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    8 Replies Latest reply on Sep 14, 2008 1:01 PM by HealthLifeAGT

    Ten Questions You Should Ask Your Health Insurance Agent

    CSteven Newbie

      If you are a business owner, self-employed or an employee of a company that is not offering medical coverage though your employer, you may have to undertake the frustrating, daunting and time consuming task of purchasing health insurance on your own. If this is the case, there are certain things that you can do as a consumer to ensure that you are purchasing the type of health insurance coverage you really need at a price you can afford.


      When you purchase a health insurance plan, you must achieve a balance between four important variables; wants, needs, risk and cost, before you spend your money. Although you may "want" a health plan that offers you 100% coverage and a $5 co-pay for prescription medications, you may not "need" this type of health plan if you are healthy, take no medications and do not have any significant health related "risk" factors. Since a 100% health plan may "cost" significantly more than a health plan with 80/20 coverage, it may not be in your best interest to pay higher monthly premiums for coverage that you are not likely to use. In addition to weighing the aforementioned key variables, it is also critical that you understand the limitations of your coverage.

      The following is a list of 10 key questions that you should ask your insurance agent, BEFORE making a decision to purchase a health insurance policy:


      1. What insurance company do you represent and are you a "captive" agent, "independent" agent or insurance "broker?" (e.g. A "captive" agent usually represents ONE insurance company and can usually only sell that company's insurance products. An "independent" agent or insurance "broker" usually represents many insurance carriers and can sell a variety of insurance products.)


      2. What is the plan's calendar year deductible and would I have to pay a separate deductible for each family member if everyone in my family became ill at the same time? (e.g. The majority of health plans have a per person calendar year deductible, for example, $250, $500, $1,000, or $2,500. However, some plans will only require you to pay a 2 person maximum deductible each calendar year, even if everyone in your family needed extensive medical care.)


      3. What is the plan's coinsurance percentage and what dollar amount (stop loss) it this percentage based on? (e.g. A plan with 80/20 coverage means you pay 20% of some dollar amount. This dollar amount is also known as a stop loss and can vary based on the type of policy you purchase. Stop losses can be as little as $5,000 or $10,000 or as much as $20,000. It is also important to note that some policies have NO stop loss.)


      4. What is the plan's maximum out of pocket expenses per year? (e.g. This expense is a total of all deductibles plus all coinsurance percentages plus all applicable "access fees" or other fees.)


      5. What is the plan's lifetime maximum benefit if I become seriously ill and does the plan have any "per illness" maximums or caps? (e.g. Some plans may have a $5 million lifetime maximum, but the policy many stipulate that there is a maximum benefit cap of $100,000 per illness. This means that you would have to develop many separate and unrelated life-threatening illnesses costing $100,000 or less to qualify for $5 million of lifetime coverage.)


      6. Is the plan a schedule plan, in that it only pays a certain amount for a specific list of procedures? (e.g. Mega Life & Health & Midwest National Life, endorsed by the National Association of the Self-Employed, N.A.S.E. agents are known for selling schedule plans.)


      7. Does the plan have unlimited doctor co-pays or is there a limited number of doctor co-pay visits per year? (e.g. Many plans have a limit of how many times you can go to the doctor per year for a co-pay and, quite often, the limit is 2-4 visits.)


      8. Does the plan offer prescription drug coverage and if it does what type of coverage? (e.g. Some plans offer prescription benefits right away, other plans will require you to pay a separate drug deductible before you can receive prescription medication for a co-pay. Today, many plans offer no outpatient prescription drug co-pay options and only provide you with a discount prescription card that gives you a 10-20% discount on all prescription medications.)


      9. Does the plan have any reduction in benefits for organ transplants and if so, what is the maximum the plan will pay out for an organ transplant? (e.g. Some plans only pay a $100,000 maximum benefit for organ transplants for a procedure that actually costs $350-$500K and this $100,000 maximum may also include reimbursement for expensive anti-rejection medications that must be taken after a transplant. If this is the case, you may be required to pay for anti-rejection medication out of pocket.)


      10. Does the plan have any separate deductible or "access fee" for each hospital admission or for each emergency room visit? (e.g. Some plans, like the Assurant Health's "CoreMed" plan have a separate $750 hospital admission fee or "Access Fee" that you pay for the first 3 days of a hospital admission. "Access Fees" are in addition to your plan deductible. Also, many plans have benefit "caps" or "access fees" for out-patient services, such as, physical therapy, speech therapy, chemotherapy, radiation therapy, etc. Benefit "caps" could be as little as $500 for each out-patient treatment, leaving you a bill for the remaining balance. Access fees are additional fees that you pay per treatment. For example, for each outpatient chemotherapy treatment, you may be required to pay a $250 "access fee" per treatment. So for 40 chemotherapy treatments, you would have to pay 40 x $250 = $10,000.)


      Remember, your health insurance purchase is just as important as purchasing a house or a car, if not more important. So don't be afraid to ask your insurance agent a lot of questions to make sure that you understand what your health plan does and does not cover. And, most importantly, read all of the "fine print" in your health plan brochure and when you receive your policy, take the time to read through your policy during your 10-day free look period.


      Lastly, if you have any concerns about an insurance company, contact your state's Department of Insurance BEFORE you buy your policy. Your state's Department of Insurance can tell you if the insurance company is registered in your state and can also tell you if there have been any complaints against that company that have been filed by policy holders. If you suspect that your agent is trying to sell you a fraudulent insurance policy, (e.g. you have to become a member of a union to qualify for coverage) or isn't being honest with you, your state's Department of Insurance can also check to see if your agent is licensed and whether or not there has ever been any disciplinary action previously taken against that agent.


      About the Author:

      C. Steven Tucker is the President of Small Business Insurance Services Inc. a multi-state licensed Independent insurance brokerage firm. He has been interviewed regarding health insurance and insurance in general by the Wall Street Journal, DHL Worldwide and Real Estate Executive Magazine. Mr. Tucker believes he can help consumers make more educated choices before they purchase a health plan. He has written many articles in this endeavor. These articles can be viewed on many Business Networking sites around the web

      If you have a general question relating to health insurance or are in the market to purchase a policy, please feel free to contact him directly via email at
      or visit his online insurance brokerage firm here
        • Re: Ten Questions You Should Ask Your Health Insurance Agent
          DomainDiva Ranger
          Question #11:

          Why will my premiums increase after the first year every six to 12 months with no regard for the fact that I am extremely healthy and HAVE NOT had a claim?


          Because your age and zip code are the only things taken into consideration when pricing a policy premium increase.
            • Re: Ten Questions You Should Ask Your Health Insurance Agent
              CSteven Newbie
              Hello Diva,

              You are absolutely correct again! Age & zip code are indeed the only two factors that affect your health insurance premium rate increases when you are insured on an individual health insurance policy. I would however, like to expound on that a bit. Whilst your rate increases certainly seem unfair (and indeed they are) these increases are inherently lower than those that are often experienced by the Small Business owner. This is true because, if you are insured on an individual health insurance policy, insurance law mandates that your insurance carrier can not legally raise your premium based on the type of claims you file or the amount of claims you file. Instead, the insurance carrier can only raise your rates annually based solely on the amount of claims they have paid out to similar policy holders that they insure in your zip code demographic. This particular statute of health insurance law protects you against exhorbant annual rate increases because you are lumped in to a much larger risk pool than that of the aforementioned Small Business owner who insures his employees on a Small Group policy.

              All of that being said, +the longer you keep an individual health insurance the policy, the more it will cost you! This is true because very few insurance carriers have a rate guarantee that extends beyond the one year policy anniversary date. This means that after the first year of policy ownership transpires, the insurance carrier can now split your annual rate increase in half and hit you with it twice a year! This is why the majority of our clients purchase a new health insurance policy each and+ every year. This is easier to do now because not only are there more insurance carriers offering individual policies, but the majority of them now cover controlled conditions such as Hypertension and Hyperlipidimia from day one (even if it is pre-existing). This yearly replacement strategy is the smartest way to keep your health insurance premiums as low as possible year after year. This is true because introductory health insurance premiums are always cheaper than renewal rates.

              All things considered, owning an individual health insurance policy (even with the annual rate increases) still provides you with a safety net not found on a Small Group health insurance policy. In contrast, the laws in the state of Illinois (and many states) allow the insurance company that issues a Small Group policy the legal right to raise the rates annually for that small group by 67% based solely on the amount of claims submitted by only one (or more) insureds on the same Small Group policy (and of course any new applicants). The carrier can even legally apply that 67% increase at the time of policy purchase (before they even start to pay claims) based solely on the adverse medical history of one or more employees who wish to be insured on the Small Group policy. This means that the Small Business owner's family could be perfectly healthy and the majority of the owner's employees could remain healthy but, if just one insured becomes seriously ill, the entire group suffers premium wise.

              Another equal concern to the Small Business owner is the question of maternity coverage. If one insured wants maternity coverage (usually young female employees) then everyone in the group must pay for maternity coverage (even single males). This is so because it is one policy and the design of that policy does not vary based on an individual employee's desires. Even the progressive small group insurance policies which allow several different plan designs within the same Small Group policy, are still subject to the potential 67% rate increase at the time of policy renewal or at the time of purchase.

              There is also the problem of mandatory participation requirements. Many small group carriers require a minimum of 75% of all eligible employees (full time employees working 30 hours or more weekly) to participate in the Small Group plan. This creates another problem for the Small Business owner because he or she may have several employees who do not need coverage because they already have individual coverage elsewhere through a working spouse or otherwise. However, in order to obtain a Small Group policy the employer is forced to insure them just to meet the small group carrier's mandatory participation requirements. If that Small Group is one that will receive a mandatory 67% increase, the Employer is then forced to pay that same exhorbant premium load for these mandatory participants even though they already have health insurance. The sting of this extra 67% rate increase is typically not noticed by the employees until after they leave the company and are then offered a massive Cobra continuation premium! This is why Small Business owners should always consider insuring their employees on individual policies if they are healthy enough to qualify.

              In closing, you are still better off with owning an individual health insurance policy when it comes to the actual amount of the increase you will experience. The only suggestion
              I would make is to find a reputable broker who is licensed with many quality companies who will contact you every 11 months to make sure you have quality options year after year, instead of just premium rate increases. It does not cost a penny more to purchase your health insurance through an experienced broker so why not take advantage of their experience? This is truly the only way to control your annual health insurance premium outlay other than the obvious way...STAYING HEALTHY!
                • Re: Ten Questions You Should Ask Your Health Insurance Agent
                  DomainDiva Ranger
                  Your answer(s) substantiate the reason(s) I do not own personal health insurance. What a waste of time and money.
                    • Re: Ten Questions You Should Ask Your Health Insurance Agent
                      CSteven Newbie

                      Whilst I agree that if you have enough money set aside for a worse case scenario you may not need health insurance, the majority of the population does not have these kinds of liquid assets. This being the case, health insurance is an essential financial planning tool for the majority of the population. Just one example is a client of ours who was diagnosed with Leukemia on his wedding day. Since that diagnosis his health insurance carrier has paid out just under $750,000 to save his life. He needed many chemotherapy treatments, many expensive visits with a medical dosimetrist and his stem cells needed to be harvested.

                      If it were not for his health insurance carrier he would have lost everything he had which was not much since they were a young newly married couple just starting out and running a fledgling business. Most especially since the recent change in the Bankruptcy laws in the year 2005 prevented him from just walking away from his debt. Even though he did not have much, his household income was above (as most are) the Median income levels which prevented him from just filing Chapter 7 Bankruptcy and walking away

                      Since these new Bankruptcy laws have been inacted we have seen a tremendous influx of people who were "rolling the dice" from day to day and not purchasing health insurance.
                      The facts are, if you are a home owner and you have anything saved at all for the future, those assets will most definately be used to repay your medical debts even if you file for Chapter 13 Bankruptcy relief under the new "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005".

                      There is a happy ending to this particular client's story. He is now in full remission and has a new baby boy! He wrote me the following letter shortly after he was given an "all clear" from the team of doctor's who treated him. I have transcribed it below:

                      "Dear Mr. Tucker:

                      I would like to take this time to extend my deepest appreciation and gratitude to yourself and all at Fortis Insurance who have helped me in the past 7 months. For a long period of time, I, like a majority of people, did not have health insurance, which deterred me from going to a doctor. Then, myself and some of my other employees signed up for health insurance policies through Small Business Insurance Services.

                      I began feeling tired and run-down, but wrote it off as stress from my up-coming wedding. Feeling confidant enough with my insurance, I decided to go to the doctor and ease my mind. It was a blessing I did because I was diagnosed with Leukemia on July 13, the day before my wedding. The day after my wedding, 2 days after being diagnosed, I was admitted to the hospital to start a rigorous treatment of chemotherapy, which resulted in a stay that lasted over a month. I since have gone back for several more week-long chemotherapy treatments and finally to have my stem cells harvested. Throughout this whole process, I have had nothing but help and cooperation from Fortis.

                      This has been a very trying time for me and my family and without the help of Fortis Insurance Company, I would be in financial ruins. I cannot thank you enough for all you have done."

                      It is this story and many more just like it that confirm the necessity of proper financial planning, the foundation of which begins with the purchase of a quality health insurance policy. Without it, those of us who are not fortunate enough to have many thousands of dollars sitting in an emergency health care fund could loose everything we have in the event of a worse case scenario. Even those who do have this money set aside should consider keeping it in a Tax Deferred interest bearing HSA (Health Savings Account) coupled with a very inexpensive HDHP (High Deductible Health Plan) to cover the worse case scenarios. Once the money is inside the HSA account, treatments that would normally never be covered by health insurance (e.g. Lasik Corrective Eye Surgery, Eye Glasses, Dental Procedures, Orthodontics, Fertility Treatments, Sterilization, Alternative Medicine, Breast reconstruction surgery, smoking cessation treatment, wheelchairs, and many more listed here: would become a 100% tax deduction. To find out more about this inexpensive way to insure oneself against the worse case scenario whilst building a seperate tax deferred IRA that has no penalties for early withdrawal (if the withdrawal is used for one of the many aforementioned IRS approved medical procedures) please click here:

                      In closing I must disagree with you on this one. Health insurance is most assuredly NOT a waste of time nor a waste of money for the majority of the U.S. population
                • Re: Ten Questions You Should Ask Your Health Insurance Agent
                  Lighthouse24 Ranger
                  Question 12. When does coverage kick in for various procedures? (Some fairly routine stuff is not be covered during the first 18-24 months under some plans.)
                    • Re: Ten Questions You Should Ask Your Health Insurance Agent
                      DomainDiva Ranger
                      Answer to Q12: The most expensive procedures (and fairly routine as well) are excluded, just in case someone tries to sneak in a pre-exisitng condition for coverage.
                      • Re: Ten Questions You Should Ask Your Health Insurance Agent
                        CSteven Newbie
                        Hello Lighthouse,

                        Some health insurance policies do indeed make you wait for Preventative Care. However there are many quality policies that do not. For example, one of the best individual health insurance policies on the market today is the "Medalist 2 Gold Plan 1" insured and underwritten by American Community Mutual insurance company ( This particular plan allows the insured to spend $1,000 each year on the following Routine Preventative Care benefits - Routine Physicals, Routine Mammograms, Routine Pap Smears, Age appropriate immunizations (for children), PSA tests (Prostate) and colorectal cancer screenings (colonoscopy). All of these Preventative Care benefits are provided on a *"first dollar" *basis. In other words, there would be no deductible required for these services. The insured would only pay their $30 outpatient co pay for these services. As a matter of fact, even if the cost of the Colonoscopy supercedes the $1,000 *"first dollar" *preventative care benefit, American Community Mutual will continue to pay for the cost of this test. This is a good thing, since the average Colonoscopy costs about $2,500 (after you the radiologist who reads the test results adds his bill to the total).

                        Regarding pre existing conditions, many carriers such as Blue Cross Blue Shield of Illinois do not cover any pre existing conditions for one full year after you purchase the policy. That waiting period for pre existing conditions can even be extended farther if you have treatment during the first year for a pre existing condition whilst insured with Blue Cross.

                        However, there are many quality individual health insurance policy's (like the aforementioned product) that will indeed cover controlled pre existing conditions such as Hypertension (Blood pressure) and Hyperlipidimia (Cholesterol) from day one of policy ownership. They even cover the medications one needs to control these conditions. Granted they may add a 25% "co-morbidity" underwriting load to the base premium, but this is far better than not having either of these conditions covered at all.

                        For more information about the aforementioned product and other products that cover pre existing conditions and Preventative Care please click:
                      • Re: Ten Questions You Should Ask Your Health Insurance Agent
                        HealthLifeAGT Wayfarer

                        Great information provided, well written and informative. These are the fundamentals i try to teach hall of my clients. There is a right and wrong way to buy insurance,As long as the consumer understands that the options they select have everything to do with the cost of premium .Finding an agent who will take the time to explain the options and costs and break it down accordingly. Going with a captive agent means one thing,you are buying the best carrier that your agents represents. Not necessarily the best company available on the market. I myself am a broker for multiple carrier and find the best product for my client not my pocket!
                        Happy hunting and best of health to all!