INSURANCE 101

Originally published in Senior Spectrum, August 1991.

EDITORS NOTE: Since the writing of this article in 1991 there have been some positive changes initiated by the health insurance industry and through national and/or state legislation. Yet for the consumer, "caveat emptor", remains the watchword. To insure that a company is licensed, check with your State's Department/Division of Insurance.

A great resource for the updated rules in your State, go to NAHU's Healthcare Coverage Options Database

DOES YOUR SMALL BUSINESS HEALTH INSURANCE POLICY PASS THE TEST?

By Christine & Ted DeCorte

When was the last time you looked at your health insurance policy? People usually look at their policy at the time they purchase it, and then again after they submit a claim and the insurance company doesn't pay what you thought it would.

Living in Nevada, with its third highest health-care costs in the nation, adequate health insurance is an absolute necessity to protect your health, your home, your business, and your hard earned assets. Since over 75 percent of all bankruptcies are due in part to catastrophic illness or injury, it is worth your time to review your present health insurance coverage.

How does your policy rate? Here are 10 points to look at when reviewing your insurance policy:

1. How large is your insured "group?" Since rates are based on the size of your group, joining a large national or regional association is always best. It provides the lowest rates, stable premiums, and additional benefits.

2. What is your insurance company rated? A.M. Best, an independent rating company, rates all insurance companies. Do business with an "A" rated company only. To find out your company's rating, call your State Division of Insurance.

3. Does your insurance company reserve the right to raise your premiums according to claim experience on an individual basis? If you use your health insurance, a company could raise your rates so high that you could not afford coverage! We have seen this happen to TOO many people!

4. Can your insurance company cancel you by giving a 30- or 60-day notice, or an annual renewal? If you develop a long-term illness, some companies will evaluate the liability and cancel your coverage, or not-renew your coverage, leaving you uninsured and uninsurable!

5. Does your insurance company require their permission for you to go to the hospital? Do they penalize you for not obtaining preauthorization, or for seeking medical attention on weekends or holidays? Your insurance should be good any time you need it.

6. Can you go to the doctor or hospital of your choice, thus giving you the option to go to the very best, or are you limited to the medical care chosen by the insurance company?

7. Are you covered outside the country or is your coverage limited to the United States only? Some plans limit your benefits if you use it outside a particular jurisdiction, such as a state or county (a HMO or PPO).

8. Are you covered on the job? Business owner are not always covered by state industrial insurance, and many health plans exclude on-the-job injuries. People who work several jobs or have businesses on the side are usually not covered by their primary employer's insurance.

9. Are organ transplants covered? How would you raise over $200,000 for a liver transplant? Does your plan limit you to a list of covered transplant procedures? Many policies have not kept up with advances in medical technology and do not amend their policies to pay for these new procedures.

10. Does your insurance companies pay a "hidden" schedule of benefits that only the insurance company seems to know what is covered or how much is to be paid? Many companies state that if a procedure is not listed in the schedule it is not covered! With today's mounting medical costs, a policy that offers a $10 office visit and a $5 prescription at the expense of a $250,000 medical emergency is not adequate protection for you and your family. Your insurance policy, as dull as it may be, is must reading for the wise consumer. And if you have questions regarding your coverage, call your insurance company's \ claims department, not the marketing agent. Make certain that your insurance policy is designed to protect you and your family, instead of being designed to take your money and limit health payments.