What Your Health Insurance Company Doesn't Want You To Know
Through the years, the local agents at Insurance For Texans have spoken with thousands of Texans about their health insurance. In all of those conversations, three statements keep coming up over and over again:
- It's Too Expensive!
- It's Too Confusing!
- When I Need To Use It They Tell Me It's Not Covered!
Can you relate to these statements?
We get it. Health Insurance companies have made things ridiculous to understand and use. There appear to be hidden gotchas at every turn. So we thought we would compile a list of all the things that they know and don't want you to know so that you can turn the tables on them.
So let's take a look at that list!
The Top Five Things Your Health Insurance Company Doesn't Want You To Know
Most insurance agents and all health insurance company employees are never going to spell this out for you. It's not that they don't like you, it's that their best interests are served by you not really having an understanding of this. So why are we telling you this? Great question. Were so glad that you asked!
The founder of Insurance For Texans is a little different. When he started in the insurance industry over two decades ago he worked for the insurance company helping to set rates. So he has seen the crazy math that goes into all of this and is sharing this knowledge with you so that you can have a grasp on what does and does not matter when you are looking for a health insurance policy for you and your family. Because let's face it, no one wants to worry about any of these things when they are sitting in that waiting room at the hospital trying to make a life and death decision that can absolutely wreck their financial future.
Here is our top five list of things your Health Insurance Company Doesn't Want You To Know!
- They Do NOT Want To Help You Lower Expenses Associated With Health Care
- Your Deductible Is NOT The Most Important Number
- Prescription Coverage For Generics Is A WASTE Of Money
- You Can ELIMINATE Most Out Of Pocket Expenses
- Catastrophic Health Insurance Does NOT REQUIRE A Massive Deductible
Let's break these down one at a time so that you can use this knowledge for your benefit.
1. They Do NOT Want To Help You Lower Expenses Associated With Health Care
People in the health insurance industry are always talking about "bending the cost curve" for healthcare. That is code speak for lowering what it costs to treat people for conditions, sickness, and emergencies. It sounds really great. But the reality is that it's a lie when it comes from the health insurance company.
All insurance companies are highly regulated by the state department of insurance. Inside that regulation is what is known as a "minimum required loss ratio". That means for every dollar that they take in via premium there has to be 85% of it go out the door paying for claims. The only way that they can make their profits look bigger for investors is to make the raw number bigger overall. Making 15% on $10,000,000 looks much better than making 15% on $8,500,000 even thought it is still 15%. So why would they ever reduce it?
They also make their profits bigger with all of the add on fees that they find ways to charge in processing your policy activity and claims. That paperwork side of things is an easy place to stuff profits while continuing to increase your overall costs for insurance and health care. If it feels like a dirty trick, don't blame us!
2. Your Deductible Is NOT The Most Important Number
One of the first questions that we are asked about any health insurance policy that we recommend is "what is the deductible"? Unfortunately, you have been trained to focus on this number, and as the policy deductibles have risen sharply over the last decade it has created great anxiety for Texans. The anxiety has forced many into buying policies that are too expensive for what they offer. Why do we say this?
The insurance companies have created a shell game where you are focusing on lowering the deductible thinking that it will lower what it costs if you have a major health related event during the year. What they slipped by you is a number called "Maximum Out Of Pocket" that determines the amount of money that you have at risk if you go into the hospital or have a surgery.
Your health insurance policy has a provision in it that you will pay co-insurance, or a percentage of all bills after the deductible has been met, until you hit the policy Maximum Out Of Pocket (MOOP). This means if your deductible is $1,500 and your Maximum Out Of Pocket is $9,000, and you wind up hospitalized for a week with a total bill of $75,000 your portion of cost is going to be $9,000 either way. So why pay an extra $400 a month in premium for the right to still pay that $9,000 Maximum Out Of Pocket?! Always keep an eye on the MOOP!!
3. Prescription Coverage For Generics Is A WASTE Of Money
As prescription drug costs have soared and many fine Texans rely upon them in some form or fashion for their health, the insurance companies have rolled co-payments in for most of the drugs that we use. And if you are on a high dollar prescription like Gilenya, Humira, or Enbrel you MUST know how your prescription benefits work. It's the stark reality of those medications. But for so many residents of DFW like us, we take generic prescriptions for our conditions like high blood pressure or high cholesterol. The hard truth is that your health insurance company is likely ripping you off with the copays of up to $25 a month.
You are not required to fill your prescription using your health insurance benefits. Did you hear us? You can fill your generic prescriptions wherever you would like to get that done with or without using your health insurance plans prescription benefits. This means that you can go to Mark Cuban's Cost Plus Drugs and see how his price to ship to your home compares to what your co-pay is using your prescription drug benefits from your health plan. If your copay is more than $5 to $10, you are likely spending too much for that generic prescription.
Ultimately, a little bit of shopping can end up saving you money in the long run. You can save money on filling the prescription and if you have a particular health insurance plan that is appealing price wise but doesn't do well with your prescriptions, you now have options. And we ultimately think that is a great thing for you!
4. You Can ELIMINATE Most Out Of Pocket Expenses
Up in item number two, we talked about focusing on your Maximum Out Of Pocket. What if we told that there was a way to eliminate paying for most or all of your out of pocket health care expenses? You read that correctly. Let's look at how an often misused Indemnity Plan can make your life better!
Health Indemnity Plans often take a bad rap because people think that they are buying something that they are not. They are absolutely not major medical insurance. But when you understand that the insurance company is going to pay you a set amount of money when healthcare related activities occur you can begin to harness the power of these plans for good rather than evil!
The scenario goes like this. You have a high deductible health plan where both the deductible and maximum out of pocket is $7,000 and you are paying cash for things like office visits and treatment until you hit that $7,000 total for bills on the year. This kind of plan can save you hundreds of dollars a month in premiums, but also means you're on the hook for paying for visits. A well crafted indemnity plan that doesn't cost a lot of money will give you money for office visits, ambulance rides, cancer treatments, days in the hospital, and so on. In the end, you can use that money for whatever you want, but we see it as a mechanism to cover that $7,000 maximum out of pocket if you go into the hospital! Boom, you've saved a few bucks a month on premiums and eliminated your costs out of pocket at the same time. The proverbial win-win situation.
5. Catastrophic Health Insurance Does NOT REQUIRE A Massive Deductible
Finally, there has been a smear campaign on catastrophic health insurance coverage and were not going to stand for it any longer. The health insurance companies have convinced too many residents of Texas that they can only qualify for catastrophic health insurance if they are 22 years old and they take on a massive deductible of $10,000 or more. Friends, that is just not true.
You can purchase a health insurance plan to cover major events like critical illnesses such as cancer, heart attacks, strokes, etc and accidents that have a very manageable deductible of $1,000. We have the fine tooth details of these plans in our Catastrophic Health Insurance Blog article.
The long story made short is that we use a trio of policies that do require underwriting to make sure that you qualify. In the end, you can save hundreds of dollars a month on premiums while you pay cash for day to day health related items like a visit to your primary care physician or your blood work. We've found over time, if you're one of those people who NEVER goes to the doctor and is worried about mitigating against the financial risk of a major health event, the catastrophic coverage that we use can be a great way to manage both of those things in a cost effective fashion.
If you are trying to make sense of health insurance, and feel confused by it's cost and how to use it let Insurance For Texans help you sort out the maze. Our highly trained professional advisors have knowledge, plans, and blueprints for making sure that you aren't worried about the cost of getting treatment when your focus should be 100% on getting well. Schedule a consultation with us today!