• March 2010

Does your health insurance cost too much and cover too little?

By Stephanie Cohen and Scott Golden
Golden & Cohen

Chapter 3 from their upcoming book, “YOU GOTTA LAUGH: Life in the Trenches of the Health Insurance Business”

This month’s health insurance nightmare:
You believe the cost of your policy is too high and the benefits too low.

The situation: Sara Evans was recently referred to Golden & Cohen by her friend Susan, who has been a client of ours for years. She heard we were great advocates for our clients, and sticklers about explaining policies to customers before they spend a penny.

Sara wanted options because she was concerned that her current policy cost too much and covered too little. A case in point was a recent eye exam. She had to pay for the appointment because she hadn’t yet met the $1,000 deductible on her current policy.

The solution: We immediately knew Sara did not understand the details of the policy she had purchased. Though that’s not unusual, it can prove problematic. In fact, we recommend that all of our customers make a list of the medical services they will likely need throughout the year. Before buying anything, we tell them to read the fine print on the policy, and to ask questions until they are certain they understand what they are paying for — and what will be an additional charge.

Here’s why: The fine print on an insurance policy can be complex. The bottom line is that if you purchase a policy with a high deductible, there will be no coverage until the deductible is paid in full. Deductibles apply to all coverage if you purchase an HSA compatible plan — except for preventative services.

And realize this:

1. Deductibles can also apply to specific services such as lab work and hospitalization.

2. They also apply to services differently, depending on whether they are in or out of network.

3. It’s important to know that deductibles may be cumulative or shared, or based on the calendar year or contract year. Know how it works for the policy you purchase.

4. If the policy is a Health Savings Account (HSA) versus a high-deductible plan, you will be able to write off the amount placed in the HSA account up to the maximum allowable by the government. The minimum deductibles for HSA plans start at $1,200 for a single, and $2,400 for a family.

5. Many after-tax expenditures, such as those that are included in the FSA Section 213 of the tax code, can be written off if they are not covered under an insurance policy — which is the advantage of an HSA.

If we were the Health Insurance Ambassadors

Before any new customers sign up for a policy, we’d make sure they were given a short primer, at the expense of the health insurance company, ensuring that they understand the benefit package they are buying.

We would also have the insured initial a disclaimer stating what is covered, how the deductible works and what it applies to, and what the exposure is based on the out-of-pocket limits. That would alleviate confusion.

The painful truth

The reality is that there is a cost when you buy health insurance. Realize that you’ll end up paying out-of-pocket either with a deductible or a premium. Nothing is free.

Note that if an employer, or a parent, is footing the bill for the premium, you will still be required to pay out-of-pocket costs when you visit a doctor or hospital.

If you are self-employed and are paying both the premium and the deductible, be careful to analyze the cost of having a policy that includes a deductible plus out-of-pocket expenditures and premiums.

Send us your stories

Have you or a friend had trouble with your health insurance? Send your tales of woe to Hope Katz Gibbs of Inkandescent Public Relations. We’ll address your problem in an upcoming chapter of the book.

Stay tuned for Chapter 4: Dad is still paying for his daughter’s insurance — and no one is happy.

About Scott Golden, co-founder
Golden & Cohen

Scott Golden is recognized as an industry leader in the small to mid-size insurance market, and ranks among the area’s top producers according to the Washington Business Journal’s Annual List.

He received a BS in Marketing from the University of Maryland in 1985, an MBA from George Washington University in 1990, and later a JD and LLM in taxation from the University of Baltimore. His advanced academic and legal degrees enable him to evaluate local and national mandates in conjunction with helping his clients prepare and implement the proper strategy.

Supporting the community is important to Scott, who advocates about the importance of lower health care rates on behalf of his clients. He has served on the Green Acres School Board of Trustees and sits on the board of ALS-DC in Maryland.

Scott is a native of upstate New York. He has been married to Golden & Cohen co-owner Stephanie Cohen since 1989. They have two children.

For more information about Scott’s insurance firm, visit www.golden-cohen.com contact Scott Golden by email at scott@golden-cohen.com.

About Stephanie Cohen

Since co-founding the Gaithersburg, Md., health care benefits firm Golden & Cohen in 1992, Stephanie Cohen has helped it grow into one of the largest female-owned companies in the Washington metropolitan region.

With more than two decades of experience in small group health insurance, disability programs and life insurance, she was a finalist for the Ernst & Young Entrepreneur of the Year Award, serves on the prestigious United HealthCare, Coventry, Aetna and Kaiser Broker Council. She is also a member of the Women’s President Organization, the District of Columbia Insurance Commissioner Advisory Council and The Greater Washington Health Underwriters.

A native of Maryland, Stephanie earned a B.S. in marketing from the University of Maryland in 1986. She has been married to Golden & Cohen co-owner Scott Golden for 20 years. They have two children.

For more information about Stephanie’s insurance firm, visit www.golden-cohen.com and contact Stephanie Cohen by email at Stephanie@golden-cohen.com.