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Discount Plans in the California Health Insurance Market

By Health Care Info | February 27, 2010



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In the last 10 years in California health insurance costs have increased significantly, there has been a explosion in both the availability and marketing of so-called discount health plans were, as we term in the industry. It is important to understand how they work and what is more important, as they do not work. First, a brief refresher of the whole point of health insurance protection is at the top. Health insurance comes full circle back to its original design and intent. Originally, the health insurance structured to actually protect from the really big appearances. Normally, you had to choose between high deductible plan and a very simple design. As the market matured, started copays, coinsurance and other bells and whistles seem to be. This trend began in the group health insurance market. Group health plans became a tool for recruitment and retention of valuable employees. These advantages “arms race” came with a price tag. In the early 90s, medical claims and the resulting increase in premiums exploded on the scene. In response to this draft plan drew its original form with higher deductibles. The emergence of discount health plans About this time began advertising for monthly plans, which were significantly lower appearance – even $ 10. What were these plans and more importantly, how were the firms able to offer it for such a low monthly premium. These were the “discount plans”. In essence, a discount plan, members can take advantage of negotiated rates to take on a network. This is the same discount, PPO paid members when they use a PPO provider. The discount plans can reduce the cost of medical care provided by a certain percentage (usually 30-60%), but they lack an essential feature of a comprehensive California health insurance. . . the most out of your own pocket. These max out of his pocket the real reason for health insurance or any insurance for that matter is who. The whole part of the policy is for your risk in a given situation of catastrophic health issues, cap. The problem with discount plans is that they are usually not a ceiling on the back end. This means that have a $ 100,000 health claim, it discounted by 40%, but you are still responsible for 60,000 U.S. dollars. The underlying health insurance costs skyrocketed, and it is possible to have claims of 100’s of thousands of dollars. . . especially for infrastructure competition care (hospital, Revue, etc.). A good way to tell if a prospective plan is a “discount plan” is the price. If it seems too good to be true, it probably is. The other major deciding factor is if they advertise so that they are now, which did not go because of his health. For individuals and families health insurance in California, people are required to by medical underwriting, which means that they are based on health needs to qualify. This does not apply to group health insurance plans that are guaranteed issue. If the ad says that you are not decreased, that a clear signal that it is an issue. In health insurance, there are the so-called “adverse selection”. This means that a plan that is a higher risk members will be finally won under the weight of their debts Questions collapse. The only way to plan a discount to avoid this “adverse selection”, it is not really paying claims. They offer discounts. . . to explain any payments. Alternatives to the discount plans It is important to make sure that you cover the big bills. To keep costs low, we recommend quoting the lowest cost, comprehensive plans on the market. This is normally under the HSA (Health Savings Accounts) or high deductible plans. The beauty of the HSA plans is that they are comprehensive. . . they do not carve out, as some services do the hospital plans on the markets. You can create your own individual run / Family Health Plan current offers on HSA and other health plans.

Dennis Jarvis is a licensed California broker with extensive knowledge of the Individual and Small Group health market in California. California health insurance

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