Don't Be Fooled By Cut Rate Policies

These days we would all like to find a way to save a little money on our health insurance but before you sign-up for a cut rate insurance policy, consider these factors. If you focus on premium savings alone, you may actually end up paying more out of your pocket each years rather than less. When researching plan designs you must take into consideration maximum out-of-pocket limits and co-pay amounts. Saving a few hundred dollars a year makes sense when the benefits still line up, but unfortunately this is rarely the case.

Taking things into consideration like out-of-pocket limits, co-pay amounts, coverage limits, coverage exclusions, and limitations requires some homework but it can pay dividends in the long run. Many carriers create policies with the intention of bringing premiums down by cutting coverage where it’s not likely to be noticed. Many shoppers simply compare premiums, deductibles, co-pays and miss the underlying factors that can run your health tab up each year. Here are a few things to look for when you’re shopping plans.

Check the coverage limits. Is there a lifetime limit on the policy? Sometimes cut rate policies will have extremely low lifetime coverage limits like $50,000 or $100,000. This may seem like a lot of coverage until you realize that fairly common treatments, like a hospital visit due to a heart attack, can cost well over $50,000. With a cut rate policy you have just exhausted your entire lifetime benefit and will probably incur additional out-of-pocket expenses. A full coverage plan may cost you more in monthly premium but their lifetime coverage limits of $1 million dollars or more could save you thousands down the road. Another thing to look over closely is per-illness limits. Some policies will have a higher lifetime limit but may place limits on each individual claim. Again, these can cost you on a large claim.

Another area some carriers skimp on in plan design to lower the premium is prescription drug coverage. Most top plans cover generic, brand-name, and specialty drugs with co-pays but it is becoming increasingly common to see cut rate plans cover prescriptions with co-insurance rather than co-pays. If you take monthly prescriptions this could end up costing you big in the long run. Also keep in mind that some plans have a prescription drug deductible that has to be met before your co-pays come into play and they can be as high as $500 a year.

Before you sign on with any plan, cut rate or not, call your physician and make sure that he accepts the plan you are considering and ask the agent or call the carrier and find out whether or not your doctor is in network or out of network. If you physician is not in the plan’s network you could end up spending thousand of extra dollars each year. Most plans have much higher deductibles and out-of-pocket maximums for out of network visits and many cut rate plans have a very limited physician network.

While cut-rate plans may seem like a good deal, and some in-fact are good deals, make sure that you do all of your homework before you sign on with any insurance plan regardless of the premium price. Looking over these critical benefits can save you thousands in the long run.

Source

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