Looking for a low-cost alternative to expensive group insurance or COBRA?
Colorado individual or family health insurance may be the answer-provided you are in excellent health. You'll need to provide an extensive health history (that's a hassle!), but if you qualify you'll typically save 30 to 50% on your premiums compared to group health insurance (that's very nice!).

• Why Group Insurance Costs More
• People are always surprised when I tell them that, in most cases, group insurance costs more than individual insurance. “How can this be?" they ask me. There are two major reasons:
• Guarantee Issue: Real group insurance is always employer-based and guaranteed issue, meaning you cannot be rejected, no matter what serious health problems you might have. In addition, if you've had previous coverage, pre-existing conditions will be covered from day one. If you did not have previous coverage, pre-existing conditions will be covered after 6 months. Individual insurance policies, on the other hand, look at your medical history for the past 10 years (in most cases). If you have a pre-existing condition, the insurance company can (and usually will) permanently exclude your prior condition. In extreme cases they will deny you coverage altogether.
• State Mandates: The state of Colorado requires group insurance to cover a number of conditions that individual policies don't have to cover. The two that have the greatest effect on premiums is mandated coverage for maternity and mental illness.

• What you Need to Know to Select the Best Plan for YOUR Needs
• Most people just jump on the Internet and run a quote. Big mistake! Bigger time waster! The sad truth is that all the quote engines are confusing! Unless you already have an idea of what to look for you'll be overwhelmed and find the information difficult to decipher. In addition, due to a variety of reasons, the internet generated quotes are often unrealistic and not the rate that you will actually receive. So before you run any quotes, read through the information below and narrow down your search criteria—or better still just contact us, and let The Insurance Doctor do the work for you!
• Do you live near a densely populated area, or are you in a rural area away from large population centers?
• 1. Densely populated area: Select either a PPO or HMO. Both require you to go to network doctors and hospitals, but the PPO network is much larger and gives you more freedom in choosing your medical care. PPO's allow you to see a specialist without getting a referral from your primary doctor, so for most people PPO is the way to go.
  2. Rural area: Since rural areas will have very few or no medical providers that belong to a network, you will need to filter the quote engine for an "indemnity plan." These policies allow you to see any doctor of your choosing anywhere in the country. While that is nice, these policies typically cost about 30% more than a comparable PPO plan.
• Is your doctor in the network?
• 1. Before spending a lot of time researching plans, ask yourself if you absolutely, positively want to have your doctor in the network plan. It may not matter how good someone’s plan is or how attractive the premium, if your favorite doctor is not in the network. If you are not willing to change doctors, then do an initial screen to identify the networks your doctor does belong to.
  2. The best and easiest way to do this is to make a list of insurance carriers you are considering and call your doctor’s office to ask if they participate with that insurance company. It is important to be aware that some insurance companies do not have their own networks, but instead rent a network. For example, Sloans Lake is one of the biggest networks in Colorado, but is not an insurance company. So when calling the doctor’s office you need to mention both the insurance company and the network. For a list of insurance companies along with their networks, scroll to the bottom of this page.
  3. The second way to check is to click on the link below and see if your doctor is in the network. Be 100% sure of how to spell the doctor’s name or you will get a “no match found.” If not totally sure of the spelling it is best to just enter two or three letters of the doctor’s name and then scroll. If you still get a “no match,” go ahead and call the doctor’s office to verify. Doctor Networks
• Do you have a pre-existing health condition?
• 1. Whether it's asthma, a bad back, high blood pressure, cholesterol, antidepressants or a host of other conditions, you’ll want to tell your agent about it up front—before getting a quote. Since each insurance company tends to treat these conditions differently, it is important for us to know about them right away so we can steer you to the company that will give you the best deal based on your condition.
  2. The worst mistake that you can make is to apply without talking to an agent first. Otherwise, you may be shocked to learn that the company declined your application and now you have a black mark. Here at The Insurance Doctor, we work hard to avoid unnecessary and unexpected declinations.
• Do you participate in dangerous sports or hobbies?
• 1. “So, what's dangerous?” you ask. Fun stuff, like technical mountain climbing, hang gliding, bicycle racing, rodeo, SCUBA diving (depending on circumstances), and extreme sports. If in doubt ask us. While many companies might exclude these activities, we have companies that are more open to covering you even if you participate in such activities. We are here to advocate on your behalf and to get you the best and most complete coverage! In addition, we can provide you with supplemental accident coverage which covers virtually all sports and accidental injuries with just a $100 deductible! Accident Plans
• What do you want covered?
• 1. “I want everything covered—both the big stuff as well as the small, everyday stuff.” If you are in this category, select a policy with a $500 to $1500 deductible with an office and drug copay. The copay feature allows you to see a doctor or get prescription drugs without having to meet your deductible first. In effect, the copay creates a “deductible bypass.” Keep in mind, however, that while this is a popular feature, it does increase the price of the insurance.
  2. “Just cover me for the major, backbreaking expenses—I can handle the smaller stuff.” Personally, I feel this is what real insurance should be about. Most people can handle a $2500 or even a $5000 hit, but not a $50,000 hospital bill. If a bill of several thousand dollars won’t break you financially, I recommend going with a higher deductible, say $2000 to $5000. I especially like the newer generation HSA plans that pay 100% once you reach your deductible, rather than the more traditional 80% plans. The premiums on these high deductible plans will be very low. If you fit in this category, I recommend that you take the difference between a more expensive plan and the economy plan and put aside the premium savings in a special account. You can open a regular account at your bank, or better yet a Health Savings Account. If you stay healthy (which most years you will) YOU GET TO POCKET THE SAVINGS instead of the insurance company! See HSA Plans for more information.
  3. Prescription Drugs. Prescription drugs can be very expensive, which is one big reason for high insurance premiums. You can lower your premium by about 25% by doing away with drug coverage. Is this a smart move if you don’t expect to need prescription drugs? Some people may be willing to take the chance, feeling that it’s a low risk gamble. If you TRULY cannot afford the premium then this might be an acceptable way to economize. It certainly is better than getting a policy that limits how much the insurance covers in other areas, such as outpatient expenses. Personally, I do not recommend this strategy as we never know what we we’ll need in the future. Since specialty prescription drugs can be extremely expensive, it seems prudent to protect oneself for huge drug expenses. For example, in Colorado we have the highest incidence of Multiple Sclerosis (MS) in the nation. The most common medication to treat MS runs about $2000 per month—that’s $24,000 a year! Some people have to take multiple medications for MS so their monthly bills can run up to $5000 per month! That’s anywhere from $24,000 to $60,000 year! How would you feel if your policy did not cover such expenses?! If, after reading this, you still want to get a plan without drug coverage, tell me and I can sign you up. Just be aware that you are buying against my professional recommendation.
     
     Caution! Beware of policies that attempt to cover up the lack of a true drug benefit by advertising a “discount drug card” or similar wording. Their agents may even claim that the drug discounts “can be as high as” 75%! The operative wording is “as high as.” This means the discount can also be zero! In other words, you never know what you’ll end up paying.
     
     Another variation in drug benefits will be a policy that pays for generic drugs but not for the latest and most expensive brand name drugs. This is a compromise plan. It takes care of the majority of drug needs, but you miss out on the latest specialty drugs.
  4. Limited Benefit Plans: These plans lower premiums by limiting how much they pay for outpatient expenses. This means that if you are not an “inpatient” in a hospital (meaning overnight stay), your outpatient expenses will be limited to a fairly low dollar amount—typically $15,000 to $25,000 per year. There will also be either no drug coverage or very low limits on drug coverage. While a lot of people think that $25,000 for outpatient expenses is a lot of coverage, keep in mind that many surgeries are now done on an outpatient basis, so you can easily run above these amounts. Many other expensive procedures can occur on an outpatient basis. Chemotherapy for cancer, for example, runs $10,000 to $15,000 per month! Agents that push these plans will tell you “something you can afford is better than nothing” and that “fewer than 20% of the population ever exceeds these amounts.” That’s true enough...but what if you end up being in that unlucky 20%? There are usually better ways to cover you without exposing you to catastrophic claims. That’s our expertise. Call us for a free consultation!

---

Copyright © 2010 by Peter A. Trozan. All rights reserved.