Mix-and-match healthcare coverage
When Scott Fowler quit his job at Wal-Mart to make a living as a painting contractor, he left his medical insurance behind. He and his wife went without health coverage for years because the West Covina resident believed he couldn’t afford premiums of $600 to $700 a month.
But in recent years the health insurance industry, once seemingly indifferent to individual customers, has increasingly catered to them, said Gary Lauer, chief executive of EHealth Inc. in Mountain View, Calif., which operates an online insurance agency.
Dozens of new kinds of products -- including high-deductible coverage, policies with linked savings accounts and policies that limit coverage for prescription drugs or maternity care -- have been introduced, said David Olsen, senior vice president of HealthNet Inc., an insurer based in Woodland Hills.
That has resulted in a vibrant market with a greater number of affordable options, experts said.
“We have found that people have been surprised at how affordable health insurance can be,” Lauer said.
That proved to be a lifesaver for Fowler, who again went shopping for health coverage after his dad died of heart failure three years ago. This time, he was able to secure a good policy for about half the price of the quotes he had received years earlier.
A few months after the policy began, Fowler was diagnosed with the same heart problem that killed his father. He spent eight days in the hospital to fix the condition. Had he not been insured, Fowler says, he wouldn’t have received the life-saving diagnosis because he never would have gone to the doctor in the first place.
“It was a real blessing,” said Fowler, 38. “When I wasn’t feeling well, I realized I had insurance, so I could go to the doctor. I can’t even imagine how much that insurance policy saved me.”
Although health insurance is potentially more affordable than before, it’s also more complicated. Here’s a guide to shopping.
A reality check
Low-deductible, high-coverage plans are still costly. For a family with a risky medical history, the cost of these policies is stratospheric. Experts maintain that families would be wise to consider what insurance is supposed to do: provide protection from catastrophic losses that would devastate your family.
Those who are willing to shoulder some of the costs, such as bigger co-payments or higher deductibles, are likely to get far more reasonable premiums.
Assess your needs
The first step in finding a policy that suits your family is to sit down with a few years’ worth of medical bills to determine how your family uses healthcare.
Make a grid where you can record the number of doctor and hospital visits for each family member, as well as the number of prescriptions. Divvy up the chart by family member. (You’ll see why later.)
Now think about what is most important to you and the areas where you’d be willing to compromise. Are you tied to your existing physicians or willing to switch to an unfamiliar doctor or hospital network? How much of a deductible can you afford in a given year? Do you need dental coverage or are you willing to shoulder those costs on your own? What about prescriptions? If you’re older or single, are you willing to buy a policy that excludes maternity care?
Is anything changing in your lifestyle that could require additional medical attention? For instance, does a member of your family need braces or costly dental care? Or are you considering starting a family?
The easiest way to get a read on prices is go online. Two good places to shop for coverage are websites operated by Vimo Inc. (www.vimo.com) and EHealth (www.ehealthinsurance.com). I tested both, using information about my family. Each site provided dozens of quotes minutes after I filled out a brief application. The policies offered by the two sites were similar.
But to get price quotes from Vimo, you must supply your name and contact information, which Vimo gives to half a dozen insurance agents. EHealth, on the other hand, will provide quotes without unleashing salespeople on you.
Indeed, after I went online, five agents affiliated with Vimo called me. Although that may not sound attractive, two of the agents actually made good suggestions.
For instance, one agent raised the possibility of getting a policy through a small-business group plan that he sold, which would eliminate the need for a physical exam. (If you aren’t in good health, that’s a good option that didn’t show up on the websites.)
Another agent talked me through my family’s insurance needs and suggested that my children and I be covered under separate policies. That would allow me to get a cut-rate plan while the kids would get more comprehensive coverage with lower deductibles.
Try splitting up
Monica Alejandre has been buying insurance for her family since her husband launched his own business 10 years ago. Over the years, she’s become a seasoned shopper who checks rates and coverage each year and often switches policies for a better deal.
This year her family of four has three separate polices. One policy covers Alejandre and her husband, Jorge. Another covers her 16-year-old daughter, Airelle. A health plan for college students covers her son, Ivan.
“I save money having us on different policies,” she explained.
The premiums are more affordable because the coverage is customized for each family member.
Alejandre and her husband have a high-deductible plan with a 30% co-payment because they rarely go to the doctor. Because Airelle needs regular checkups and plays sports, raising her risk of being injured, she is in a health maintenance organization that has no deductible and low co-payments. Ivan, meanwhile, has signed up for a health plan offered by UC Riverside that costs a few hundred dollars a year and provides care on campus.
The total cost for the family’s coverage: $494 a month.
Experts call Alejandre’s approach a smart one, particularly when family members have different health needs.
“It could be that you or your husband has a health condition that would push your price up,” Lauer said. “You could buy catastrophic coverage and put everyone else on a different policy at a lower rate.”
Consider safety nets
Another reason to consider splitting up coverage for adults and children: Most states, including California, have low-cost health insurance plans for children of lower- and moderate-income families.
Such plans provide an option for those who earn too much to qualify for free healthcare for the poor but not enough to comfortably afford insurance in the private market, said Ron Springarn, deputy director of legislation and external affairs at the California Managed Risk Medical Insurance Board, which administers the state’s Healthy Families insurance program for children.
When Fowler left Wal-Mart, for instance, he used Healthy Families to cover his children, ages 11, 8 and 7. The premiums are modest -- $4 to $15 a month for each covered child. The cost depends on the family’s income and on the choice of plan. No family pays more than $45 a month.
To qualify for Healthy Families you have to submit an income statement each year. Generally, you can’t make more than triple the poverty line set by the federal government for your family’s size, Springarn said. For example, a family of four would qualify with an annual income of as much as $51,625. (Other states have similar plans but may have different income limits.)
Adults who can’t get affordable heath insurance in the private market because of preexisting conditions or other issues can secure coverage through a public program for “high risk” people, which also is operated by the state’s Managed Risk Medical Insurance Board.
To determine whether you qualify for coverage under the California state programs, go to www.mrmib.ca.gov.
Kathy M. Kristof welcomes your comments but regrets that she cannot respond to every question. Write to Personal Finance, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012, or e-mail email@example.com.