Wednesday, February 15, 2006

The Cost of Care

Health care, and insurance to cover the cost of that care, is a popular topic for debate. It has been debated, sometimes heatedly, in this forum and others.

Many who have not used their health insurance other than for minor illness or accident fail to see the other side of the equation. It always amazes me when I ask a prospective client what kind of benefits they would like, the response almost invariably goes like this. They want a low copay for doctor visits and meds. They want to be able to have an annual physical at little or no cost to them. Beyond that (they profess) they really don’t need health insurance since they never get sick.

My contention is, they really don’t need health insurance for routine things like doctor visits for mundane afflictions or even for most meds. Instead, what they need is catastrophic coverage, such as is found in the HDHP/HSA combination.

Regardless of whether you believe your insurance cover should cover the routine or be saved for the truly catastrophic, here is an example of WHY you need a plan with a GOOD major med benefit and no cap on things like medications.

Avastin is an example of a tier 3 or non-formulary medication. You won’t find it on any carriers list of meds that can be purchased for a $20 copay. Instead it will be in the non-formulary column that could carry a $60 copay or even higher.

In an attempt to be price competitive, some carriers have eliminated coverage for meds completely. Others have simply put an artificial limit of $2000 per year for meds.

If you were taking Avastin, and you had this plan, you would blow through your annual max in about 2 weeks.

Personally, I think it is very short-sighted of agents who sell cover that has limited benefits. I also think they should be sued when their client develops a condition that requires care that is not covered by the policy they promoted just because it was cheap.

But I also think the consumer should share some blame for failing to understand the pitfalls of purchasing a plan simply on the basis of a low price, and a feeling they will never need coverage for expensive meds.

You may never need such a powerful drug, but if you do the time to make the right decision concerning your coverage is now, not later.
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