6 Things You Should Know About Health Insurance

No matter your age, understanding health insurance is tricky. Is your policy best? Are there ways to save money while still getting coverage? Are there benefits to look for after you turn a certain age? We spoke with health insurance experts to sort out the facts.

1) Beware of Scams: Always Go with a Reputable Plan
If a health insurer is trying to sell you a policy that seems too good to be true, it probably is, says Cheryl Fish-Parcham, Deputy Director of Health Policy at Families USA, a nonprofit healthcare advocacy organization. To make sure the plan you’re thinking of buying isn’t a scam, first ask if the representative if the company is licensed by the state. Health insurance plans—and the agents or brokers who sell them—must be licensed by state government.

Other red flags to watch out for, from the New Hampshire Insurance Department:

• Healthcare coverage with no mention of an insurance company on the advertising   
• Plans that want you to enroll by a specific deadline  
• Plans that cannot tell you who is insuring the plan until after you enroll and make payment 
• Plans that only enroll you using automatic debit from your account or by credit card not by check 

2) Coverage: 63 Is an Important Number
And we're not talking age. Sixty-three days (or about two months) is the maximum gap in health insurance coverage before things get tricky, warns Maura Carley, President and CEO of the patient advocacy firm, Healthcare Navigation, and author of Health Insurance: Navigating Traps & Gaps. If you've been laid off or you quit your job, you only have 63 days to enroll in COBRA, which extends the group health insurance coverage you were getting through your employer. COBRA insurance typically costs less than an individual health plan, since it lumps you into your previous group plan rate, but you will be paying more once an employer is no longer subsidizing the monthly premiums. And when you retire, you have the right to COBRA coverage for up to 18 months.

Another big reason to avoid a lapse of more than 63 days: preexisting conditions. If you have a preexisting condition and are unemployed for more than 63 days, your new employer's health insurance company is not required to cover you based on that preexisting condition. But if you go from job to job, and enroll within 63 days, you get health insurance, no questions asked. 

3) Preexisting Condition: You Have Options
If you are denied insurance due to a pre-existing condition, consider the special PCIP plan, says Fish-Parchman. PCIP is a government-run program (spawned from President Obama's Patient Protection and Affordable Care Act) that covers anyone with a pre-existing medical condition who has been without health insurance for at least 6 months—and you can't be turned down based on your income. Health benefits include primary and specialty care, hospital care, prescription drugs, and preventive care when you see an in-network doctor.

4) Claims: You Don't Have to Take "No" for an Answer
Health insurance claim-denial rates vary widely, between 11 and 24 percent, from state to state, according to a 2011 Private Health Insurance report by the U.S. Government Accountability Office. But if your insurance company refuses to pay a claim, and you can't argue them otherwise, you have a legal right to appeal at the state or federal level, says Carley. Appealing a denial likely will be worth the trouble—that same government report said coverage denials are reversed a whopping 40 percent of the time. "Perseverance is a large part of successful appeals," says Carley.  Healthcare.gov offeres a step-by-step explanation of how to appeal a denied health insurance claim.

5) Fraud Is Not Your Friend
Lying to get health insurance coverage is never a good idea, says Carley. Say you own your own business that has a group coverage plan. And your spouse loses his job or your grandchild turns 26 and is no longer covered under her parents' health insurance plan. What's the harm in putting your spouse or your grandchild on the payroll and enrolling them in group coverage until they get back on their feet? A lot, says Carley. You may think you're solving a problem, but that white lie could cause big problems if a health insurance company decided to investigate. You'd have no legal ground to stand on and the consequences could prove to be astronomically expensive. 

6) If You're Thinking About a Switch, Choose Your Plan Wisely
It may be a headache to compare the benefits you have now to those for a policy you’re considering, but you'll thank yourself later, says Fish-Parcham. Four things to keep in mind:

• Check the provider network. "Look at the plan’s provider directory to see if the doctors that you now use are in-network," says Fish-Parcham. "If your current doctors are not in-network, check to see how long it will take you to get an appointment with a new doctor and be sure that any ongoing treatment won't be disrupted by that switch." With all plans, choosing an in-network doctor will offer you the most financial protection.
• Be aware of deductibles. Most plans cover check-ups and other preventive care, but you will often have to meet an out-of-pocket deductible before your insurance starts to pay for treatment. "If you don’t have enough savings to pay for care while you meet a deductible, a plan with a high deductible may not be a good choice," says Fish-Parcham.
• Find out the limits in the plan’s coverage. Some plans include annual limits in the number of days or visits of a service they will cover, such as mental/behavioral health, physical therapy sessions, and some prescription drugs.
• Be aware of copays and coinsurance. You might have to pay a flat fee for a doctor visit or other services, or you may have to pay a percentage of the costs for each service.