Seven ways to avoid health insurance surprises

Linda Melone

Checking out at the drugstore is not the time to discover your prescription pills aren’t covered by your health insurance plan. Doing your homework can help you prevent embarrassing and costly situations like that. Here are seven ways to avoid surprises with your health insurance coverage.

1. Look at the entire picture.

Many people compare just premiums and choose between Premium A and Premium B, says Susan Pisano, a spokeswoman for America’s Health Insurance Plans, a trade organization for health insurers. “Or they’ll look only at the benefits or what’s covered,” she says.

Enrolling in a health savings account (HSA) may be one way to avoid health insurance surprises.

Instead, in order to evaluate the true value of a health insurance plan, look at the combination of the premium, the additional out-of-pocket expenses and the coverage. “Consider how it plays out according to what you think will be your situation,” Pisano says.

2. Don’t assume that a one-size insurance plan fits you.

The medical needs of a 60-year-old man with a history of heart disease differ from those a 32-year old woman ready to start a family, says Dr. Vicki Rackner, a patient advocate and founder of MedicalBridges.com in Mercer Island, Wash.

“Health insurance needs may vary even within a family,” Rackner says.

Rackner says the coverage for her son is a “well child” health plan with a low premium and high deductible. On the other hand, Rackner’s own coverage takes into account expensive-to-treat medical conditions more likely to happen to someone her age.

3. Examine all of your options.

Do you prefer being able to choose providers and hospitals from a large network or are you comfortable with a narrower network?

“A narrower network may save you money on premiums and with the same or comparable coverage,” says Lisa Oudt, a member of the Orange County (Calif.) Association of Health Underwriters.

Many times, the hospitals are the same from one network to another, but you’re paying for access to higher-cost doctors in a bigger network. “If you’re not seeing those higher-cost doctors, why pay the premium to have access to them?” Oudt says.

4. Do the math.

If you have a choice among health insurance plans at work, calculate what you’ll be paying out of pocket for your premium in each case and how much your employer will contributing, Pisano says. Figuring this out can help you get the most health insurance for your money.

In addition, how much more does it cost to include urgent care clinics in your insurance plan? If you have children, for example, and often need medical help over a weekend or outside your doctor’s office hours, the convenience may be worth the additional cost, Pisano says.

5. Don’t treat your insurance benefits like Monopoly money.

Some people have the attitude of “who cares how much it costs, my insurance company will pay,” Rackner says. In reality, there is no free lunch. “You/we all pay in the end,” Rackner says.

An example: Visiting a high-priced emergency room for relatively routine care instead of going to a lower-cost doctor’s office. “Don’t use the emergency room unless you really need it,” says Bill Walthouse, a registered representative of Dowd Financial Services LLC in Massachusetts.

If you need care after hours or on weekends, visit an urgent care center covered by your policy. At an emergency room, you’ll likely have to cough up a higher co-pay.

6. Consider a health savings account.

A health savings account (HSA) lets you pay for current health expenses and save for future medical expenses on a tax-free basis. The money is deposited on a pretax basis.

“In order to put money into an HSA, you are required to have a high-deductible health plan in effect for either you or your family,” Walthouse says.

To qualify for an HSA in 2011, a high-deductible plan must have a minimum deductible of $1,200 for individual coverage and $2,400 for family coverage. HSA contribution limits are $3,050 a year for an individual plan and $6,150 a year for a family plan.

7. Check your prescription coverage.

“Not all health insurance plans cover all medication or all brands,” Walthouse warns.

This is particularly important to keep in mind if you have a chronic health condition. For instance, costly drugs may be excluded if less expensive alternatives are available. Other medications that may not be covered include those for weight loss, fertility, sexual dysfunction and hair growth.