Health insurance quotes are confusing and full of jargon, which is why it’s important to use an independent health insurance agent to help you wade through the information. There are five common red flags often overlooked by the consumer that agents can spot easily.
5 Common Red Flags
1. What is the cancellation policy? All policies have provisions where the insurance company can cancel (rescind) the policy if there is evidence of fraud or an omission of a condition or medication. They can also cancel a policy for “lack of payment”. This is normal. However, some policies state that the insurance carrier can cancel as long as they give the policyholder a 30-day written notice. This is a scary proposition! What if you contract an expensive disease that requires months of hospitalization? A letter cancelling your coverage would not give you any options.
2. What are the waiting periods? Some policies have no waiting periods on coverage. Some will state a 30-day waiting period on doctor’s visits. A 90-day waiting period on elective surgery is normal, but stay away from policies that require a 6-12 month waiting period.
3. Does the maximum out-of-pocket include the deductible? If you have a plan with a $2,500 deductible and a $5,000 out-of-pocket maximum, it is reasonable to assume that the maximum you will spend is $5,000. The scary truth is, some plans don’t include the deductible in that equation. If you are comparing two plans that seem equal but are vastly different in price, this might be the reason. It can be easily overlooked.
4. Is the deductible per year? This seems like a stupid question at first. Most deductibles are per year; After you meet your deductible in that year, you may or may not have more to spend before you reach your out-of-pocket maximum. But there is one company in particular that offers a lower-priced policy with a deductible per incident. Yikes! What if you have 3 separate surgeries in the same year? That could get very expensive very quickly.
5. Is the out-of-pocket maximum too high? Some plans may have a reasonable deductible, such as $2,500, but a much higher out-of-pocket maximum of $10,000. That’s pretty high! Sure, it looks like a bargain, but in reality it may be similar in price to another company’s plan with a $5,000 out-of-pocket maximum. Why not get something that will cost you less in the long run, even if it costs a few dollars more now?
I can help you think through all of these questions and spot any red flags.
Most people find insurance quotes and statements of coverage confusing. Don’t just skim over them—take the time to understand what you’re buying (or what you already have). If you’re not sure what it all means, let me take a look. I’ll help you make sense of it, at no cost to you. I won’t try to sell you something unless I spot a red flag that needs to be addressed or find an opportunity to get you better coverage for less money.
