3 Health Insurance Misconceptions

Misconception #1:

Co-insurance

Co-Insurance levels should be given careful analysis when buying insurance. A health insurance plan premium with an 80/20 or 20% co-insurance level is much higher typically than is a 50/50 or a 50% plan. Co-insurance or shared costs between the insured and the insurance company normally have stop losses or Maximum Out-Of-Pocket amounts to protect you against a catastrophic event. Make sure there is, and you know what the stop loss is on the plan you are looking at. Let's further examine and break down co-insurance.

Example:

Health insurance plan A has a $2,000 deductible and is an 80/20 plan. (Meaning you co-insure 20% after your deductible of $2,000) Let’s say your stop loss (maximum out of pocket) is $3,000, (which means you're total out of pocket would be $5,000 on this plan and the plan costs $380 per month for a family of 5.

On the other hand health insurance plan B has a $5,000 deductible but is a 100% plan. (Meaning you have no co-insurance after your deductible of $5,000) Your stop loss (maximum out of pocket) is zero after your deductible and this plan costs you $290 per month.

Both plans have 100% coverage after your stop loss, (maximum out of pocket) has been met.

Your stop loss (maximum out of pocket) for plan A would be $5,000 per year. ($2,000 deductible + $3,000 co-insurance).

Your stop loss (maximum out of pocket) for the plan B would be $5,000 per year as well. ($5,000 deductible + $0 co-insurance).

Your total risk "potential loss" or exposure would be $5,000 in any given year on either plan.

So in this example, on plan A you would be paying an extra $1,080 per year for the exact same out of pocket catastrophic exposure compared to plan B.

Wouldn’t it make more sense financially to select plan B as opposed to plan A? When it comes to choosing a health plan these are the things most people overlook, or fail to understand. When you choose Colorado Health Solutions to represent you, we will inform and educate you of these types of things to make sure you select the right plan at a price you can afford.

Misconception #2:

Deductibles

Health insurance companies will charge you a "fool's premium" for a very low deductible. By "fool's premium" we mean that to lower your deductible from say $2,000 to $500, they will charge you an additional $2,880 a year. So unless you manage to have a catastrophic event in the first 6 months of your plan, you will always be the loser. Look carefully at the cost for different deductibles and ask yourself a couple questions:

How much does it cost for the next lowest and the next highest deductible?

How many months will it take before you have lost the advantage of the lower deductible by paying the difference in premiums?

Of course you could wind up in the hospital next month and call me up with an "I told you so". However, 99% of you will never reach your deductible. There is normally a trade off between costs and benefits and typically it's represented graphically by a curve of "diminishing returns".

Misconception #3:

Co-pays

A $20 doctor office co-pay is much more expensive than a $40 doctor office co-pay! How you ask? Let’s take a closer look.

Let's assume that the premium associated with a $20 co-pay is an additional $174 per month in premium for a family of 4 when compared to a $40 co-pay. (This is a real scenario)

In this scenario you would be paying an additional premium of $174 per month ($2,088 per year) to protect yourself against a "potential loss" or exposure of $20 each time you visited the doctor’s office. To come out even with the $20 co-pay you'd have to visit the doctor about 105 times a year to come out even! Don't pay a "fools premium" for benefits that are offset by increased premiums. It pays to do a little math when looking at cost versus benefits when purchasing health insurance. Again we can help you decipher this and choose the right plan.

We hope this will help you now or sometime in the future, what I tell my clients is this...You already pay enough for your health insurance, don't pay more than you have to!

Health insurance carriers are coming out with new more affordable plans all the time, how will you know if one is right for you? Would your agent call you if there was one better suited for your needs? Most likely not! Most agents/brokers will only talk to you if there is something in it for them! We here at Colorado Health Solutions have a completely different attitude and approach, if there is something that becomes available best suited for you and your family we will let you know!

There has been a new major medical plan that was just released that is on average 20-40% less than many of the other carriers. If you'd like to get a quote on this plan to either get health insurance or lower your premiums just visit our website today, we'd be happy to help. Again, don't pay more than you have to when it comes to your health insurance!

Regards,

Your Colorado Health Solutions Team

Kris J. Willy | Owner
Colorado Health Solutions
720.920.9697 Office
www.ColoradoHealthSolutions.com
Kris@ColoradoHealthSolutions.com

Car Insurance

For any entrepreneur who owns a car, or whose employees use company cars, you need to read this. Fewer things are more important to your company and its financial longevity than protecting those assets you use on a daily basis. Even more important is to understand exactly how to do that. Car insurance is a complicated business, but this article is here to help break it down into its most basic form; understand what you are dealing with, what kind of protection you need the most, and how to keep your costs down low.

Protecting your car is primarily in case of traffic accidents, although it comes in handy when dealing with the after effects of bad weather or theft as well. Depending on the package you purchase, some or all of the insured party, the insured vehicle, and any third parties involved could be covered. While national laws typically make it illegal to drive without any third party insurance, coverage against the other two are generally optional.

Depending on where you live, your premiums will either be mandated by the government or decided upon by your insurance company. Although the company will determine the amount in accordance with government regulations, it has more freedom to take into account other factors it believes will have an impact on any future claims. These include the specifics of the car itself, your own age and gender as the driver, and what distances the car is used for.

Although it’s a contentious issue, car insurance companies cite undisputable statistics that suggest men not only drive more miles than women each year, but that they also have a higher accident rate than their female counterparts. So, too, are there higher premiums for teenage drivers, even those who as of yet have no driving record – good or bad. It isn’t until you hit 25 years old that insurance companies start to give you a bit of a break.

Whatever your gender or age, there are different types of coverage you can purchase on top of the minimum required. Liability insurance covers the fixed amount of damages that the driver is legally obliged to pay as a result of an accident or negligence. Collision coverage protects any insured vehicle that has been involved in an accident. It will pay for repairs to the damaged car, or provide the entire cash value of the vehicle if the company decides it is not repairable.

While those are the two main types of coverage, there are many others that are available to help protect your auto. Comprehensive insurance provides coverage for anything other than collisions, such as fire or poor weather. Uninsured coverage helps when a third party does not have enough in the situation. Loss of Use pays for your rental car while your damaged one is being repaired. Finally, there is Roadside Assistance, which helps pay for the cost of towing your car.

Car insurance is becoming an increasingly complicated affair. Insurance companies can now even install GPS-based technology in cars to report back to them on your driving habits. What isn’t complicated, however, is in understanding the need for adequate auto protection.