Recent research conducted by the National Association of Insurance Commissioners (NAIC)
indicates that cost and confusion regarding health insurance are significant
issues for consumers across all life stages, even for those with access to
health insurance through their employers or government programs like
Medicare. According to the NAIC survey:
- Only 36 percent of young singles said they knew the difference between an HMO and PPO. In addition, a
high number – 18 percent – said they had declined health insurance offered
by their employers as a way to save money on the portion of premiums they
are asked to contribute.
- More than half of respondents from established families said they
did not understand the terms under which they can elect to continue
their health coverage from their old employer if their employment ends,
as provided under COBRA (the Consolidated Omnibus Budget Reconciliation
Act). Specifically, they did not understand they had to pay the full
cost of their premiums, or that their coverage would end after 18
- Only 12 percent of older Americans thought they were very likely to
need long-term care, even though some data indicate that 60 percent are
likely to need long-term care at some point. In addition, those seniors
surveyed underestimated the cost of long-term care by 100 percent –
saying that expense would come to around $35,000 a year when the
national average is closer to $70,000 per year.
- Of those who have purchased medical discount cards (which typically
provide a discount off fees charged by participating doctors), 18% said
their experience had been very or somewhat negative.
Tips to Help Consumers Lower their Health Insurance Premiums
Health insurance – whether provided by an employer or purchased by
individuals – is expensive. Following are some ways consumers can control
- Married couples in situations where both spouses are offered health
insurance through their jobs should compare the coverage and costs
(premiums, co-pays and deductibles) to determine which policy is best
for the family.
- Always stay in-network when possible, making sure to get referrals
and pre-certifications as required by the plan.
- Keep all receipts for medical services, whether in- or
out-of-network. In the event you exceed your deductible, you may qualify
to take a tax deduction for out-of-pocket medical bills.
- Consider opening a Flexible Spending Account (FSA), if your employer
offers one, which allows you to set aside pre-tax dollars for
out-of-pocket medical expenses.
Health Insurance Tips for Different Life Stages
NAIC’s consumer web site, Insure U, explains the different types of health
insurance and gives focused tips to consumers based on their likely needs in
different life stages. For example:
- Young singles
who may not yet have a full-time job that offers health benefits should
be aware that in a growing number of states, single adult dependents may
be able to continue to get health coverage for an extended period
(ranging from 25 to 30 years old) under their parents’ health insurance
policies even if they are no longer full time students. They should
check with their state insurance department. In addition, some colleges
also offer graduates interim coverage for a limited time. Another
option: young people who can’t afford the health insurance offered by
their employers should consider a lower cost, high-deductible medical
plan to cover catastrophic medical costs.
couples expecting a child should make sure they register their
newborn with their health insurance provider within the deadline
required. They should also review their health plan to see whether
prenatal and neo-natal screening and tests, prenatal vitamins,
delivery costs (Cesarean and traditional) and what level of
pediatric care are covered.
families with children should consider Flexible Spending
Accounts if available to help pay for common childhood medical
problems such as allergy tests, braces and replacements for lost
eyeglasses, retainers and the like, which are often not covered by
basic health insurance. All workers who lose or change jobs should
know their rights to continue their health coverage under COBRA for
up to 18 months.
nesters/seniors who are under 65 and no longer
employed, but whose COBRA benefits have run out, should research
high deductible medical plans. At this life stage, consumers may
want to evaluate whether they still need disability insurance. Many
will want to decide whether long-term care insurance makes sense for
them (e.g., will they be able to afford the premiums into old age,
when most need to use such coverage).