Medical insurance is one thing everyone needs no matter what’s going on in the economy. Over 40 million Americans do not have private insurance and nearly half of all legal bankruptcies are the result of medical bills. It leaves us susceptible to a lot of questionable medical coverage promises – and that means buyer beware.
James Quiggle of the Coalition Against Insurance Fraud warns consumers to be on the lookout for pitches from health discount cards that arrive in the mail, online and over the phone. A Georgetown University study found that five D.C.-based cards charged anywhere from $13 to $148 a month plus a one-time enrollment fee of up to $200. The study also found numerous problems with these programs, including misleading advertising and discounts that were less than advertised. And because they don’t sell insurance directly, it is a largely unregulated industry and there are thus fewer ways to protect the consumer.
Before you sign the dotted line on these health discount cards, Quiggle recommends doing some homework and looking closely at what’s being promised. Make sure any big offers advertised are backed up by a contract, find out what medical conditions and treatments are covered under the plan, and remember, even if your medications are discounted, you may still be better off with generic drugs. Another common complaint: providers listed are not associated with the service. So if you believe a certain doctor participates with the program, double check with the office before you visit to make sure.
Also watch out for what Quiggle calls ‘weasel words.’ Terms like ‘long-term protection,’ ‘affordable protection,’ and up to 80% savings’ should be met with caution.
Kim Holland, the insurance commissioner of Oklahoma, offers three more tips to finding affordable health insurance:
1. Shop around for rates. Your state’s insurance department provides a list of insurance providers in good standing. Also, every state has a health underwriter’s association that is made up of professional agents that specialize in insurance programs. It’s fine to shop around at web sites like Esurance.com, she says, but only use them to gain information.
2. Consider high-deductible plans, which will reduce your premiums but make you pay more out of pocket. And health savings accounts are a good option too, as they act like retirement plans where you can set aside money that is tax-deferred. If you pull the money out to pay for medical services, it is not taxed, and what you don’t spend grows in the account.
3. If you suffer from a pre-existing condition, check your state’s laws to see if there are any high-risk insurance pools that may cover it.