The 7 Facts Every Person In America Should Know Before Buying Any Health Insurance Plan!

Health care is a hot topic in America. When you buy a health insurance policy, never make your decision based on price alone. This report will reveal to you some critical facts about the health insurance that should be considered before making your buying decision.

Fact #1

All Health Insurance Companies Are Not The Same

Before you run out and purchase your next health insurance policy, you should know something about how the insurance companies are rated. The company that is best known for rating insurance companies is called the A.M. Best company, A.M. Best is the oldest, most experienced rating agency in the world and has been reporting on the financial condition of insurance companies since 1899.

Here Are The Ratings The A.M. Best Company Assigns:

  • A++ and A+
  • (Superior)
  • A and A-
  • (Excellent)
  • B++ and B+
  • (Very Good)
  • B and B-
  • (Adequate)
  • C++ and C+
  • (Fair)
  • C and C-
  • (Marginal)
  • D
  • (Very Vulnerable )
  • E
  • (Under State Supervision)
  • F
  • (In Liquidation)

    For additional information, call A.M. Best at 908-439-2200, Ext. 5627.

    Solution To The Problem

    You can ask your agent to show you a current copy of their company's A.M. Best Report. Get on the phone and call A.M. Best to find out the real story on any company before buying a health insurance policy.

    Fact #2

    All Health Insurance Companies Do Not Pay Claims According To The Same Standard

    There are only three main categories in which claims may be considered for payments:

    1. Let the hospital or doctor decide what the insurance company should pay.
    2. Let the insurance company decide how much they should pay.
    3. Let an independent third party of the industry decide.

    If a hospital or doctor's decide, it's the equivalent of giving them a blank check and saying, "fill in the blank $ ________ for how much you want and we'll pay it." This is called actual charges . This is not a common practice with insurance companies, because they cab go broke if they don't place some restrictions on how much is coming out of the insurance pool. If claims payments are not restricted in some way, there would not be enough money in the insurance pool to help cover the risks of many other policyholders. Proceed with caution against when an insurance company claims they pay actual charges. What is common is that the majority of insurance companies decide what they want to pay. When an insurance company decides how much they choose to pay for a claim, they use wording like this:

    • We pay reasonable charges
    • We pay normal charges
    • We pay prevailing charges
    • We pay allowable charges
    • We pay average charges
    • We pay permissible charges
    • We pay regular charges

    The above terms are defined in the policy and mean whatever the insurance company says they mean. The company is in control of determining what the meaning is. This is usually not what the hospital, doctor or policyholder feels it should be and therefore much confusion and misunderstandings occur as a result. As long as the insurance company is in the deciding seat, their standards can change at any time.

    Solution To The Problem

    The American Medical Association (AMA) recognizes a term called USUAL AND CUSTOMARY CHARGES. It sets the highest standards for ALL health insurance claims. These charges are based on what the majority of costs are for the same or similar service within the geographic area. Medical Data Research (MDR) conducts nationwide studies for the Usual and Customary costs in geographic areas throughout the United States. They publish these findings for insurance company use. Some companies pay higher Usual and Customary charges, but many companies pay something less, whatever they feel is reasonable, etc. Usual and Customary charges are NOT decided by ANY insurance company. It's a recognized third party decision. Choose an insurance plan from a company that pays the Usual and Customary Charges after any deductibles or co-payments have been met. Ask your insurance agent before buying.

    Warning! Beware of companies who attempt to fool you by adding extra wording like usual, customary and reasonable charges. (U, C, R) Adding another word to the authorized term, changes the true meaning and is a loophole for the company to still decide how much they want to pay for any claim.

    Fact #3

    All Health Insurance Plans Do Not Cover Doctors The Same Way

    A policyholder may be shocked to find that when they need two or more doctors for a medical procedure, that only one is covered and additional doctors are not. This goes back on an old English lesson we learned in grade school. For example, let's take the word surgeon. There is a difference between surgeon's fees and surgeons' fees. Still confused? Take a closer look. Notice where the little apostrophes are placed? N's means one surgeon. Ns' means two or more. Most people don't pay attention to this when an insurance agent "says" our plan covers surgeon's or surgeons' fees, because both sound the same. An agent may not tell you this means only one is covered and you will be responsible for the charges for any additional surgeons. You can lode thousands of dollars of your hard-earned money by overlooking where the little apostrophe is placed.

    Solution To The Problem

    Make sure your health insurance plan covers multiple doctors and does not limit who can treat you. Make sure your agent explains to you in simple terms how many are covered. Ask your insurance agent before buying.

    Fact #4

    All Health Insurance Plans Do Not Cover Whatever is Medically Necessary

    Many plans will only cover certain hospital procedures as outlined on the policy. If it's not listed, it's not covered unless you see the phrase "and all other medically necessary hospital expenses" . This phrase is important. Because if a doctor performs a medically necessary procedure that's not on the list, it's not covered, leaving you responsible for the charges.

    Solution To The Problem

    Make sure your health insurance plan covers all other medically necessary hospital expenses. Ask your agent before buying.

    Fact #5

    If you have been accepted by a health insurance company, you will normally have a waiting period before your pre-existing condition is covered. A waiting period of 24 months is typical for most plans in the industry. Some companies will give you credit for waiting periods satisfied on your previous policy. IF you have a serious health condition that is unacceptable, a company may offer you a Rate-up or Exclusionary Rider in order to issue your policy. A rate-up means you'll be charged more to cover your serious condition. An exclusionary rider means a specific condition will not be covered. A company should be up front with you about any exclusions. If you choose an exclusionary rider, make sure any major system in your body is not eliminated.

    Solution To The Problem

    Make sure you know exactly how your preexisting conditions are covered and about any waiting periods. Ask your insurance agent before buying.

    Fact #6

    All Health Insurance Companies Do Not Perform Rate Increases The Same Way

    Some companies have a provision in their plans where they can single you out for rate increases independently of all other policyholders. They may raise your rates each year you have a birthday or because you have collected too much money from the plan. The purpose of a rate increase is to offset claims or losses and inflationary increases. Since all insurance companies are subject to paying claims and the economy, there will always be a need for periodic rate increase. However, when this need arises, you don't want to be "singled out" due to your age or health status.

    Solution To The Problem

    Make sure you can NOT be singled out for rate increases on an individual basis. Buy a plan that performs any necessary rate increases on all the policyholders of the same type in your particular state. Ask your insurance agent before buying.

    Fact #7

    All Health Insurance Plans Do Not Provide The Same Dollar Limits

    Many health insurance companies only provide up to $250,000 for each injury or illness and $1 million to $2 million lifetime maximum for all insured applicants combined. Medical costs are not what they used to be. Don't get stuck with an out-dated policy. For example, a premature child birth may have expenses of $200,000 or more in the first six months alone. If you encounter a major catastrophic injury or illness, you may want to be sure you've got a plan with sufficient dollar limits to cover today's rising medical costs.

    Solution To The Problem

    Consumer-oriented health insurance companies now provide $500,000 to $1,000,000 for each injury or sickness and $5 million to $10 million lifetime maximum for the entire family. Choose a plan that is keeping up with the rising costs of medical care. Ask your insurance agent what the limits are before buying.

    Summary of Report

    Hopefully this report has helped you become a better educated consumer about health insurance plans. Choose a health insurance plan based on the quality of the Company and the Plan first. Then adjust the rates by increasing your deductible or co-payment amount to make it affordable. If you buy a cheap plan, you'll get what you pay for. Don't make your buying decision based on low cost prescriptions, doctor visits and the monthly premium payment alone. Find out if you'll be covered 24 hours a day, on and off the job, and if the plan is good in any recognized hospital in the world. Buy from a professional, licensed Agent in whom you can have complete trust and confidence. Find out how long it takes the company to pay claims. Have your agent explain the general list of exclusions and limitations on the plan. Get the phone number of your Agent and your insurance company's customer service division for help and assistance. Finally, stay informed and remember to vote on issues to improve the health insurance industry.

    © 1997 Consumer Guide Published By United Service Association For Health Care

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