with no mention of the difference this can make. We have been warning about this matter for years; Finally, someone else is concerned enough to talk about it:

From The National Journal dot com

From Families USA dot org

But the real problem with purchasing coverage through an association is when a claim is denied, or any other predicament like delays, you can't go to your state insurance department for help! The policy is not regulated by your state's insurance department. Most important, the insurance contract is now between the carrier and an association, not the individual.

And in 2005, the President of the United States is suggesting allowing the formation of Federal Associations. What a bad thing!

Back to understanding the big picture

Co-Payments (not a bad thing).

Every policy has a portion the patient pays. Almost everyone has a policy that has a limit for some exposure, and may differ from another policy. Co-Payments and limits allow lower premiums we all want. There are questions to ask your agent.

Of course that is IF you have any choice in the matter. Most people get what their employers give them, and the employer is just trying to keep a lid on the ever rising premiums.

Archer Jordan, of Health Plans, a seasoned life & health agent who specializes in individual and small group health, says, "You want a policy with the tightest requirements, ones that you just barely qualify for. Then your rates will be the lowest."

Some agents will suggest that you not list some preexisting conditions because the application will likely be rejected. Remember that failure to be honest can jeopardize your coverage when you need it. The best advice is to be honest and volunteer only what the questions ask, but understand that for things which you have recently received treatment, there is a record with the MIB (Medical Information Bureau).

Understanding Risk Pool Groups:

Another thing wrong is the system (for individual coverage) of old and new risk pool groups, that by nature, outdate themselves, leaving only the unhealthy. A company starts a risk pool, and sets high underwriting requirements, insuring as few people with preexisting conditions as possible. If you are lucky enough to qualify, your premiums will be low, and since you are healthy, you deserve low rates, right? Some plans are for nonsmokers. Why should you have to be put in a risk pool with less healthy people?

But time passes (wish it weren't so). Eventually people in your insurance group develop an ongoing condition or illness.  Maybe something develops that requires expensive prescriptions, or frequent procedures, like an MRI.  The costs have to be passed on to your group, and premiums go up. And the healthy ones, say, "Why me"?

Eventually the same carrier announces they are coming out with a new group, with lower rates for those who qualify. Of course they do this-   They have to compete with other competing insurance carriers! But see what happens; It doesn't happen overnight, but eventually the healthy policyholders apply to a new risk pool, or get a new plan. Who do you think gets left? Since a small number of unhealthy folk can't pay enough premiums to cover their own medical expenses, the groups develop rates no one can pay, and are eventually disbanded, leaving uninsured citizens among the ones who died waiting for a referral.

Oh, I'm sorry, I got carried away... but one of the biggest problems with our system is this fact. Whatever policy you have that seems OK today is only temporary. The risk pool group can't last forever. Even if you have group coverage through an employer, it's not forever. The policy as well as the employer certainly are subject to change, and a percent of the population will develop a condition that can make them uninsurable. A copy of a letter to agents (CareFirst Broker Flash 6/04) lists conditions that WILL BE REJECTED, including diabetes and asthma!

It may be natural to feel (if you are young and healthy) that you shouldn't have to fund the costs of all those persons not young and healthy. You might ask why should your family subsidize the family that is unlucky enough to have a child with a life long illness and a nightmare of medical costs? But that is what insurance is! And you have to... We have to... It is a cost society must share.

or

"We don't need your stinking dental plan!"

In shopping for health insurance, many people articulate, "I want to get a policy with a dental plan..." Don't expect what you get when you go see a medical doctor. You can expect a bargain priced annual cleaning, and a schedule of reduced fees on most work. There is no low CO-payment with the balance covered by the company because there it is almost never indemnity plan. There will be a book of dental providers who have agreed to offer their services at reduced fees.

The reason I say this is not insurance is because the definition (I was taught) centered around the claims divided up by policyholder's premiums. In most current dental plans, the premium you or your employer pay is split between the agent and the carrier with NONE of it (or almost nothing) going to the dentist.

Now think about this:

1) Which dentists (do you think) agree to do the job for about a third less then others?

2) Where will there be cost cutting? What can cost reducing measures mean to the you, the patent.

3) Whether the office gets $30 a visit (Kaiser) or $3 per year (what some plans pay the provider) the office can't cover the cost of a cleaning. The dentist must look for work. Fortunately, most mouths have work that needs to be done.

4) Because of the low margins, some dentists require you pay at the time of service; and you can expect a charge if you cancel or miss an appointment.

5) If you have the type of dental coverage with a discount fee schedule, ask your dentist, "How much more would this dental work cost me (for something more than a cleaning) if I were without my present coverage..."

6) Don't expect an honest answer to another question: "Is there any difference in the treatment given for similar patents with different amounts of compensation?"

Here is a real (tongue in cheek) suggestion in a effort to keep to keep all our premiums down... That IS what we want, isn't it?

Let's make everybody exempt from lawsuits! That's what we can do.

Insurance companies, doctors, hospitals...

A terrible idea but why should they operate at a disadvantage to HMO's?