Friday, March 14, 2008

Sub-Compact Health Insurance

[Welcome Industry Radar readers!]

The clamor for lower cost health insurance is being heard in the hallowed halls of carriers all over the country. United Healthcare (through its' subsidiary Golden Rule) is one who is responding.

Saver options within each type of Golden Rule plan feature the lowest premiums. The “Savers” provide customers with protection from the more costly medical expenses that can break a family’s budget, like hospital stays, outpatient surgeries or CAT scans. Premium costs are lowered by limiting the amount of coverage for more routine expenses, such as doctor visits.

(The Saver plans have been around for a while but folks in S.D. are just now able to purchase them).

I suppose Saver plans have their place, but there are trade offs.

Saver plans limit the amount of coverage offered to a policyholder. Copay Saver plans allow 2 doctor visits per year.

That is fine as long as you are not sick.

If you need more than 2 visits the additional visits are not repriced, nor do they accrue toward the major med deductible.

Saver plans do not cover brand name meds. You can get a discount, but not as great as you would have under a plan that includes Rx cover.

Again, no big deal until you get sick.

Since the meds are not a covered expense, they do not accrue toward the deductible and your Saver plan will NEVER reimburse the cost of meds even if you breach your major med deductible.

Sick people know exactly how much meds can cost. Just ask them. Spending $400 per month on one med is not uncommon. Some can run as much as $8,000 per month.

Just how much can you save?

A family of 4 in Atlanta would expect to pay $542 for a Copay Select plan with a $2500 deductible and full coverage for doc visits, Rx and lab work.

A Copay Saver plan that only covers 2 doc visits and no coverage for brand name Rx is $371.

Saving $171 per month can be attractive. As I tell my clients, the Saver plan is a great plan as long as you don't get sick.

On a major claim, the Copay Select limits your out of pocket under the major med portion to $4500 (the $2500 deductible plus coinsurance up to a max of $2000).

There is no limit on out of pocket for the Saver plan since brand name meds are not covered.

A better choice would be an HSA plan from Golden Rule with a $3850 FAMILY deductible for $434. Or opt for a higher family deductible of $5800 for $351.

If you are buying insurance to protect your assets, the Saver plan is not a wise decision.
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