The secret to finding affordable Florida health insurance coverage

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Like all health insurance, health insurance premiums for the self employed are headed for the sky. The housing market is in the dumps, companies are laying off and the scary question many people are losing sleep over is, "Can I afford to be without health insurance?"  

People have all kinds of problems with health insurance. Some people have coverage for benefits that they never really use, that's called being over-insured. Some people have coverage for claims when they really need it, that's called being under-insured.  And some people have no coverage at all, that's called foolish, or just unfortunate.

How to cut your premiums in half.

Let's face it, some highly intelligent people can do some pretty dumb stuff.  They are so intent on finding a deal that they walk into the first car lot they pass, pay cash for the lowest priced car on the lot and drive away in their new "steal".  Hey, who am I to judge if three weeks later the wheels fall off and they're calling AAA on I-4?  We've all struggled with a budget.   But let's assume you've been there, done that and are looking for a more intelligent approach to a problem. What I am going to suggest isn't for everyone.  It's intended primarily to those of you who are maybe "over-insured" and a little older and wiser....you know, who've been around the block a time or two before.  

Let me show you how (without jeopardizing your kids' college fund):

First our subject:

A 45 year old male in good health, non smoker, and 6'0" weighing 175 pounds.  We will look at rates in both Central Florida and South Florida.

The plans:
The first plan has a $30 doctor visit copay and a separate $500 deductible for brand prescriptions.  It has a $5,000 out-of-pocket maximum ($2,500 deductible and then $2,500 coinsurance).  

The second plan has a $7,500 deductible and then it pays 100% of claims with a separate $1,000 deductible for prescriptions and it covers an annual physical (pap smears for women and mammograms) without any deductible.

The cost:

The 1st Plan costs $337/month in the Miami-Dade area and $235/month in Orlando. 

The 2nd Plan costs $140/month in South Florida and $82/month here in Orlando.

That's a savings of about $150 a month or more In Orlando and about $200 in South Florida. I just saved you $1,800 - $2,400 bucks a year in your health insurance premium.

How will it affect my actual coverage?

Co-pays:

Well, on the first plan you have a $30 copay for primary and a $40 copay for specialists doctor visits.  On the 2nd Plan, with PPO discounts and negotiated rates etc., your cost for a typical doctor visit is down around $60 a visit. And remember, your annual physical has no deductible and if you see the doctor once or twice a year for something else you're only out $50-$100, but remember I just saved you $1,800 a year in premiums.

Prescriptions:

Most generic prescriptions can be had for under $20. This compared to a copay of $15 on the more expensive plan with co-pays. Both plans have high deductibles for Brand prescriptions neither of which you are likely to hit unless you come down with a catastrophic illness. 

Deductibles:

$2,500 on the 1st Plan vs. $7,500 on the second. But, the first plan has coinsurance of 80/20 which means you pay 20%, after you satisfy the deductible, of the next $12,500 or an additional $2,500. The less expensive plan has 100% coverage after the deductible is met. 

The underlying fact is that the more expensive plan has an out-of-pocket max. of $5000.

The difference in out-of-pocket expenses is $2,500 between the two plans which I have saved you in premium in about a year to a year and a half.  The pay off is quicker if more then one person has the coverage.

Lifetime Maximums

Both plans have $5,000,000 lifetime maximum coverage.

So you be judge, is it worth it to go for the higher deductible plan and save yourself the guaranteed $1,800 a year in premiums?  No once has a crystal ball, it's true, so look at your own medical history and ask yourself how many times in a year have your expenses come close to hitting a $2,500 deductible?  Sure you'll probably have some claims during the year but $2,500 ???  It's your call I am just asking you to weigh the odds.

The real reason to buy  Florida health insurance...The "Big What-if"

I hear it almost daily..."I'm healthy - what do I need health insurance for?"  It's almost like saying I'm alive why buy life insurance. The average person lands in the hospital once every seven years.  Almost 50% of bankruptcies in the U.S. result from the onset of a sudden medical condition or accident...and believe me...they were all probably "healthy" if you asked them prior to the medical crisis. 

There is a double-edged sword in today's medical world.  Improvement in medical technology and capability is unprecedented with even further developments around the corner with genetic engineering and medicines.  All this is great but as the capabilities increase so do the resulting costs.  The possibility for the large medical bill is really why you need health insurance and this should ultimately be what your plan protects against...not the relatively cheap trip to the doctor once or twice a year.

Maximum out of Pocket

It basically means, if you have a big bill (or a series of bills) when does the plan pay at 100%.  Of course, this maximum applies to in-network and for covered benefits.  It usually applies to a calendar year, from January to December after which it resets.  Typically, the Maximum includes the deductible.

For a simple example...

You have a $2,250 deductible and then a 10% co-insurance up to another $500 maximum.  The unforeseen "what-if", a car accident occurs with $80,000 of covered, in-network medical bills.  After you have paid $2,750  (your $2,250 deductible and $500 max), then the insurance carrier will pick up the rest of the bills according to your covered benefits.

FLORIDA INDIVIDUAL HEALTH INSURANCE TERMINOLOGY:

Co-pays are the relatively small dollar amount you pay when you go to the doctor or pay for a prescription. Everyone would like to have a co-pay when they go to the doctors office. But is it worth the extra premium you shell out to enjoy that privilege? Lets say there is a health insurance plan that offers a $15 doctor visit co-pay and is more expensive by $35 a month than a plan offering a $40 co-pay. And lets say the $15 co-pay plan is $50 more then a plan with no co-pay at all.

By electing to go with the plan having a $15 co-pay you would be paying an additional premium of $35 each month (or $420 per year) rather then paying an additional $25 each time you went to the doctor and had a $40 co-pay.  If you go to the doctor a lot you come out ahead. In a typical year you lose money. Also, make sure to ask your agent or better yet, look for it in the printed information, to make sure your co-pay is good at a primary care physicians' office as well as a specialists office. These days with malpractice lawsuits commonplace, most family practitioners don't do much but run a bunch of tests and then if anything is out of whack, refer you to a Specialist.  The primary is usually not the doctor that treats you. 

How often do you go to the doctor in a typical year? If you're like most adults, you don't go very often, and if you do go often because you have some chronic illness your typical Florida health insurance company will decline you anyway. Truly, the only situation where I have seen any justification for a high premium, low co-pay plan is for families with young children who frequently do go to the doctor quite a bit. And the younger they are the more frequent the number of visits. However even in those cases a lot of times the children are just going in for well baby visits which are covered under Florida health insurance law with no deductible anyway. 

FLORIDA HEALTH INSURANCE DEDUCTIBLES

Deductibles are the annual amount you must pay before any coverage takes place - unless you have co-pays. Typically these are the expenses which occur outside of the doctors' office, depending on which services your doctor performs in the office. What we are talking about here are tests, ER and hospitalizations primarily. Things typically performed outside of the doc office but if the tests occur within the doc office they will probably be covered under the deductible, meaning you pay.

Deductibles are all about sharing costs...the idea being the higher the deductible, the more "skin" you have in the game and the more careful you will be about controlling costs. Hence, the lower the cost of these higher deductible plans.

Example of how a DEDUCTIBLE works:

John falls off his roof and is taken to the hospital by ambulance. Total cost of the accident is $5,000. Let's say John has a $1,500 deductible with 80/20 coinsurance after that. The ambulance service runs John $1,500 and is subject to his annual deductible. John has not paid anything toward his deductible, so he is responsible for the first $1,500 of the $5,000 cost. He also is responsible for paying 20% coinsurance of the remaining bill.

Because John has met his $1,500 deductible, he will only pay co-payments and the 20% coinsurance for the rest of the year until he reaches his out-of-pocket maximum, which might be his deductible plus $2000.

In the above example John is probably paying a hefty premium (or his employer) for what is a relatively low deductible. The question you need to ask yourself is "How likely is it that in a TYPICAL year John might sustain a serious injury or illness to reach his deductible. Raising your deductible is the single most cost effective way to bring down your Florida health insurance premium.  Most people never come close to reaching their deductible in the year. Its a fact! So why pay a huge premium for a low deductible? You will very rarely reach your deductible to justify the extra cost. 

CO-INSURANCE AND YOUR FLORIDA HEALTH INSURANCE PLAN

Co-insurance is the shared percentage of medical expenses you pay after your annual deductible has been met. It's normally stated as: 80/20 - meaning the health insurance company pays 80% and you pay 20% of the bills coming in after you have met your deductible.  There is a stop-loss or maximum out-of-pocket on this shared percentage however. Typically it is expressed as: 80/20 of the next $10,000 which means you would pay 20% of $10,000 or $2,000.  Once you have paid a total of $2,000 on top of your deductible in a given year, you are done. You should be covered 100% up to the policy limit, e.g. $3,000,000 etc. 

Example of how COINSURANCE works:

Sally is hospitalized for an injury. The hospital stay costs $10,000. The hospital stay is subject to her annual deductible. Sally has already paid her annual deductible, so she pays 20% coinsurance for the hospital stay and her health plan pays the remaining 80%.

Example of how an OUT-OF-POCKET maximums' works:

When John fell off the roof, he seriously damaged his knee. He will need three surgeries in 2006 to repair the damage. Each surgery will cost $5,000 and his coinsurance is 80/20 (20%). His policy has an annual out-of-pocket maximum of $1,500 for coinsurance.  The surgeries are subject to his annual deductible, which he has already met with the ambulance service.

For the second surgery, John will not have to pay the full 20% coinsurance, because he has already paid $70 for the ambulance service and the $1,000 for the first surgery, that go toward his annual out-of-pocket maximum of $1,500.

As long as the third surgery occurs in 2006, John will not have to pay any deductible or coinsurance because he has already paid his out-of-pocket maximum with the ambulance service and the first two surgeries.

*John will still be responsible for paying his co-pays for follow-up office visits, prescription drugs, and for non-covered services.