Finding Health Insurance: Enough To Make You Sick
So you’ve got your computer and a handful of business leads. You’re emboldened to break out on your own and make it as a freelancer. You’re going to say goodbye to the boss and leave the corporate world behind.
What, are you sick?
Leaving the day job may mean gaining your professional independence. But for many, it also means slipping out from under the corporate benefits package – including the health insurance plan.
This is no small fraternity. More than 43 million Americans lack basic health insurance coverage, notes the Health Insurance Association of America, a Washington, D.C.-based group representing health insurance carriers. The group estimates that by 2007, that number could hit 60 million. Coverage deficits are common among small and home businesses. Some 56%, or more than 300,000 members, of the National Federation of Independent Business lack employer-sponsored insurance coverage. (www.nfibonline.com).
Why do so many workers go without insurance? Several reasons ring true with today’s uninsured worker. One is cost. Grab your most recent W-2 for a moment and look at the benefits entry for health insurance. Depending on the size of your family, a meager number is to the right of that entry. If you head out on your own, get ready for sticker shock. In the early to mid 1990s, competition in the health insurance arena kept prices low. Then in the late 1990s, prices skyrocketed. As recently as 1997, our family of five had been paying around $300 a month for full coverage under a PPO (preferred provider organization – a open-plan and health maintenance organization hybrid) that allowed full access to a thick book of doctors. Then, as our carrier saw competition winnowing off, our prices began to rise. Today, we’re paying almost $600 a month. It’s enough to make you sick.
Another reason is uninsurability. When an employee leaves an employee, they often have a grace period before the policy terminates and they are forced to find new coverage. Some people with chronic conditions have lost their coverage or let it lapse. In many instances, once coverage has lapsed or ceased, private insurance carriers are under no obligation to offer coverage to those uninsured.
If you need insurance coverage, it’s time to break out your fedora and gumshoes and do some investigative reporting. If you’re considering heading out on your own, do some planning first. When looking for health insurance coverage, consider what “level of benefits” or the list of covered treatments you need – realizing that by nipping unnecessary items from a plan you can lower the monthly premium. For example, single men and older women may not need maternity coverage, and others may want to cut mental health coverage from the policy. Depending on the state, some items are “mandated benefits” or mandatory coverage areas and cannot be removed – even by the insured.
You’ll also have to decide whether you want co-payments (what you’ll pay to the care provider at the time of service), and what your pain threshold is for out-of-pocket expenses (usually your maximum deductible of any injury or illness). Remember: any pre-existing conditions, such as diabetes, asthma, or other medical issue that likely requires continued care, likely will hike your monthly premium.
Now, it’s time to weigh pain versus premium and decide what kind of plan you want. An HMO is a popular option that can cut premium costs by limiting access to physicians and benefits. A PPO provides access to more doctors, providers and facilities, but typically not as many as a traditional “open policy.” With fewer restrictions come higher premium costs, according to the Health Insurance Association of America (www.hiaa.org), a private trade group representing health insurance companies.
Beyond moving into an HMO, the typical matrix for cutting monthly premiums is to raise your deductible (the amount you’ll pay on each occurrence before the insurance kicks in) or lower your lifetime benefit (the amount of expense the insurance ultimately is liable in the event of a long or catastrophic illness). This requires some soul searching to determine your financial risk aversion: Essentially, if you cut your costs upfront, you’re betting on not getting too sick or injured. Feel lucky?
FINDING INSURANCE
Once you’ve decided on the type of plan and what you’re willing to spend, finding insurance is the next step. Try these outlets:
- A spouse’s program. This can be the easiest and least expensive alternative for married couples. Although they may provide health coverage, company-issue benefit programs often offer several options from a single provider, meaning there’s little to no opportunity to shop for a better program.
- COBRA. The Consolidate Omnibus Budget Reconciliation Act requires that former employees be afforded access to continued benefits from a previous job from 18 to 36 months (depending on the status of the beneficiary) following termination. Just one catch: All premiums are paid for the employee, and it often is upward of three-times higher than if the employer were paying a share of the premium.
- Call the local chamber of commerce to see if it offers its members policies. Chambers often align with local insurance agents, brokers or companies to offer benefits to individuals or small groups.
- Ask among your peers, neighbors and friends for referrals to trusted health insurance agents.
- Call the state insurance commissioner’s office to see if the state participates in a small business coverage pool, or a separate “catastrophic insurance” pool. The former lumps small businesses into a group program that makes the group plan more enticing for insurance companies to extend coverage. The latter is for workers or business owners who have been rejected by a commercial carrier or employer because of a pre-existing or a chronic condition.
- Contact the National Association of Health Underwriters (www.nahu.org), an association of independent health insurance sales agents in the country.
- Head online to: Insweb.com, ehealthinsurance.com, and HealthAxis.com. These online organizations comparatively shop insurance needs and premiums with several insurance carriers, depending on the state, provider and client needs.
- A move is afoot to allow small business associations, trade groups and other alliances to band together across state lines to increase the number of members – and lower the premiums. This would deliver to smaller groups the economies of scale and buying power usually reserved to large employers.
- To learn more about quality health insurance coverage, and for information, checklists, charts and questionnaires on choosing quality coverage, visit the Agency for Health Care Policy and Research (www.ahcpr.gov)
While hunting down leads on insurance, try to locate three agents or sources of coverage, and get a quote from each. Make sure you’re setting up the same levels of benefits and coverage, so you can compare similar policies.
With the quotes in hand, get a copy of the provider directories for primary care physicians or general practitioners from the agent, broker or companies themselves. Look for physicians whose names you know or have been recommended. Ask your own primary care physician if he or she is on the plan, and also for the names of some specialists to see if they’re included. Often, the more names that are in a policy, the more accepted it is by the medical community – and the less likely you’ll be to run into problems finding a good health care provider or specialist. If you’ve just moved to the community and don’t know any physicians, scan the names for board certifications and other credentials.
Alas, finding insurance is no small task, and having it is no guarantee that you will keep it indefinitely. Though we bemoaned the cost of our insurance coverage, we were thankful to have a policy at all. Then we got a letter in the mail: We’re eliminating all coverage of one-person groups (meaning those who have one employee and the family on the policy). You have 60 days to find a new carrier.
I scrambled. I sought to get my wife, Robbie, on the payroll so we no longer would be a “one-person group. I spoke with my accountant, pored over the ledger, worked with Robbie to see what she could do that qualified as employable labor.
Some 45 days, several sleepless nights and an extensive display of colorful – if “R-rated” – language later, we received another letter from the carrier: Never mind, they wrote. We’ll continue to provide you coverage. And by the way, your monthly premium is going up $97.
It’s enough to make you sick.
Jeffery D. Zbar is a freelance writer. He can be reached at jeff@chiefhomeofficer.com.
