UN-surance

Many smaller companies want to extend health benefits to employees, but are concerned about keeping the price affordable.  For people who own their own business or are looking for work, cost-effective coverage can be tough to find.  If you’re in the market for health insurance, make sure that’s what you’re buying.  Some programs pitched to small businesses, the self-employed, and the uninsured sound like affordable health insurance, but actually are medical discount plans.  Although some plans may offer legitimate savings, others take people’s money and provide very little in return.

The FTC and law enforcers in 24 states recently announced Operation Health Care Hustle – 54 lawsuits and regulatory actions to stop the illegal practices of companies that tried to pass their plans off as health insurance or lied about what they were really selling.  According to one case filed by the FTC, people paid between $29 and $280 in enrollment fees before they received written information about the plan. When they tried to use the plan with healthcare professionals the company claimed were “participating providers,” the FTC alleges that the providers said they didn’t accept the plan.  According to the FTC, one person who bought prescription medicine discovered the “discounted” price was higher than what she would have paid without the plan.

Here are some tips for business owners on how to figure out if what you’re being pitched will turn out to be a net gain – or a major pain.

  • Reveal the deal.  Health insurance plans generally cover a broad range of services and pay for a portion of medical bills.  But if you buy a medical discount plan, what you often get is a list of providers who may offer discounts on some of their services.  Before signing up, make sure you understood what you are – and aren’t – getting.
  • The lowdown on “up to.”  Some plans claim “discounts of up to 70%!” – but how often will you save that much?  Do the math.  When you consider a discount plan’s monthly premiums and enrollment fees, there may be no discount at all.  What’s more, if you face a medical emergency or serious illness, you’ll have to cover most, or all, the bills yourself.
  • An ounce of prevention.  Medical discount plans aren’t insurance.  If you decide to look into them anyway, insist up front on a list of the healthcare providers who participate in the plan.  Before paying any money, call the providers directly to check if they really honor the discounts the promoters promise.
  • Cold call caution.  Identity thieves have been known to use pitches for medical discount plans and insurance to steal personal data.  Don’t give out financial information to salespeople who call you out of the blue or whose reputation you haven’t investigated.  Check them out with your state insurance department, your state Attorney General, your local Better Business Bureau, or a search engine, by entering the company’s name and the word “complaints”  to see what others have to say.

Looking for more information?  Visit the FTC’s medical discount scam page, read Is It Really Health Insurance? Making Sure You Get What You Pay For, and watch these videos.

5 Comments

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This is good info, and what is your opinion about Unit Link Insurance?

If you decide to go it alone and sign up with your own family health insurance for the self employed plan, think about these questions as you make your choice.

• Ask if it's a PPO or a POS plan. A PPO plan means you can choose any provider, within the list of providers they give you. With a POS plan, you have to choose one physician who will orchestrate all of your medical care. You can't even go to the emergency room, unless you're practically dead, without his approval.

• An indemnity plan means there is no list of providers and you can choose whomever you like. These types of plans are a little more expensive, but you still enjoy lower rates than you would if you were running bare with a pay-as-you-go attitude.

• Find out ahead of time what their policy is on pre-existing conditions. Most plans will limit coverage for pre-existing conditions in the first year or two of the plan. But some plans steal extra bucks out of your wallet at renewal time. They don't bother to tell you that an illness you developed over the course of the year will no longer be covered at renewal time. For instance, if you're treated for a bout of high blood pressure, then you can expect when your plan renews that your medications and office visits for blood pressure checks will no longer be covered.

• Decide how much risk you want to take vis-à-vis your healthcare dollars. Are you and your family in relatively good health? You might do better to choose a high deductible, low premium plan. You can realize tax benefits if you set it up with a health savings account.

• Evaluate your family insurance needs. For example, the high deductible, low premium plans also work for people who are sickly. If you or someone in your family has a health issue or takes expensive medication, you will meet your high deductible early in the benefit year and then enjoy pretty comprehensive coverage.

Very valuable information. Thanks!

This was a very interesting read! Lots of opinion and very
good research to be shared! Good feedback from the online
readers as well. I must commend the author and web designer
as well. Thank you for taking the time to share this with
us.

Lesley Fair, Excellent information added in Blog thanks for shared.

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