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Health Insurance Misconceptions

As an insurance broker, I get to speak to a lot of people about health insurance on a daily basis and often find there are misconceptions about the health insurance industry. People’s satisfaction with thier health insurance coverage also varies, depending on the type of coverage they have and the amount they pay for it. If you are young and healthy and have the opportunity to purchase a health insurance plan with a lower deductible and a higher level of coverage at a “reasonable” rate, which in many cases can be under $100 per month; many clients are generally happy with their coverage and the security it provides. However, if you are “older”, meaning 40 years of age or more, are married and have children; rates for the same type of coverage as the young client can reach near $1,000 per month. These families struggle to maintain their coverage and and may be faced with tough choices in the event they have to deal with injuries or illnesses.

In order to maintain health insurance coverage many families must decide how much insurance they can afford and are looking for options. These options include looking at company sponsored group health insurance if it is available, individual insurance policies if they qualify, or State and Federal (Medicaid) plans if their health or financial status limit their options. In my experience, health insurance has changed for many of the same reasons the job market has. In the past, it was common to establish a career with an employer (and health insurance) and stay with that employer for 20 years or more until retirement. It was very common for employment packages to include health insurance, life insurance and a 401k. That scenario is becoming a thing of the past. It is much more common for people to change jobs more frequently and for employers to limit benefits, or not to include them at all.

This paradigm shift requires a change in the way people think about employment and health insurance with it. It is more reasonable to find a job that “fits” a persons skills and lifestyle and to maintain that position as long as the employee and employer are willing to work together. However, economic changes, industry changes (e.g. High Tech and the Auto Industry), and life changes often require people to look for other employment. These changes dicate that a person may have to find new employment and new health insurance coverage as times change.

Since health insurance has often been tied to employment, many people assume that this is thier best, or only option. That may be the case, but they should also consider all options before they make a final decision. The “right” solution is to make sure a person or family has the appropriate level of coverage for a given rate. For a young, healthy person, this may mean a plan with a higher deductible, if they use very few benefits under thier plan and are generally healthy. Conversely, families with young children that may need more coverage, or people with health needs that require medical attention or prescription drug coverage, may need a more comprehensive policy. This is where an Insurance Broker can help by assisting people to look at their alternatives and point out strenths and weaknesses in the options. Group health insurance may be the best option, but may not be available to everyone, or may be subsidized at varying levels. It is worth comparing coverage options for group and individual coverage for individuals, as well as for family members.

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