Tips That May Help Cut Your Premium Rate On An Individual Health Plan
Before any insurance company will issue an individual health insurance policy, they will undoubtedly want to assess the client’s health history. To reduce premiums, it is very important to understand the insurance company’s processes and procedures. What you say and how you say it can make a big difference in their perception of the risk you represent to their company.
When applying for an individual health insurance policy, the insurance company will want to know more about you (and your family if applying for a family plan). Depending on the type of policy you choose, they may inquire about your habits, request copies of your medical records, and research you and your family’s medical history. Based on your answers, the insurance company will place you into one of several underwriting categories to determine your insurability and to set the amount you will pay for coverage.
Here are some tips you can use that may help qualify you for a better health ranking and the best rate available:
Not every agent is up to the task of helping you find the best plan at the best rate – especially if you have had serious health conditions in the past. If you are dealing with an agent who handles difficult-to-insure clients often, he/she can help coordinate and guide you through the insurance underwriting process.
If you anticipate problems in submitting your application, it is particularly important to have someone who knows the system. This person can be an agent who is aware of which companies are likely to give people with specific health conditions the best rating or someone who understands how to communicate your true risk, or lack of risk, to the underwriters. Therefore, if you are in poor health, choosing a knowledgeable professional is imperative.
Do you think leaving an unfavorable detail out of your health history on your application will help? No. First, the insurance company will likely uncover the truth because they read your medical records and may assume the problem is severe because you failed to mention it. Secondly, if you withhold information the company regards as “material” in nature, it could affect your ability to get doctor, hospital, or other medical charges paid in the event of a health claim.
Be sure to give a comprehensive picture of your health history, but do it on your own terms. For example, do not just say that you have high blood pressure! Say you were diagnosed with high blood pressure (however many years ago) and have successfully controlled it with medication (if it is in fact controlled). Be sure to state your pre-controlled blood pressure numbers, your current blood pressure medication (with dosage), and the new, controlled blood pressure levels.
Think about it from the point of view of the insurance company who is not familiar with you or your medical history. If you can provide them with complete and thorough information to reduce uncertainty, then you are ultimately more likely to be considered for a fair rate.
Insurance companies may want to speak with your doctor’s office and possibly look at your medical records. They may also evaluate your health records from the Medical Information Bureau (MIB). The MIB is a database of medical records used only by insurance companies. This cold, black and white data provided by the MIB may not always work to your advantage. Your doctor can sometimes give a better perspective to a condition successfully being treated.
Unfortunately, a busy doctor’s office may sometimes fall behind in their processing of medical record requests. The insurance company will only try to contact your doctor so many times before they give up. Therefore, let your doctor know that you are applying for a new individual health insurance policy. A little advance notification may help ensure the request is not overlooked and give you the best chance at a fair rating.
If you would like to receive a copy of your MIB records, submit your request to:
Medical Information Bureau, Inc.
PO Box 105
Essex Station, Boston, MA 02112
Additionally, you can learn more about your rights regarding the disclosure of your medical information under the Fair Credit Reporting Act (FCRA) at www.ftc.gov/credit.
It is a good idea to review your medical records prior to applying for individual health insurance to ensure the information is accurate and complete. Perhaps your records contain a recommendation for a test that you never completed. The insurance company may consider that an undiagnosed condition. If the test is necessary, get it done. Otherwise, you can ask your doctor to note in your medical records the reason why the test was never taken.
To get the most complete, up-to-date picture of your health, the insurance company needs all of your medical records. If you have moved or changed doctors recently, be certain to include the necessary contact information on where to obtain your records. Also, be aware that some doctors may charge a small fee for copying your file and sending it to you.
In some cases, the insurance company will require either a physical or a short ParaMed exam to be performed by a paraprofessional. This may include recording your blood pressure, taking your pulse, and measuring your height and weight. A urine sample and blood test may also be required.
Check with your physician for advice on how to get the most accurate readings on your ParaMed exam. He/she may suggest scheduling the test early in the morning or on an empty stomach. Your physician may also recommend that you refrain from vigorous exercise 24 hours prior to your test. Getting a good night’s sleep can also help, and some experts recommend forgoing coffee in the morning or even not drinking water. Check with your doctor to see what may be best for you.
Be clear and complete in all of your answers. Insurance underwriters are sometimes accused of assuming the worst, and an incomplete answer may paint a bad picture. For example, if you had a benign cancer removed in the past, do not just say, “I had cancer removed”. List the specific type of cancer (basal cell, for example), the procedure preformed, and whether it reoccurred.
Ask your health insurance professional to explain what information the insurance company will use to determine their health rankings. You will want to select a plan that uses objective criteria. Something the insurance company does not know or did not ask may improve your ranking and decrease your premium rate.
The insurance company probably will not ask how many times a week you exercise, how many grams of fat you consume, or how many glasses of water you drink. But all of these factors impact the criteria they will examine. So hit the gym, lose those extra pounds, and keep yourself healthy. These things can make a substantial difference, not just in getting coverage, but in the premium price you will pay.
Want to drop your health insurance premium rates? Kick the cigarettes. Smoking alone may add a considerable amount to the cost.
It may sound like common sense, but it is even more important with individual health insurance. Two different insurance companies can view the same person’s health and the risk he/she poses very differently. Most carriers try to place you into the correct underwriting category. However, if they make a mistake, you do not want that carrier to be your only choice. Even the language varies from company to company. A ranking of “preferred” or “standard” might mean very different things and carry different rates at different health insurance companies.
Smart shopping is very important for smokers, especially those who only occasionally smoke a cigar or pipe. Some companies will automatically put you in a less-desirable category with a higher premium cost while other companies may not penalize you for that once-a-year stogie.
In the same sense that a lot of inquiries into your credit report may be harmful, a lot of inquiries into your insurability may throw up a red flag as well. Choose an agent who can quietly do some informal shopping or prescreening to narrow your options before you make an official decision. This way you can avoid getting declined or hit with higher rates as a result of submitting multiple health insurance applications.
Work with a professional you trust. Have him/her preview the kind of ratings you may receive. Keep in mind that a number of conditions are not the “black marks” they used to be. For example, using medication to control high blood pressure or high cholesterol may not automatically impair your rating. If you have a moderate condition today, it could become worse in the future. If you delayed getting health insurance coverage, this postponement may result in higher premiums, or cause you to become uninsurable.
While many advertisements for health insurance emphasize the premium “savings” that can be gained by reducing health plan benefits (like raising co-payments or increasing deductibles), this claim is misleading. What you are really doing is shifting the risk from the insurance company onto yourself. That option may be a good strategy if you rarely use your benefits, but that circumstance is not something to bet on. Nevertheless, if the financial cost of a plan is the ultimate deciding factor, it is better to have coverage (with reduced benefits and lower premiums) than to not have coverage at all. Here are two reasons why.
First, if you get sick and use healthcare products and services, the charges will be billed to your insurance company. The insurance company will reduce these “billed charges” down to a lower sum called their “allowed amount”. This amount will then be applied to your deductible and eventually billed to you. Due to these reduced charges, the savings could be up to 60%-80% off the original billed amount.
Second, if you were to be diagnosed with a critical illness (and incurred $100,000.00 in expenses), you would have the necessary life-saving services performed regardless of your health insurance plan. In the end, if you have a balance to be paid (say your $5,000.00 insurance policy deductible), you can most likely negotiate with the healthcare providers to pay the sum off over a reasonable period of time. Then, not only will you have you averted a large and unaffordable expense, you may also be able to pay your balance on a schedule that works within your budget.
In the end, it may be necessary for you to accept a health insurance policy that has exclusionary riders included within the benefits, has a higher premium cost, or both. Although not perfect, you will still benefit from the security that a quality plan offers.