Checking Up on Your Health Insurance

Too many people who rely on their health insurance to pay their big medical bills are leaning on a rubber crutch. Even if you are among the some 200,000,000 Americans covered by health insurance, you will find that almost no policy will pay all your medical bills all the time. That is why you should give your health insurance policy a thorough examination, diagnose its weaknesses and then look carefully for a policy that will supplement, not duplicate, your primary coverage.

Many of your policy's ills can be cured with additional coverage. If you are hospitalized, for example, most policies will pick up 80% of the cost of your stay in a semi private room up to a certain length of time. Then policies will pay 100% for a "reasonable" period of time. But if your plan will not do that, your best protection against bankroll breaking bills is to buy an individual major medical policy from Blue Cross/Blue Shield or one of the big private insurance companies.

Whatever policy you buy should pick up where basic hospital and doctor bill plans leave off. Benefits usually range from $25,000 all the way up to $1 million and many policies provide unlimited coverage. It is also wise to buy an individual major medical policy if your current plan has limits on how much it will pay for surgery. But do not waste your money on the so called dread disease policies, which insure you against specific illnesses such as cancer. That's like insuring only part of your car.

Most health plans have limits on the total benefits you can collect in your lifetime. The Health Insurance Association of America recommends at least $250,000 for each person covered. If you are ill at ease with your plan's maximum, you can supplement it at relatively low cost. For example, a family of four can buy a policy that pays all costs above $25,000 up to a maximum $1 million. The average price is $360 to $500 a year.

About the only thing you cannot buy additional insurance for is your deductible for such outpatient expenses as doctor's appointments, prescription drugs, lab tests and private nurses. The deductible is the bare minimum you absolutely have to pay. These deductibles vary from $50 to $500 a year, although $100 to $200 seems to be the average these days.

When you give your health insurance policy its routine physical, you will discover that some expenses just are not covered. In addition, two income couples with different employers have two policies to scrutinize. The strengths of one may make up for the weaknesses of the other.

Try to avoid so called indemnity plans which pay no more than the fixed and specified amount listed in the policy for particular operations or for a hospital bed. An indemnity policy that pays $ 100 a day for your room takes care of as little as a third of the cost or less. One exception to this is an indemnity plan that covers long term care.

In choosing a policy, be aware that a company may cop out on you at the end of its term usually one year if you become undesirable. To head off cancellation of an individual policy, buy a guaranteed renewable policy. It specifies that the company can neither cancel the coverage, so long as you pay the premiums, nor raise your rates merely because you have filed several expensive claims. Rates will increase, however, as medical costs rise overall.

You should keep your policy up to date, especially at major mile stones in your life. Will you or a family member soon reach age 65? Watch out! It is your responsibility to apply for Medicare at your local Social Security office no later than three months after you turn 65. Most group plans stop regular coverage at 65 and offer only a supplement to Medicare. If you do not apply and then become ill, you may have to pay your own medical bills.

If you are retiring before 65, make sure you are still covered under your group plan. Otherwise, you will have to buy a high priced policy on your own. And if you are laid off or fired, ask your employer to continue your coverage for at least 30 to 90 days. If you do not get that protection, shop around for an interim policy to insure you for a few months. If you work for a company with more than 20 employees and are laid off or get fired, you and your dependents have the right by law to be covered by the company's group plan for 18 months. You will have to pay for the coverage yourself, but at no more than 2% over the group premiums.

The law, known informally as COBRA, also gives a child turning 19 or 23 if he is a student the right to enjoy the group coverage for 36 months, again by paying for the premiums. The same period of coverage holds true for your family if you die or get divorced.