Consumer Survival Kit; 121; Here's To Your Health: A Look At Medical Insurance

Consumer survival kit number one 21. Here's to your health. A look at medical insurance. The Maryland Center for Public Broadcasting. The. Center for Public Broadcasting. This program is funded by public television stations the Ford Foundation and the Corporation for Public Broadcasting. Are you sure this is what they mean by semi private room. I don't know. This is where they put me. This is where I say medical insurance. Next on consumer survival kit. With. Fellow on lower level health insurance is a difficult product to buy.

There are hundreds of companies to buy from offering thousands of combinations of coverages comparison shopping is difficult and too many Americans find out they've got a lemon of a policy when it's too late to do anything about it. Tonight we'll try to make that comparison shopping a little easier. We'll show you some things to look for in a company and a policy. And we'll show you some ways of analyzing your present coverage. Bob Smith will operate on an ailing policy Sandie hard and will diagnose the complications of major medical coverage. And friend Johansen has some first aid with our survival kit. But first a few questions. Number one group policies usually offer lower premiums and better coverage than individual policies. True or false. Number two it's a good idea to buy coverage for a specific disease such as cancer or heart disease. True or false. Number three. Mail order medical

insurance generally offers real savings and quality coverage. True or false. Now for the answers. Number 1 is true. Group coverage is usually cheaper and usually offer better coverage. That's because your employer usually pays some of the bill and handles some of the administrative details. If you are eligible for a group policy you should take advantage of these savings. But don't just sign up blindly. Some group plans don't have major medical plans and a close examination of your group coverage may reveal other gaps that you'll want to plug with some individual coverage. If you do have group coverage. Find out if you can convert to an individual policy with the same company when you leave the group so you won't be left completely unprotected. Number two is false. It's not a good idea to buy coverage for a specific disease. Insurance experts call this practice of gambling not insuring if you get sick you are gambling it will be cancer or another disease named in the coverage. This kind of policy is called dread disease coverage and it's been outlawed in at least one state. Your health insurance should

cover you regardless of the onus. Number three is false. Mail order medical insurance which you see advertised so often in metropolitan newspapers generally does not offer real savings and quality coverage. Some a lot of companies have a poor claims record and deception has been so widespread that some insurance commissioners have issued strong statements warning against the purchase of mail order insurance. Now just because a policy is sold through the mail doesn't necessarily make it bad. But there has been enough deception that you should approach the purchase of a lot of insurance with great caution. The place to begin an analysis of your health insurance is to look at your company's financial stability. Now you can do that by looking in best insurance report. Bests rates companies in a variety of financial categories. You could find this in your local library. You also want to compensate with the return rate above 50 percent and that means a company that pays out in benefits more than half of what it takes in in premiums. A company that pays out 80 percent in benefits of what it takes in in

premiums is probably a better buy than one that pays out only 30 percent. Some State Insurance Commissioner's offices can tell you a company's return rate or you can write for our survival kit which lists the return rates of over 300 commercial companies. A word of caution. A return rate is just one indicator and return rates can differ from policy to policy in the same company but they do give you one clue to the quality of a company's operation. It's also important to understand your policy misunderstandings can be embarrassing. Good morning Mrs. motley where I'd like you to meet Mr. WADE. Mr. Weeks say hello to Gladys milling around. Her. What are you bringing that man in here for. Mr. OWEIS your new roommate. Just call him Joe. Oh you have. OK I'll get you a nice big pan out of the refrigerator.

You just lie down and relax. Don't mind me. Oh my goodness. What are you doing here. Well they ran out of beds in the communicable disease what. Don't mind me. But when I thought my insurance policy got me a private room more I doubt that most insurance policies only cover a semi-private room. You have to pay for the difference yourself. I don't pay for anything myself. My insurance policy provides me with $50 a day. Too bad. Why. Well the average stay for a day in the hospital is $92. With you. And me. If you.

Don't mind me. Now once you. Well my health insurance agent Sam O'Brien thinks there's nothing the matter with me. Excuse me but would you mind moving over just a little bit. I think you're on my half of the bed. Well Sam O'Bryant thinks I'm right but I happen to know I have appendicitis. All the girls in my bridge club had operations now I'm going to have my job and your policy pay for a percentage of this surgery cost or does list a cash value for each type of surgery. Well I don't know I asked Sam O'BRIEN What difference does it made. Well of there's a percentage. You have to pay the difference. But if a pays a surprise for certain operations a lot of times not just charge much more than the insurance pays and a deductible. Well yes he's going to deduct my appendix.

No no no I mean your health insurance. You see with many policies you pay the first $100 or so and then the insurance company starts paying how long you're going to stay. Not too long I hope these beds. So as a martyr. Well the doctor said I could leave in three or four days. I think my insurance agency is trying to rush me off so I'll stay about three weeks. Besides if what you say is right then after I pay $500 I'm home free anyway. Not quite what. Well most policies only pay 70 or 80 percent above the deductible you pay the rest. But don't mind me. I'm a Their rep. I'm not about the Maxima is it in days isn't in dollars. Do you know. What I read. 0 0 7 Brian this is Joe your claims ban.

Yeah yeah. Well I don't think you'll have to pay back claims Sam. Yeah right. But. A farmer's work is from sun to sun but it claims that just as work is never done. Don't mind if Mrs Mullingar had known what was in her policy. She would have been so confused. Her policy paid on an indemnity basis. That means it allowed a fixed dollar maximum for different services. For example in allowed 50 dollars a day for hospitalization. But in many areas the cost of a day in the hospital can go up to $150 and higher. Her policy allowed a certain dollar amount for an appendectomy. But if her surgeon charge more than that she'd have to make up the difference. Now if your policy pays on an indemnity basis and it's an old policy you should update it. Medical costs have soared in the past 10 years and you may find that your

policy covers only a fraction of your costs. A policy that pays on an indemnity basis is not as good as one that pays full service benefits with service benefits. The policy pays the full cost of the service minus any deductibles. Mrs. Mullingar is appendectomy for example would be covered regardless of what it cost. Medical insurance breaks down into three general areas basic hospitalization which is what Mrs. Mullingar was talking about. Major medical and disability income and the first of these basic hospitalization covers in hospital costs. Your policy should cover daily nursing care medications anesthesia room and board and laboratory tests and X-rays. It should also cover the costs of the doctor's visits to your room and surgeon's fees. Major Medical is designed to pick up where your hospitalization leaves off. It covers the catastrophic diseases and accidents that often require prolonged expensive treatment. Sandy Harden will have more on

this later. The third type of insurance is disability income insurance. This is the coverage that gives you regular income. If you should be unable to work because of an illness or accident disability income insurance can be tricky especially when it comes to defining disability. Can I help you. Yes I certainly hope so. I'd like to make a claim on my disability insurance disability claim. Right. What happened. Well you see I was a prince and this mean old Wicked Witch turned me into a frog so obviously I'm disabled. I see. When did this happen. Couple weeks ago. Well in the first place there's a waiting period in your policy and you have to be disabled 30 days before you can collect by me. Great life much. No no thank you. You see the waiting period is quite flexible. When you buy a policy you

can select a waiting period anywhere from one week to 360 days. Now in your case you selected 30 days. Common waiting period. Of course the longer the waiting period the less expensive the policy. So I won't be able to collect for another two weeks. Drop the price of flies these days it's going to be a long two weeks but you won't be able to collect then either. No I will be able to collect any writing. You know when you say your policy defines disability as the inability to perform duties pertaining to any occupation. Now with this definition you have to be totally incapacitated and unable to do anything in order to collect but I am incapacitated I can't even perform my princely duties. I can't even slay dragons. I saw fire breathing dragon the other day you almost made me into french fried frog legs. I tell you the maidens they don't even look at me twice anymore when they look at me all right. But all I think about is warts and all my friends. I am disabled. Now. You still can work. You can hop from lily pad to lily pad. Catch flies and jumping frog contests.

But man I am a prince I'm not interested in hopping on Lily Pons that's a pair of pads pads now for catching flies I might have been too important and asked for a frog jumping contest. So it's beneath me. Well you should have had a definition of disability something like like this. The inability to perform duties pertaining to his or similar occupations and as long as you can perform your princely duties you could collect but you didn't have this definition you blew it. Well try this on for size me head. Really now would you care very much. Really. Well how about a game of leap frog. Ladies and gentlemen. You're about to witness a television first. Behind me a group of skilled surgeons is performing a difficult operation. Their patient a health insurance policy. And as it removes some

of its weaker parts they'll bring them over here to the camera for all of us to see. OK here comes one now. Yes Doctor what have you found. Are you sure you want to go ahead with us on television. Yeah. Is it that bad. Look for yourself. Oh renewable at the option of company. That's really bad. Thanks doc. This applies to disability income insurance renewable at the option of the company means that the company can cancel the policy when the next premium comes due. So as soon as you make a claim and start costing the company money they can cancel you and you'd be left without insurance. What you want is at least a guaranteed renewable policy. They have to cover you until the policy expires and they must renew your policy. They can raise your premiums but only if they raise everybody's they can't just raise yours. Your best bet is non cancelable and guaranteed renewable with this kind of

contract. The company agrees not to raise your rates at all until you reach a certain age usually 65. So when it comes to disability insurance look for at least a guaranteed renewable. And if you can swing it and I'm cancelable and a guaranteed renewable. Oh here we go again. A three year pre existing conditions call that's awful. You see most policies won't cover you for an illness you had when you took out the policy. This keeps people from buying a policy then checking into a hospital for an operation that they've needed for a long time. But this exclusion shouldn't be for more than a year. What this means is that you're not really covered for 3 years after you buy the policy unless you disclose the conditions in the application. And that's a pretty big deal.

Watch out for a long preexisting condition exclusions. Right. Writers. Here's what a company may do. They require you to fill out a medical question. If the questionnaire shows that you've had an illness like a bad back they may put a rider in your policy excluding coverage for any loss due to your back trouble. You want a policy that gives you the widest possible coverage. So you want to keep these exclusions and riders to an absolute minimum. Make policies like that. Rest in peace. I am Professor Farnsworth J. Quigley professor emeritus of English literature. I have been asked to cast my critical eye upon some contemporary American writings

popularly known as health insurance policies which I have done. I am sad to report that the samples did not flow with the syntactical brilliance that we find in many other examples of English literature. But we do find here a remarkable talent by the authors for circumvention obfuscation and convolution. Not only that they're hard to understand. I'll show you what I mean. I must fix the plaster in this way. I have them here somewhere because here they are. To wit we have two examples of language from two different policies on the coverage of infants. Number one his dependent children are covered under this policy. All future children born to you and your spouse. While this policy is in force will automatically be covered at birth. If you are covered for and the effects number to eligible dependents include you and your spouse and any unmarried children between the ages of

14 days and 19 years. Here you are not covered until age 14 days. Birth defects can be expensive especially in the first 14 days of life. And sad to say 7 percent of all children have such problems. This language is superior. The great philosopher said GTO to go home. I think therefore I am. That. Is a truism. Some people say Koji Kondo at a go some. I think I am covered therefore I am. That. Is a false ism. To conclude my critique. I can say that these policies show a talent for clever uses of the language. The plot to spin the dialogue. But I would recommend. That if you think yourself well read you should read at least one such

policy your own. Now where did I put those glasses. I have to return this airplane to my son. Insurance is at its best when it protects you against an unlikely expensive event. And that's where major medical comes in. It's designed to provide protection against the extremely high medical costs of serious accidents or extended illnesses such as heart disease cancer or kidney disease. Treatment for these kinds of health problems can cost tens of thousands of dollars and without sufficient coverage that could be an out-of-pocket expense for the patient and or his family. Major medical insurance is not expensive since you're insuring against a highly

unlikely event. The policies usually have a large deductible. Two hundred fifty five hundred dollars or higher. Of course the higher the deductible the lower the premium. Once the bills rise above the deductible major medical should cover a percentage of all medical costs both inside and outside the hospital. That includes nursing care medication and doctor's fees. A good policy should have a high limit 50 to $100000 and the co-insurance should be on an 80 20 basis. That means the company pays 80 percent of the costs above the deductible and you pay the remaining 20 percent. Some policies offer an additional benefit. The 80 20 co-insurance covers the first $25000. After that the company pays 100 percent of the expenses. Two of the biggest medical expenses are surgical fees and physician services. Look for the words reasonable and customary under an explanation of such items. Some policies offer a fixed dollar limit for these things. But remember with

major medical we're dealing with some exceptional health problems that demand the attention of some highly skilled and expensive medical specialists. If the policy says the fees will be paid if they're reasonable and customary. Your Financial Protection is greatly increased. Also avoid a fixed dollar limit on the hospital room. Even with some policies however that are good this isn't always possible. So if you have to choose a fixed dollar limit opt for the highest one possible. Major medical has been called by some experts. The most important aspect of health insurance. So it's imperative that you choose your coverage carefully. Select a high limit 50 to $100000 and look for co-insurance on an 80 20 basis. Nothing lower. And look for the words reasonable and customary under surgical services and physicians fees. Don't be shy about asking your insurance agent questions. You're trying to protect yourself against some of the highest bills you may ever receive. You deserve the highest quality of

service from your insurer. One of the most important considerations in buying health insurance is the company's claims record. Some companies pay claims quickly and efficiently. Others reject claims almost routinely. How do you tell the two apart. Well the best way is to ask around. If you find several people who have insurance with the same company and none of them have had trouble collecting on claims chances are the company is a good one. You can also call your state insurance commissioners office ask if the commission has taken administrative action against the company recently. Ask if the hearing has been scheduled concerning that particular company's operations. In most cases they won't volunteer this information so you have to ask. You can also watch your newspapers for stories about administrative action taken against insurance companies. Make a mental note of the companies involved. Some companies will deny claims knowing that a certain percentage of consumers won't fight it. This may be unethical but it does wonders for company

profits. If it happens to you your state insurance commissioner should be able to help you. With our present economic troubles thousands of Americans have lost their jobs and their group health insurance. If you're laid off you have three health insurance options. The first is to convert your group policy to individual coverage. It probably will cost more but if you can afford it it's much better than having no coverage at all. You may still be able to get group coverage through your church club professional group or fraternal organization especially in the area of disability income insurance. It's worth checking out since group coverage will generally cost less than individual. You can also apply for Medicaid a program administered by the states to help people with limited incomes pay their medical bills. Contact your state health department for more information on health insurance. You can write for consumer survival kit. Fran Johansen blitz these publications together and she's up next to tell you about this week's kit.

Analyzing your health insurance is a job that requires some special knowledge. You'll get that knowledge from reading this week's survival kit. One article in the booklet is entitled diagnosing your health insurance and it shows you how to do just that. We've also reprinted the shopper's guy for health insurance prepared by the insurance commission of the state of Pennsylvania. This handy guide simplifies the complicated health insurance language and it gives specific examples of the kind of language to avoid in a policy you are considering. Another article examines the gaps in Medicare and offers helpful suggestions on how to plug those Medicare gaps with supplemental coverage. We also cover catastrophic medical costs with an article on major medical insurance and we have a glossary of health insurance terms. As Larry mentioned one clue to a company's quality is the percentage of premiums that returns in benefits. In our kit we list the return rates for over 300 commercial companies. So you can tell at a glance how your company compares to

others to get your medical insurance survival kit. Send $1 to cover reproduction costs postage and handling to medical insurance. Box nine thousand seventy five. Owings Mills Maryland 2 1 1 1 7. Please allow 4 to 6 weeks for delivery. That's $1 and please specify medical insurance. The address again is box 1975 Owings Mills Maryland 2 1 1 1 7. Each state has an insurance commissioner's office. In many states you can walk into this state office with your policy in your hand and someone there will answer your questions about it. This can be a useful service if you'd like to find out if what your salesperson told you verbally is also written in your policy. You can call your commissioner's office to find out of this service is offered in your state.

If you have a complaint about your coverage or if you're having a fight with your company to get a claim settled your insurance commissioner's office should be able to help. Look in your phone book under your state government. You can also try your state consumer protection agency for help. For most Americans having some form of health insurance protection is essential. However understanding your health insurance is no easy matter. But if you look for a high return rate keep preexisting condition clauses writers and other exclusions to a minimum. Pay close attention to the language especially in definitions of words like disability and carefully examine your coverage in the areas of basic hospitalization and major medical and disability income protection. You will be taking 4 positive steps in the right direction. Unfortunately for too many Americans these steps won't be enough. Some people can't afford any insurance and many others can't afford to spend enough to prevent financial disaster at a time of serious

illness. The high cost of medical care in America and the equities these costs create have been the subject of numerous studies. Congress is now considering several proposals to improve our health care system. We urge you to keep informed on the development of this legislation and to let your representatives know your opinions. Thank you for joining us. We'll see you next week on consumer survival kit.