Response to a Consumer Reports Article About Individual Health Insurance

Response to a Consumer Reports Article About Individual Health Insurance in Individual Health Insurance

In an article by Consumer Reports, authors claim that there are seven signs that an individual health insurance plan might be “junk.” We thought we’d tackle a few of their claims and provide an alternative look on what they said.

• Claim: Never to buy a plan with limited benefits or a plan labeled ”not major medical.“
  First off, don’t buy a health plan from any company that’s not reputable. If an unknown insurer labels a plan “not major medical” then it’s probably not from a company worth dealing with.
  
  When there’s a warning against “limited benefits” it can actually be misleading. Those who are looking to cut down on their monthly premiums and want to “trim the fat” of their health plan (i.e. don’t want to pay for benefits they won’t use), a plan with limited benefits might be a viable option.
  
  For example, a single male wouldn’t want to pay for maternity care for his individual health insurance plan, but that same male would pay for maternity care under an employer-sponsored plan. That’s because everyone pays and shares a pool of benefits with employer coverage.


• Claim: Coverage limits should not be lower than $100,000.
  This claim is right of the bat misleading. This almost suggests every plan you search for are going to be skinny on overall coverage limits (in insurance terms, this is called lifetime maximum coverage). This is not the case.
  
  Consumer Reports is correct when they say your lifetime limit shouldn’t be lower than $100,000 — but the lifetime maximum for most plans from reputable insurers will come in around $1 to $2 million. And by the way, a million-dollar lifetime maximum will not super-size your premiums.


• Claim: Lower premiums means insurers are trimming benefits.
  Again, the article is misleading. Your health insurance costs are all about balance and sharing risk. If you have more generous benefits, less out-of-pocket costs, and lower deductibles, you’re going to have higher monthly bills for your coverage. Lower premiums might mean lesser benefits, but it doesn’t mean a “junk” plan by any means.
  
  The key here is to balance what you can afford for your monthly bill with what costs of care you can cover yourself (pay $50 for doctor’s visit instead of $20 and you can find lower premiums).

The real thing to remember is health insurance isn’t like buying an ice cream cone. It’s a complicated product with lots of details. If you’re not sure about what you should buy or you’re afraid you’ll miss some of the fine print, speak with your local insurance agent for advice.

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