Health Insurance and you

By Finbar Garcia LUTCF, FSS, MFA

There are people who live a very healthy lifestyle and are not always concerned about health insurance. During my 27 years in the insurance and financial services industry, I came across many like that, and then, there are those who plan.

Living a healthy lifestyle is something we all need to be conscious of but do not think that because you are healthy, you don’t need to plan and prepare for any unforeseen medical emergencies.

If you were to honestly look at your family’s medical history, and your immediate family, not in-law, you will notice some medical trends or issues that developed at certain ages, even if you go back three generations. These are the reasons why you should have a good medical plan started long before.

Those who exercise daily and believe that they won’t get sick need to take a deeper look. Medical issues can pop up at any time, even from unknown family medical history. Having a good health plan, either a Group Health Plan, Individual Health Plan, or both, will assist you in time of need. When compared to the cost of private health care services and the premiums you will pay, it’s a no-brainer.

To fully appreciate what a health plan can do, you need to understand the benefits and conditions. There are three specific areas that usually cause some concern, these are Deductibles, Co-Insurance, and Co-ordination of Benefits. Let me explain these.

Deductible – This is a preset annual limit that you must first cover. It can range between $200 to $1000, based on the plan you have. Your first few claims may be sufficient to take care of this, depending on the deductible size. {see fig 1}

Co-Insurance – After you have satisfied the deductible, this is where the ratios come in. This can be 80:20 or 70:30. This indicates what percentage you will be reimbursed after the deductible, either 80 or 70 per cent. {see fig 1}

Co-ordination of Benefits – This benefit will come in effect if you have two health plans, like Group and Individual or Group and Group. Okay, let me explain.

You are on your company’s Group Health plan and have an Individual Plan, or you are a dependent on your spouse’s Group Health Plan.

Your claim passes through your plan first, where you will be reimbursed based on your plan deductible and ratio, then the other plan will co-ordinate with your Group plan or Spouse Group plan to pay the difference like 30 or 20 per cent, that you did not receive. Both plans will have their specific terms and conditions that must be met first.

Health plans are divided into four main areas, these are what you should look at.

Major Medical – This is the coverage that will take care of major surgeries and other large expenses that the other sections of the plan could not cover because of predetermined limits. This benefit can range from $100,000 to $1,000,000.

Dental Benefits – This section of the plan, while the benefits may be small, will cover you for Basic and Restorative dental care and to some extent Orthodontic Treatment. This section carries its own deductible and will only apply if a claim is submitted. There is a waiting period between 3-6 months, depending on the provider. What this means, you should be on the plan long enough to cover the waiting period, and not join the plan just for the benefit.

Vision Benefit – Again, this section carries a limited benefit, it will cover you for any eye test and glasses prescribed. This section also gives you the option to have both glasses and contact lenses. It carries the same waiting period and deductible like the dental benefit.

Medical Benefits – This is a major part of the health plan that most look at. It’s a section that carries a comprehensive list of benefits and maximums allowed, either per policy year or ailment. While these amounts will be small, it’s really designed to assist with some level of reimbursement. If these benefits were to be 100 per cent reimbursed, then the cost of the plan would be out of reach for many, and only a few providers will offer them. {see fig 2} All these benefits will carry their own limits and conditions.

Most medical plans allow the insured to continue into retirement with reduced benefits, but you must be in the plan long before. There are certain age requirements that must be met if you are to stay as a dependent on a plan. Medicals will be needed before one is accepted and there may be exclusions based on medical history.

So, consider where you are now, and decide if this is for you.

Medical cost is not cheap, and it will cost more as time goes by.

“No matter how much you earn or how much you saved, your financial position CAN BE DENTED by an unexpected medical event…in a moment.”

Call me for more information on planning your financial future. Send your questions to myfinancialadvisor2020@gmail.com or call 620-1185.