Bankrate.com
January 12, 2004
By Paul BannisterThe headlines are scary. One American in six has no health insurance and the numbers are rising. Employers are dropping or reducing coverage for workers and their families. Laid-off workers can't afford to continue paying premiums and young people go without any coverage at all. A staggering 44 million Americans are in that situation - uninsured and risking their health, their savings and even their lives. Most of those forced to "go bare" are early retirees, the self-employed, workers in small companies that offer few or no benefits and people with pre-existing conditions that can't get affordable coverage.
Going naked: A bad idea
Some people reason that "going bare" isn't such a bad idea, because you save all those premiums. "It's cost-effective only, if you can guarantee you'll never, ever get sick," says Gerry Goldsholle, former CEO of MetLife Marketing Co. and the founder and CEO of FreeAdvice, an Internet consultancy for consumers. "But the fact is, nobody can guarantee they won't face one day a huge medical bill. My first wife didn't need a doctor, except for her routine, annual checkups - until she got terminal pancreatic cancer. In her final months we ran up $50,000 in medical bills."
Employee Health Plans
More, than 54 percent of women aged 55-64 are working full- or part-time jobs, because they're nearing retirement without savings or insurance. They even work at minimum-wage jobs for health benefits. Caution: Part-time jobs that offer benefits are very hard to find and you have to make sure they don't interfere with your primary income!
If you already have a job, but it doesn't provide full benefits, find out if a lesser plan is available. Many employers negotiate basic corporate "cafeteria" plans that let you pick your own level of coverage from a menu of choices and allow you to decide just how to allocate the fixed amount of employer-paid benefit dollars. You can opt for coverage ranging from "first dollar," meaning the plan kicks in at the first dollar of expenses and you pay out nothing out of pocket, when you're sick, to having a high deductible and a high co-payment. Your employer's cost is fixed, so what you choose off the menu, establishes what you pay. The bigger the premium you pay out each month, the better the coverage you get and the lower your deductible and co-pay amount.
Coverage Through Associations
Try to get into some kind of group coverage! A trade, fraternal or professional association - AARP, AAA, your alumni association or the local chamber of commerce - may offer lower-cost health plans. Check with groups you're involved with or join one to take advantage of its access. Your state insurance department can help you find a plan. But be cautious -- some of these so-called associations are nothing more, than scams.
The reason this can work: Doctors deeply discount their fees, when they deal with a group rather, than with an individual. The group hires the doctor by the year, not by the service and costs are spread across the whole group, not carried by one individual. And with a group policy no underwriter checks for pre-existing conditions.
Shop for individual policies
Maybe it's not as expensive as you think. Shop around - comparison shopping is easier, than ever through the Internet. Premiums vary greatly depending on your age, occupation, lifestyle and medical history. Keep in mind you can tailor your plan to fit your individual circumstances. If your eyes, teeth and ears are in good shape, for example, you can save some money by leaving out vision, dental and hearing coverage. And don't try to buy coverage for tiny expenses! Some claims cost more to investigate and process, than the amount at stake. If you want everything covered, you're going to pay big premiums.
Protect against worst-case scenarios
Consider insurance coverage as only for emergencies and your health insurance premiums as just another cost of living that you keep as low as possible by having high deductibles.
If you generally enjoy good health and only see the doctor once or twice a year, consider purchasing "catastrophic" insurance, through which you carry high deductibles - say, $2,500 to $10,000 per person per year - and pay for doctor visits out of your own pocket. An annual checkup and a year's supply of allergy pills, for example, might cost you $500 a year, but that might not equal one month's premium on a full-blown health plan. And if disaster does strike, catastrophic insurance will keep you out of the poorhouse.
Join the club
Get into a medical re-pricing plan! It's not medical insurance, but more like membership in a club and it can save you money. You join the club by paying a monthly fee - typically from $7 to $75 - billed directly to your credit card. For that you'll receive a list of providers - doctors, dentists, pharmacists, chiropractors, even acupuncturists or surgeons - who have agreed to reprice their "customary charges" for services or drugs - up to 60 percent off.
Services provided by the discount clubs vary widely, however, and you should be cautious, before you rush to buy. Some cards are sold by small companies with only an address on the Internet; others are marketed by merchandising giants such as Sears and JC Penney. Big names among the repricing clubs are Care Entrée, which advertises a network of 400,000 medical-service providers; Careington with 22,000 dentists on its books; and AmeriPlan USA, which has 18,000 dentists listed.
The pros: There are no limitations on how much you can use the cards; pre-existing conditions won't disqualify you; there are no deductibles or co-payments and there's no waiting period.
However, critics caution that some discount clubs often promise more, than they can deliver. There is no guarantee that you'll get the benefits, for which you're paying premiums and you have to pay cash at the time of service.
"Discount clubs are no substitute for a real national health system," says Gail Shearer, director of health policy analysis for Consumers' Union, "but they are a fact of life."
Consumers, she said, should check with their local Better Business Bureau or their state insurance commissioner to see, if the club they are joining is reputable and if its rates really offer savings.
Check government plans
If you're poor or older, you may qualify for some coverage through Medicaid or Medicare. The federal Medicare program provides medical services for the elderly and disabled. Medicaid, funded by the federal and state governments, pays for medical assistance for individuals and families with low income and resources. Most states also have "healthy children" programs that provide funding for medical needs for children under 18 at very low cost. And if you're a veteran, don't forget the hundreds of VA medical centers and outpatient clinics around the country that provide free or low-cost medical care.
If all else fails, talk to your doctor. Most doctors will charge what they think a procedure is worth. As an individual you have little bargaining power. But some doctors say they will give a discount for cash and wonder why patients pay a middleman to negotiate a deal for them. "Approach your physician, tell him your situation and ask, if something can be worked out," advises Shearer. "Even, if he won't reduce his charges, he may make other choices, especially in prescription drugs."