Health plans 101: Know these 4 things before you buy

Many families searching for a health plan don’t actively consider these four things. But, they are just as important as the mainstream plan details you’ll be deciding on.

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  • Sorting through family health insurance options is an arduous but important process. Doing some research before purchasing a plan can save you time, money and frustration when it’s time to use your benefits.

  • Families looking for a health plan often consider the common plan features such as the doctors and hospitals that are “in-network,” the medical deductible, whether or not office visits and prescriptions are covered with copays and preventive care. But, there are a few things that get overlooked, but shouldn’t.

  • Before choosing your family’s health plan, dig a little deeper by reviewing these four characteristics of the company you’re considering:

  • Stable renewal increases

  • Some companies have unpredictable rate increases each renewal, which can cause frustration, uncertainty and prompt your family to search for a new plan more often. Find a company that has predictable, steady rate increases. It’s common for health insurance increases to be in the range of 7 percent - 9 percent per year. But sometimes companies raise them much more, such as a California insurance company who proposed a 59 percent rate increase in 2011.

  • The claims process & service

  • How does the company handle claims? Do they generally pay claims without a fight, or do they pre-deny claims and require the policy owner to prove the claims' legitimacy before it’s rightly processed?

  • In addition, it’s good to know what the company’s claims appeal process is and how it works in case you do need to file a claims appeal. A responsible insurance company will outline this process in their plan brochure.

  • Customer service

  • Customer service can vary greatly from company to company. If you ever need help with your plan, you’ll want to be sure that you can get a hold of your insurance company’s customer service department. Be sure they have the drive and resources to help you get answers to your questions and your problem solved.

  • Here are a few customer service related questions to ask yourself about the company your family is considering:

    • Is their customer service center local? Is it in the United States, or even abroad?

    • What are other customer’s experiences with this company’s customer service? Search RipOff Report and read through complaints that have been posted by previous customers.

    • What is their Better Business Bureau rating? Do they have unresolved complaints?

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  • Find out if JD Power and Associates has rated the customer services of the prospective insurance company, and what rating they received.

  • Test them out. Call the customer service number yourself and request a brochure, provider directory or a sample contract. Pay attention to how quick they answer the phone, how willing they are to help you resolve your issue and whether or not they follow through with sending you the information you requested.

  • Financial rating

  • There’s no reason to get too picky, but reviewing an insurance company’s financial rating can help you determine whether they are a reliable insurance company or not. Visit Standard & Poors to search for specific health insurance companies and discover their financial ratings. If they have a horrible rating, that should raise some serious red flags. If it’s “good” or “excellent” it’s probably a solid company.

  • Many families searching for a plan don’t actively consider the items above, but they are just as important as the mainstream plan details you’ll be deciding on. Take a little extra time to do some research on the company you are considering. You might prevent some serious headaches down the road!

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Jared is a licensed insurance agent who strives to help others navigate the sometimes complicated insurance market.

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