Avoid a bad California health plan

How to Avoid A Bad Insurance Policy

Most California insurance companies treat their customers in a professional, courteous manner, solving problems and paying claims in a timely manner. However, there are, unfortunately, always exceptions to the rule.

How can you keep yourself from being taken advantage of, or worse, being left unprotected when you need the coverage the most?

Here are a few things to keep in mind when choosing your policy.

If it sounds too good to be true, it probably is. Adequate health coverage costs money, and medical expenses continue inexorably to rise. Be wary of brochures or insurance agents who claim all kinds of coverage for very little money. They may be marketing a low premium, but what that sometimes means is that you will have to bear disastrously higher out-of-pocket expenses in a major medical event than you would from a reliable, traditional carrier. For example: an insuree thought he had gotten a good deal on an insurance policy, but then found out, after being admitted to a hospital following a heart attack, that the policy only paid $100 a day toward his hospital room expenses--when the hospital room charge was a $10,000 a day. Guess who had to make up the difference? Some second tier carriers will come into the market with very low rates and when the claims come in 3-5 years later, they pull out of the market or raise the rates significantly. If your health has changed, you may be unable to a better carrier or plan.

Read the fine print. The policy should spell out what's covered and what's not. Generally this covers normal medical expenses. Hospitalization would be covered; cosmetic plastic surgery might not be. If you see something you don't understand, or which looks suspicious, ask about it. It may save you a lot of grief and financial hardship in the long run.

Watch out for caps. Be careful for caps on hospital care or other services. Some plans on the market have caps on the hospital care of $600 (or other amounts). You might as well not have health coverage at all since hospital bills can be 10's of thousand if not 100's of thousands of dollar. Some plans on the market are starting to cap brand name medication which can also be very dangerous. The trend going forward is towards very targeted and very expensive medication for conditions that are more exotic. Some of the new (and very successful medications) on the market are 10's of thousands of dollars per year. Having a $1000 brand name cap will not do much for you or your family.

Enquire about the company's rating. Legitimate insurance carriers are usually rated by by AM Best. A strong carrier will usually be rated A or at least a B Plus. If a company will not provide its rating, or the rating is a B or lower, it might be wise to shop someplace else.

Check the National Association of Insurance Commisssioners (NAIC) for guidance. You can find them on the Internet. They assign numbers to legitimate insurance carriers. IF the NAIC hasn't heard of a company, or the carrier doesn't provide this information, find another insurance company. You can also check with your State's Department of Insurance for more information on carriers, complaints, and plans available on the market.

Check out the California health agent. Most state departments of insurance lists complaints on their web sites against agents. If an agent has many complaints, he or she is not the right person for you. You can also check on the status of the agent's license. Is it current? Has it been withdrawn for any reason? Has she or he met his training requirements? All agents should display their license information in correspondence. You can find our information at our About Us page below.

"Bait and switch." Rates will increase based on the cost of doing business even for legitimate carriers, but sometimes questionable carriers will "lowball" rates to generate new business. Then the rates go up sharply after someone has been on the policy for a relatively short period of time. . Also, by law a carrier has to increase the premium rates for a whole group, not on an individual basis. Check to see when the carrier last raised its rates. If there have been multiple rate increases over a year's period, you might want to look further.