Navigation Links
Hazardous Health Plans: Consumer Reports Investigation Finds Serious Gaps in Individual Health Insurance Policies
Date:4/6/2009

Insurance Loopholes and Limits can Leave Consumers with Huge Medical Debts; Consumer Reports Offers Tips on How People can Protect Themselves

YONKERS, N.Y., April 6 /PRNewswire-USNewswire/ -- A new Consumer Reports investigation finds that many people who believe they have good health insurance actually have coverage so riddled with loopholes, limits, and exclusions that it won't come close to covering their expenses if they fall seriously ill. The full report is available in the May 2009 issue of Consumer Reports and online www.consumerreportsenespanol.org. The report includes a table listing the staggering treatment costs of many common conditions, leading off with late-stage colon cancer at $285,946.

At issue are so-called individual plans that consumers sometimes get on their own after losing their jobs or if they are self-employed. An estimated 14,000 Americans a day are losing their job-based coverage, cites Consumer Reports, and many may be considering individual insurance for the first time in their lives.

"Individual insurance has become a nightmare for consumers," says Nancy Metcalf, senior program editor at Consumer Reports. "It's expensive and difficult to get for people who have a less-than-perfect medical history. And people who do purchase a policy often don't understand what they've bought until it's too late and they're faced with hospital bills that their plan won't pay."

One couple, Janice and Gary Clausen of Audubon, Iowa, told Consumer Reports that they expect to be paying off medical debt for the rest of their lives because they didn't realize how much treatment can cost. The United Healthcare limited benefit plan they bought through AARP proved hopelessly inadequate after Gary Clausen received a diagnosis of colon cancer. His treatment cost well over $200,000.

Findings Show How Difficult it is for Consumers to Get Good Health Policies on Their Own

For its investigation, Consumer Reports hired a national expert to help evaluate a range of health plan policies and interviewed consumers who bought those policies, as well as insurance experts and regulators to learn more. Among the findings from the investigation:

  • Health insurance policies with gaping holes are offered by all kinds of insurers -- large and small. Most states do not task regulators with evaluating overall coverage.
  • Disclosure requirements about coverage gaps are weak or nonexistent, so it's difficult for consumers to figure out in advance what a policy does or doesn't cover.
  • In many states, people of modest means may have no good options for individual coverage. Plans with affordable premiums can leave them with crushing medical debt if they fall seriously ill, and plans with adequate coverage may have huge premiums.

"A good plan should pay for necessary care without leaving you with lots of debt," Metcalf says. "Decent insurance covers more than just routine care -- it's supposed to protect you in case of a catastrophically expensive illness. But many individual plans do nowhere near this job."

Consumer Reports identifies seven clues that a health plan might be junk:

  • Limited benefits. Do everything in your power to avoid buying a product labeled "limited benefit" or "not major medical" insurance -- a sure warning sign of inadequate coverage.
  • Low overall coverage limits. Health care is costly. Policies with coverage limits of $25,000 or even $100,000 are not adequate.
  • "Affordable" premiums. If premiums are very low, chances are good that the policy doesn't cover very much. To check how much a comprehensive plan might cost, Consumer Reports recommends visiting ehealthinsurance.com and examining the more expensive plans available in one's state.
  • No coverage for important medical care. If the policy doesn't describe coverage for a specific medical service, such as outpatient chemotherapy, assume that it's not covered.
  • Ceilings on categories of care. A $900-a-day maximum benefit for hospital expenses doesn't pay much of a $45,000 bill for heart bypass surgery. Consumer Reports advises consumers to make sure that their plan covers hospital and outpatient medical treatment, doctor visits, drugs, and diagnostic and imaging tests without a dollar limit.
  • Limitless out-of-pocket costs. Consumers should avoid policies that fail to specify a maximum amount they'll have to pay before the insurer begins covering 100 percent of expenses. Some policies, for example, don't count co-payments for doctor visits or prescription drugs toward the maximum.
  • Random gotchas. The AARP policy that the Clausens bought began covering hospital care on the second day. That may seem benign, except that the first day is almost always the most expensive, because it usually includes charges for surgery and emergency-room diagnostic tests and treatments.

Why all the confusion about health insurance? Consumer Reports says one reason is that health insurance is regulated by the states, not by the federal government. Most states (Massachusetts and New York are prominent exceptions) do not have a standard definition of what constitutes health insurance.

How Consumers Can Protect Themselves

A good plan will cover legitimate health care without burdening consumers with oversized debt. Consumer Reports offers the following advice for choosing a health plan:

  • Seek out comprehensive coverage. Try to find a plan that has no caps on specific coverages but especially on hospital coverage, outpatient treatment, doctor visits, drugs, and diagnostic and imaging tests. When it comes to lifetime coverage maximums, unlimited is best and $2 million should be the minimum. Ideally, there should be a single deductible for everything or, at most, one deductible for drugs and one for everything else. And the policy should pay for 100 percent of all expenses once out-of-pocket payments hit a certain amount, such as $5,000 or $10,000.
  • Consider tradeoffs carefully. If a tradeoff is necessary to lower health premiums, opt for a higher deductible and a higher out-of-pocket limit rather than fixed dollar limits on services. Policy limits on services can be exhausted quickly, leaving consumers with tens of thousands of dollars in medical bills to pay on their own. Unfortunately, consumers who can't afford either the higher premiums of a more comprehensive policy or high deductibles really have no good choices.
  • Check out the policy and company. First, look for the warning signs identified by Consumer Reports. Next, do some research. The National Association of Insurance Commissioners posts complaint information online at www.naic.org. Running a Google search on companies and policies can help, too.
  • Don't rely on the salesperson's word. Ask for an advance copy of the actual policy (though you may not always get it) and read the small print before signing up. Ask your agent or sales representative to give you written answers to your questions. That way, if the information turns out to be wrong, you can complain.

MAY 2009

The material above is intended for legitimate news entities only; it may not be used for commercial or promotional purposes. Consumer Reports(R) is published by Consumers Union, an expert, independent nonprofit organization whose mission is to work for a fair, just, and safe marketplace for all consumers and to empower consumers to protect themselves. To achieve this mission, we test, inform, and protect. To maintain our independence and impartiality, Consumers Union accepts no outside advertising, no free test samples, and has no agenda other than the interests of consumers. Consumers Union supports itself through the sale of our information products and services, individual contributions, and a few noncommercial grants.


'/>"/>
SOURCE Consumer Reports
Copyright©2009 PR Newswire.
All rights reserved

Related medicine news :

1. Environmental Defense Fund Welcomes EPA Clean Air Standards to Reduce Hazardous Diesel Pollution
2. Car Cell Phone Use More Hazardous Than Chat With Passengers
3. Alcohol sponsorship linked to hazardous drinking in sportspeople
4. Hazardous Drinking More Common Than Thought
5. Baxa Corporation Announces Safe Handling and Preparation of Hazardous Drugs Course Offering at its STAR Center Training Facility
6. EPA Focus on Hazardous Pharmaceutical Waste: White Paper Helps Hospitals Avoid Fines
7. Hazardous Advanced Micro Devices (A.M.D.) Clean Room Chemicals Caused Multiple Birth Defects, Lawsuit Alleges
8. Diabetes Ten City Challenge Reduces Health Care Costs and Improves Patient Health
9. Microsoft and Microsoft Health Users Group Announce Winners of Microsoft HUG 2009 Innovation Awards
10. Companion Benefit Alternatives Awarded Silver Honors for Best Practices in Health Plans and Health Networks by URAC
11. Pfizer Animal Health Becomes Leadership Contributor to the NTRA Safety and Integrity Alliance
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:8/22/2017)... ... August 22, 2017 , ... The old ... is as simple as eating healthy foods. But this well-known piece of nutrition ... insulin, or breaking apart carbohydrates—depends not only on properties of the food but ...
(Date:8/22/2017)... ... 22, 2017 , ... Nurses at Apple Rehab Watch Hill , a ... training and certification in Closed Pulse Irrigation™ (CPI) for wound care. This ... the Centers for Medicare and Medicaid Services, to have a CPI machine that will ...
(Date:8/22/2017)... ... August 22, 2017 , ... “Covert Awakening”: ... creation of published author, Julianne Hale, a consultant for the Intelligence Community. ... expert focusing on the Near East region. Julianne has written hundreds of ...
(Date:8/22/2017)... Indiana (PRWEB) , ... August 22, 2017 , ... Although ... Fourth of July, many communities have begun providing weekend displays, and numerous households celebrate ... most humans, they can be downright terrifying for pets. , Kris Zambo, owner ...
(Date:8/21/2017)... , ... August 21, 2017 , ... FCPX LUT Monochromatic ... Editors can quickly and easily add washed color grades to footage. A LUT is ... changes every pixel’s color to the corresponding color indicated by the table. This pack ...
Breaking Medicine News(10 mins):
(Date:8/17/2017)... , Aug. 17, 2017 MJAC2017 , the ... Canna Broadcast Media, today reveals its leading lineup. ... Inc., a global cannabis innovator specializing in the development of ... the conference. MassRoots, Rambridge™ and The Green Organic Dutchman are ... and Namaste Vapes™ as silver sponsors. ...
(Date:8/15/2017)... -- Diplomat Pharmacy, Inc. (NYSE: DPLO), is now dispensing ... residents. Naloxone is available without a prescription ... G-3320 Beecher Road. ... is intended to block or reverse the effects of ... consciousness. The medication is often carried by first responders ...
(Date:8/14/2017)... PETACH TIKVAH, Israel , Aug. 15, ... leading developer of adult stem cell technologies for neurodegenerative ... June 30, 2017. ... our pivotal Phase 3 trial to investigate NurOwn ® ... and Chief Executive Officer of BrainStorm. "We have agreements ...
Breaking Medicine Technology: