Despite reform, your medical insurance coverage can still have lots of holes. We not only have the most expensive health-care system in the world, we also have the most complicated. There are lots of little known facts that can really cost you if you buy the wrong policy or have a disease that’s expensive to treat. Health-care reform eliminated some nasty surprises, such as lifetime caps on coverage. And under the new law, some preventive care, as well as birth control and HIV testing, is free. But there are still plenty of gotchas, whether you have an individual or a group plan.
Super-cheap plans can bankrupt you. If you’re paying rock-bottom premiums for an individual plan, there’s a reason. You’ll probably have to pay a sky-high deductible (the amount you pay each year before your plan kicks in), or bills such as fees for doctor visits wont’ be covered. Even worse, some “insurance plans” out there really aren’t. They might pay as little as a few hundred dollars a day toward hospital bills, $50 or $60 apiece for a few doctor visits a year, and perhaps $5,000 or $7,000 per “sickness”. So if you were diagnosed with breast cancer, such a policy would cover only a fraction of the $100,000-plus cost of treatment. Luckily, those plans are easy to avoid – if you read the fine print. Those policies usually state that they’re “not major medical insurance”.
Pregnancy might not be covered. This isn’t an issue with group plans like the ones you have through an employer. But in most states, if you’re purchasing your own plan, you can get maternity coverage only by buying a rider. It will cost nearly as much as it does to have a baby, and it won’t’ cover you at all until you’ve had the policy for more than nine months.
Prescription coverage might be inadequate. And that goes for health plans from even well-known insurers. Some cover only inexpensive drugs but not name-brand medicine. And some brand-name drugs can run as much as $2,000 a month.
Copays for doctor visits and drugs don’t always count toward your deductible. It’s common for insurance companies, even with group plans, not to apply copays for doctor visits and prescriptions toward your deductible. The charges might be only $25 a pop, but if you’re going to the doctor twice a week for months, they’ll add up.
Some plans put no limit on out-of-pocket expenses, which can run to thousands of dollars. If you’re buying a plan, look for one that caps your expenses at a level you can afford if you get seriously ill. And if you’re already in a group plan, find out what the cap is and what might be excluded, such as drug and doctor copays.
How to avoid the biggest gotchas
If you have coverage at work
• Don’t assume anything. Read what your plan covers so that you know what you’ll be on the hook to pay.
• Comparison shop every year. If you have a choice of plans, review your options and consider switching during your company’s open-enrollment period (usually in the fall). Ask about online tools to help you compare plans.
If you’re buying your own policy
• Go to www.healthcare.gov. This website has a sortable list of every plan sold in your state. Click through to the details to find out whether a plan coves prescriptions or maternity care. Then consult an independent broker, who can help you sort through your options and advise you if you have any pre-existing conditions.