Whether it is the Individual Under 65 Marketplace, Medicare Supplements, or Employer-sponsored Health Insurance, the best consumer is an educated consumer.  An educated consumer has Health Literacy and is leery of any claims about double digit premium savings or return of unused benefits.  An educated consumer does more research about their individual health care needs and health insurance than they do before purchasing a flat screen TV.


If it sounds too good to be true…you know the cliché.  Let us pull back the veil on health insurance.


  • The Rates are The Rates – Carriers annually file their plans and rates for approval with the Office of Insurance Regulation and the Department of Financial Services. This was established to protect consumers.  All advisors have the same community-rated individual and small group rates (less than 50 employees).  Fully insured products are underwritten based on age, home zip code, and effective date.  An advisor has no control over the premium and there is no return of unused benefits.


  • Not All Health Plans are Health Insurance Plans – While the rates are the rates, conversely not all health plans are health insurance plans. Beware of the misrepresentation of “Skinny Plans” or “Short-term Plans” or “Indemnity Plans” as insurance-based products.  In cold calls, advertising, and social media posts they will be touted as products with double-digit premium savings, but they are not insurance-based products.  They are not “Catastrophic Plans” either since there are limits to their coverage.  They are reimbursement plans designed to fill gaps in coverage, not to be long-term insurance-backed solutions.


  • Networks are Important – Education and communication is the key to mitigating coverage and access-to-care disruptions. Whether you are an individual or an employer, make certain you have a complete understanding of any limitations of the medical and pharmacy networks you are considering.  Which hospitals are in the network?  What about physician groups?  Does the plan have a closed formulary (i.e., are some medications excluded) or limited pharmacy providers?


  • Combined Medical and Pharmacy Deductibles – To remain affordable and within the metallic actuarial values (i.e., Bronze, Silver, Gold), some carrier plans have instituted either an Rx deductible before tier copays begin, or they require the member to meet the entire medical deductible before Rx tier copays begin. While these plans may work for individuals and families that do not have medication concerns, these plans can dramatically impact the finances of those that require preventive or chronic condition management.


  • Medical Expense Sharing Programs – These approaches were a response to the Affordable Care Act, but do not work for everyone. The application process may include answering medical questions and pre-existing condition exclusions.  These plans may institute lifetime maximums and/or include the ability for the program to refuse claims or drop coverage.  Read the fine print.  Understand how the programs work and how they could potentially impact you and/or your family.  Do your own research and internet search “medical sharing lawsuits.”


The best next step for individuals and organizations is to consult with an advisor to start the conversation and determine the strategy that uniquely meets their needs.



DISCLAIMER: This update is general in nature.  The information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice, financial advice and/or the advice of a licensed insurance or certified human resource professional.

© SandStone Insurance Partners 2022

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