Beware of Low Cost Insurance

There is no denying that health insurance is quite expensive in New Jersey. But it is only fair to add another sentence. You get what you pay for. I have had several phone calls within the last month that I wish to share with you.

A person on Medicare is paying $135 monthly for his wife’s health insurance. She is not yet eligible for Medicare. He THOUGHT he had excellent coverage for her. He has a policy from AARP that is called a Hospital Advantage Plan. These policies are NOT comprehensive major medical health insurance plans. They are meant to supplement other coverage! But he didn’t understand that. He thought his wife was fully insured. Out of a $36,000 hospital bill, the policy paid $4000. He now is faced with a $32,000 hospital bill! The policy also pays for four physician visits a year! Now what good is that? Being retired with a very small pension, he can’t pay that hospital bill anymore than he can go to the moon. I suggested he make an appointment with the in-patient billing supervisor and bring a copy of his income tax return with him. He will have to set up a payment plan and based on his income, the hospital may reduce the charges.

Another family with 5 small children participated in a nationwide Christian Care Cooperative. It cost them $50 per month. They thought it would cover all types of surgery and hospital care. They knew it would not pay for routine visits to the physician and they were comfortable with that. Then one of the children needed surgery and they learned it would not pay anything! It turns out they will only pay for catastrophic expenses. Even an overnight hospital stay with a surgical procedure can end up costing thousands of dollars. A truly catastrophic policy is ideal for the wealthier person who can easily afford to pay ten or twenty thousand dollars out of his/her pocket before the health insurance coverage takes over.

Don’t wait until you get sick to find out how inadequate your coverage is and don’t count on not having to pay anything towards the hospital bill if you do get sick and do not have health insurance. Too many people think they can save money by not purchasing health insurance and they go around saying that the hospital has to take care of them and they don’t have to pay. Well the hospital will take care of them but they certainly will charge you for the services rendered. There is no free lunch. Do not confuse this with the many unemployed and medically indigent who do have the means to pay for health insurance. That is a different story entirely and that is where Medicaid (welfare) comes into the picture.

If is sounds to good to be true, it is a good indicator that you do not have comprehensive health insurance. Find out now, BEFORE you need it, just what type of coverage you have.

Irene Card & Betsy Chandler are both licensed insurance professionals working at MIC Insurance Services, Inc. a health insurance services company. If you have questions relative to this column or other related topics, we invite you to call (973) 492-2828, browse our past columns on our web site at www.micinsurance.com.

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