6 health insurance basics your clients should know

There are more debates going on in the country than just the presidential debates when it comes to health care.

Individuals, families and small businesses are debating amongst themselves and their peers what health care access and costs mean to them; what they are willing to exchange to have health care; the “price” they are willing to pay for health care and what that “price” means.

So when your clients are thinking about health care you might encourage them to look at these six things they should know about health insurance.

1. Know what their plan would do if they were admitted to the hospital.

Your clients should know their out of pocket maximum.

If they’re in an HMO or PPO plan, make sure they not only have an out-of-pocket maximum in-network but that they also have an out-of-pocket maximum out-of-network.

Does their plan limit access to certain procedures, such as transplants?

2. Know their deductibles

Deductibles can be written two different ways:

The deductible can apply to the client’s whole plan (things inside and outside the hospital). In that case, the clients should take a low deductible.

With a $500 deductible then each family member would have to incur $500 in expenses before the insurance would pay anything. A family of four would have a $2,000 outlay. They could go years without ever using their insurance.

Or, the deductible can apply to a hospital admission or things like surgery. Things outside the hospital can be no deductible, a co-pay or smaller deductible.

When was the last time your clients were admitted to the hospital?

If they were admitted to the hospital, they will probably hit any deductible they choose anyway.

The real question is what their coverage is going to do after the deductible has been met? Is the plan 90/10, 80/20, or 60/40? Deductible and percentages are simply insurance selling tools.

Say they have a $500 deductible and they have an 80/20 plan. What would happen when they have a $100,000 claim?

They would end up paying 20 percent of $100,000 minus their deductible or $19,500. It wasn’t the deductible that hurt; it was the percentage of co-insurance they were left to pay, right?

Would they rather have a $5,000 deductible on a 100 percent plan or a $500 deductible on an open-ended 80/20 plan?

Particularly if their deductible was for the major things like the hospital stay, they could put other things on their plan to cover day-to-day medical expenses, with no deductible, a co-pay or a much smaller deductible.

3. Know how their plan would handle outpatient surgery, chemo and radiation.

There is a big difference between in-patient (being in the hospital) and outpatient coverage.