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Health Insurance – Fact vs. Fiction – Dispelling popular “myths”

By Don Moyle

Fiction #1: I can’t really control how much I pay for health insurance.
Fact: If you think you’re paying too much for health insurance, you probably are. A simple check of the market and understanding your options – including various tax advantages – can save significant money now and in the future.

For example: A family of four was paying $2,100 per month for COBRA coverage. After reviewing their options, they purchased a high-deductible individual health plan with a Health Savings Account for $900 per month – a savings of over $14,000 per year.

Fiction #2: Health insurance options are very limited.
Fact: There are more options than you think; you just have to take a minute to look.

For example: In Connecticut there are over 100 individual private health insurance plans to choose from, with varying levels of coverage and costs. In addition, there are even more plan options available to businesses. Plus there are several state-sponsored plans for those who qualify.

Fiction #3: Group health insurance policies are less expensive than individual health insurance policies.
Fact: It depends, on a variety of factors.

For example: If you are in good health and don’t need all the “bells and whistles” in a health insurance plan, then an individual policy will definitely be less expensive. The reason is that individual policies today are medically underwritten. For people with health issues that may not qualify for individual coverage, a “guaranteed issue” group policy may be the only option. Because of this, individual health insurance policies are almost always less expensive than group health policies.

Fiction #4: For a routine doctor office visit, a plan that has office visit copays costs the patient much less than what the physician actually charges for the visit.
Fact: Not necessarily, especially when the copay approaches $40 or $50 – which is not uncommon today.

For example: The “retail” charge for a routine office visit might be $110. However, if the doctor is “in network”, then the “contract rate” could be as low as $55. This is the fee that the doctor agrees to accept for patients that are covered by the insurance company. So in essence, you are paying almost the entire allowable charge for that visit. Furthermore, if the visit is paid for with pre-tax funds from a health savings account, then your net out-of-pocket expense is even less.

The bottom line: Dispel the myths, know your options and get the facts on health insurance.

About Don Moyle

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