Insurance Options to Consider When You’re On Your Own for Health Care
By Steve Trattner, President & CMO of Cinergy Health
People need to insure their health at all times for different reasons. Experiencing a reduction in income is the most important time to protect oneself from spikes in expenses. American bankruptcies are climbing as a result of both unemployment and medical debt. When a person is out of work, he or she operates on a tighter budget. Being faced with a major medical expense without insurance and no income to cover the care is only part of the problem.
An extended illness or disability brings added expenses, such as physical therapy and expensive prescriptions, and it might even cause the other spouse to take a leave of absence from work. Additionally, without even basic insurance, people tend to put off important preventive care and are less likely to detect an illness at its earliest stages. The consequence is that when an illness strikes, it may be more serious, which may even prevent the person from returning to work. We have to invest in ourselves at all times to open up the best possible health insurance options.
If you lose job-based group coverage, you only have a short window of opportunity to make decisions that affect your health insurance options. Whether you choose to pursue private health insurance or COBRA, you only have 60 days from the point of losing your group health coverage to make a decision. Your employer may be eligible for subsidies that will significantly reduce your premiums for COBRA through December 2009.
Three Options to Consider
When you’re financially strapped, consider three options that can provide a temporary solution to the employment “gap”: 1. High-deductible major medical plans (HDHP); 2. Short term major medical insurance; and 3. Limited medical benefit plans.
HDHPs allow you to get the catastrophic protection that you expect from a major medical plan, but with a very high deductible, say $7,500. You’ll have to pay for most of the care you receive until you reach the deductible, but the premiums are much lower.
Short Term Major Medical Plans
Short term major medical plans are plans that cover you for a short duration of time, such as 6 or 12 months. If you’re out of work at the end of the term, you’ll typically have to re-apply. However, these plans provide a broad range of coverage at a low price by limiting the insurance company’s long-term exposure.
Limited Medical Benefit Plans
Limited medical benefit plans represent a growing segment of the health insurance market and are generally more affordable than traditional major medical plans. These plans reduce or even eliminate your deductibles and shorten pre-existing waiting periods. They are designed to pay for more routine and predictable medical expenses. Without deductibles, you are encouraged to seek care at the first sign of illness rather than putting it off until your situation worsens.
Most limited medical benefit plans pay a schedule of benefits for a specified number of doctor visits, preventive care, labs and x-rays, short stays in the hospital, and part of the cost for surgeries. The trade-off is that limited medical benefit plans don’t insure you for catastrophic healthcare. The fact is that most major medical insurance plans end up charging people.
A good place to start looking for temporary solutions and alternative options is with friends that can provide you with a reference. The benefit of experience is safer than taking your chances. You can also go directly to the insurance companies’ web sites with which you are already familiar. Steer clear of the blind Internet insurance quote sites unless you want your name and contact information to be shared with dozens of no-name agents. HBM
Steve Trattner’s is Chief Marketing Officer for Cinergy Health, a national health insurance benefit provider based out of Aventura, FL (www.cinergyhealth.com). Mr. Trattner is a health care industry veteran of more than twenty years and is responsible for the company’s strategic positioning and insurance product line development.