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Alabama Health Insurance Buyer’s Guide

I realize that reading about Alabama health insurance is not very interesting. That is why I put together this guide. It gives you the information you need to know in simple terms. Plus, it only takes a few minutes to read.

Many people that we talk to tell us "I don't know what I want." If you do not know what you want and if you have no idea what the difference is between the different plans, how are you ever going to intelligently select a plan?

Definitely not the way to shop for an Alabama health insurance plan - or anything else for that matter. Health insurance is not cheap and you need to invest at least 5 to 10 minutes of your time reading through this page.

Read this page and then give us a call. We are in the office Monday to Thursday from 9 AM to 8 PM and on Friday until 5 PM. You can even call on Saturday between 10 AM and Noon.

You can call us at 800-272-0512

The Basics

First let me explain the most basic health insurance terms. There are only three terms you need to know to have an intelligent conversation about health insurance; co-pay, deductible and coinsurance.

If you can master these three terms you will understand what is being offered to you and be in a much better position to make an informed decision as to which plan will be best for you.

Co-pay – If a plan has a co-pay for office visits, it is the amount you pay for that visit to your doctor. So, if the plan has a $35 co-pay for an office visit, you pay only $35 to see the doctor. You do NOT have to first meet any deductible. This benefit goes into effect as soon as the plan begins. The co-pay does NOT count towards your deductible.

I keep repeating this for a reason. Here is a typical conversation we have on the phone.

 

Agent: "The plan has a $35 co-pay for doctor visits. You do not have to meet any deductible at all for this feature. The day the plan begins you can go to the doctor for $35. Remember, there is no deductible at all for the co-pay feature. I want to say this one more time because it is important, you DO NOT have to meet a deductible to use the co-pay feature."

Caller: "So, before I can go to the doctor I have to meet a deductible or nothing will be covered?"

Some plans have co-pays for prescriptions as well as office visits. It is the same thing. You go to the pharmacy, fill the prescription and pay a co-pay. It does not matter how much the prescription costs.

Let me warn you that most plans, if they do have a prescription co-pay, cover generic or lower cost prescriptions only. They will impose a deductible on the more expensive prescriptions. Once you meet the deductible, then you will have a co-pay for those as well. This is a separate prescription deductible and has nothing to do with anything other than prescriptions.

Deductible – Everything that is not a co-pay goes towards your deductible. A deductible on Alabama health insurance is just like a deductible on any other type of insurance. It is the amount you have to pay before the insurance company starts to cover the expenses.

How do I really know what goes against the deductible? Simple, ask your self the following two questions:

  1. Am I at the doctor’s office for an appointment? If that answer is no, then ask the next question.
  2. Am I at the pharmacy filling a prescription?

    If that answer to both questions is "no", then the expense goes against the deductible. This includes, but is not limited to hospitals, surgery and emergency rooms.

All plans have deductibles. The higher the deductible, the lower the premiums.

You can eliminate the deductible relatively inexpensively with a secondary plan. Ask us about it.

Coinsurance – This is the one that throws a lot of you. Coinsurance is that 80/20 thing. I will explain it.

If your plan says something like this: You have a $1,000 deductible. Afterwards, you are responsible for 20% of the next $10,000 in expenses. It means that after the first $1,000 (your deductible) you must pay 20% or $2,000 towards the next $10,000 in expenses. The maximum amount you are liable for in a given plan year is the deductible (in this case we are using $1,000) and the coinsurance ($2,000 which is 20% of $10,000) or a total of $3,000 ($1,000 + $2,000).

Remember, if the coinsurance is 20% of $10,000, you are responsible for only $2,000 not $10,000.

You now know more than most people about health insurance. In another 5 minutes or so, you will know more than a lot Alabama health insurance agents.

I think a question and answer format makes the rest of this easier to read and understand.

What deductible should I get?

When the agent explains a plan to you, ask for the rates of two or three different deductibles. That way you can see how much more you are paying for insurance versus how much less you would need to pay in the event of a major medical problem. There has to be a balance between the two. The higher the deductible, the lower the premium.

Lord willing, most of you will never meet your deductible. You might see the doctor a few times in a year or just get a physical. But whether the deductible is $1,000 or $5,000, it is rare that anyone meets it.

That is why you should seriously consider a higher deductible plan. Do not pay $80 a month more ($960 a year) in premium to lower your deductible by $1,500. It just does not make sense. Can something happen to you next week? Sure, but the chances are very, very low.

Look at it another way. If you saved $80 a month on premiums and took a $2,500 deductible instead of a $1,000 deductible, after 18 months you would have saved about $1,500 in premiums. If anything happened, you have the $1,500. If nothing happened, you have 1500 bucks in your pocket. Each and every month after that, you continue to save the $80. What if you stay healthy for five years and then need to have your gall bladder out? You saved nearly $5,000 on insurance premiums but only have to pay $1,500 more on your hospital bill. You win!

Approach this like a businessman approaches any purchase decision. Use what is known as a cost-benefit analysis. “If I spend another $10 a month, am I getting enough benefit to warrant it?”

Call me and I will help you.

USER TIP: We sell secondary plans that will cover 100% of your deductible if you are hospitalized. The plans are very inexpensive. So, in the aforementioned situation, a 40 year old male can get a plan that will cover the entire $2,500 deductible if he is in the hospital for $12 a month.

Before you decide on a deductible, always ask me about a secondary plan that will cover the deductible. You will have less out of pocket expenses with lower premiums.

Will Alabama health insurance plans cover pre-existing conditions?

The exact answer to this question is “maybe”. It depends on a few things:

  1. Do you currently have health insurance or have you had any in the last 62 days? If so, how long have you had health insurance with no breaks in coverage of more than 62 days?
  1. What is the pre-existing condition? Some pre-existing conditions are such that they will not even give you health insurance at all. Sometimes they will cover it but charge you a few dollars a month more. Or, they might exclude it for a period of time ranging from one year to forever.

If you are one of those nut-jobs who call me up and tell me “If they won’t cover my pre-existing condition why the #@&% do I need health insurance”, please call someone else. You get fire insurance in case your house burns down. You do not get it after your house burns down. The same goes for health insurance.

But, please call me to discuss your pre-existing conditions. It might not be a big deal at all.

What happens if I am declined for health insurance?

I am sorry to say that some of you will have pre-existing conditions that will not permit you to get any health insurance at all. If that is the case, we have special plans that we can offer you. They are not full major medical but do pay out a substantial amount towards your medical expenses.

These are not discount cards. We do not sell discount cards and do not recommend them.

Sometimes one health insurance company will decline you but we can find another that will take you. Or, we can offer you advice on how to make yourself a viable candidate for a full Alabama health insurance plan. Once again, call us - 800-272-0512.

Do any Alabama health insurance plans cover maternity?

Yes, we do have Alabama major medical plans with full coverage for maternity. But, you cannot already be pregnant. I guess you knew that.

I have heard about Health Savings Accounts. What are they and would they be right for me?

A Health Savings Account or HSA consists of two parts.

The first part is a regular Alabama major medical plan with a high deductible. You pay a premium for this plan each month like you would any other type of plan.

The second part, which is optional, is the health savings account.

This health savings account is an interest bearing account in your name. It earns interest and does not disappear at the end of the year. It is your money, in your own account.

Here is the special part.

For every dollar you put into the savings account (not what you pay for premiums), you can take a dollar off of your gross income at tax time. If you are in a 20% tax bracket and contribute $200 a month to your savings account or $2,400 a year, Uncle Sam is giving you back 20% or $480. Plus the account earns interest. That is a darn good return on your money, 20% plus whatever interest the account pays.

If you use the money in the health savings account for a medical expense, even one that is not covered by the plan, you will never pay tax on the money. You use the money in the health savings account to pay for doctors, labs, dentists, eyeglasses, etc.

The important thing to remember is that the plans are very inexpensive (relatively so) and there is a great tax advantage that makes them even less expensive.

If you want to know whether this is the right plan for you, call me at 800-272-0512.

Can I insure just my child(ren)?

Yes, that is no problem at all. Many people have their health insurance paid for by an employer. But, when they want to add their children, the rates get ridiculous. We can insure them for less than your plan at work.

What is a PPO network?

I should really move this to the top of the page. That is how important this is.

A PPO plan has a network of doctors, labs and hospitals. They have agreed to charge a discounted rate to the insurance company. If you have a PPO plan and use a provider that is in the network, you are entitled to the agreed upon discounted rate. It does not matter whether you have met your deductible or not.

The discounts can be sizable. A lab fee that would normally cost you $200 might be re-priced down to $50. You pay the PPO rate of $50.

Always try and use a medical provider that is in the PPO network.

You always tell everyone to get a high deductible plan and do not worry about doctor or prescription co-pays. Are you saying I do not need them?

If you have a PPO major medical plan and go to a network physician, that physician can only charge you the network price for the visit. If they normally charge $100, the network or negotiated rate might be $65.

If you have a plan that has a $35 co-pay for office visits, and the PPO discounted rate is $65 (remember, this is just an example), you are saving $30 on each visit. If you go to the doctor three times in a year (most of you do not even go that much), you have saved $90 by having the doctor co-pay feature in your plan.

But, how much more did you pay to have the co-pay feature? It might have meant buying a plan that was $1,000 a year more in premiums. Does that make sense?

Some plans have a prescription co-pay where you only pay $15 for a generic prescription. Again, what is the big deal? Some generics are less than ten dollars. The expensive brand name prescriptions carry a deductible and still cost you $35 - $60 with a co-pay.

What this all means is that there is no such thing as a free ride. One way or the other you pay. When you buy more expensive health insurance plans, you pay whether you are well or sick in the form of higher monthly premiums.

I like high deductible plans. If you are worried about the deductible, you can purchase a secondary plan that takes care of it. The total will be far less than a low deductible plan.

Would it be cheaper to get an Alabama group health insurance plan?

Group health insurance is the most expensive form of health insurance. The reason is, they cannot decline anyone due to medical problems.

That said, we can lower your group rates the same way we bring down individual rates. We use higher deductibles and supplements to pay off the deductible. It dramatically lowers Alabama group health insurance rates.

A group is made up of full-time employees whose taxes are withheld and issued a W2.

Next Steps

If you have gotten this far then you are serious about getting the best deal on Alabama health insurance. Give me a call and I will give you some fast quotes. It doesn't take much time. I can also answer any questions you have.

Thank you,
Martin Unger

Call 800-272-0512   Mon – Thursday 9 AM to 8 PM and Friday until 5 PM

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Martin Unger - President
1-800-272-0512

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