Types of Health Insurance and for Whom They are Appropriate

Facts and Fallacies about Health Insurance

FACT: Health Insurance is costly right now. Whether you have it through your employer or purchase it on your own it is costly. Most likely it is the second highest budget item coming right after mortgage or rent. It is also a necessity and not a luxury.

FALLACY: “I would be better to not pay the premium and just pay the medical bills”. Not unless your last name is Rockefeller – and even John D. chose wisely where his millions were spent! A good individual plan may cost you about $4,500 a year or more– but that is still far better than exposing yourself to the unknown amount of money you could face by not being insured. If you think that number is high, read on to some very current medical costs: “BOB” is a healthy, active 50 year old who runs his own business, and up until recently, had not seen a doctor in years as he was always fine. Two months ago he had a minor heart attack and spent a week in a hospital. The hospital bill alone exceeded $95,000. He is doing very well and has had a great recovery, and is most grateful that he had insurance and is not now facing a $95,000 medical bill! “Suzie” is a very healthy 30 year old female with no preexisting medical conditions. She recently had minor surgery. The total bills for blood work, x-rays, and what the doctor told her was ”15 minutes on the table” totaled over $6,000. Better to pay the premium for insurance than the bills if you don’t have it!

FACT: Insurance companies offer grace periods in case you are late (ON OCCASION) with the premium.

FALLACY: “My insurance will be continued by the company for another month after I pay the last premium”. Not so. You will have a 30 day grace period if you are late with the premium, but if you do not pay the premium, you will not have coverage for that time period and all claims submitted will be denied.

FACT: Medicare was started in 1966 to offer some medical coverage. It was never intended to offer comprehensive (or complete) medical coverage.

FALLACY: “I don’t need anything else, I have Medicare!” Not so. If you have Medicare that is great news. It is by far the best buy on insurance around. However, it was never intended to cover all of your medical expenses and you will need a good Medicare Supplement to pick up where Medicare leaves off.

FACT: The need for long term care is the greatest threat to your financial security.

FALLACY: “I do not need any other coverage; Medicare will cover me if I need care at home or in a nursing home!” Not so again. Medicare covers less than 2% of all nursing home stays – and very little for home care. Long Term Care insurance is designed to protect your assets, while providing you with control of your medical future.

FACT: Dependent children pursuing higher education at accredited colleges or universities can continue benefits under their parents plan until they reach an age determined by the insurance company or until they graduate.

FALLACY: “My daughter is going off to college but I do not need to keep her on our insurance plan as the state will give her free insurance because she is going to college” I wish I knew who told my client this one! Never, and I mean never, have I heard of the state providing free insurance just because someone is going to college! The old adage “no one but your mother will give you a free lunch” applies here. Health insurance is a very serious matter and should not be lightly discarded based on a comment from a well-meaning friend. Some colleges provide health insurance policies for students who do not have other coverage, but often these policies are very inexpensive and very limited in the benefits they offer.

Be sure to seek advice concerning your medical coverage from licensed individuals qualified to render it, and who are knowledgeable and familiar with your particular needs. While the intentions of friends, neighbors, or relatives may be good, the negative ramifications of bad advice will be all yours!

Irene C. Card is the founder and president of Medical Insurance Claims, Inc. a health claims processing company serving individuals and physicians. If you have questions relative to this column or other related topics, we invite you to call (973) 492- 2828