Can You Help Sorting Out Health Insurance?

[shaddoc98]

I'm looking for a policy that has low monthly payments, but that will be accepted by hospitals. I'm self-employed and I know there are group policies for me through Mega Life & Health and Alliegence Health. But, if I understand it correctly, these group's are funded by the members of the group.... and, if the group is small, or has a lot of claims, then the monthly payments are high, regardless of the fact it's a 'group'. Maybe all insurance companies are like this and I just misunderstand insurance. I'm thinking an insurance company is a corporation with a lot of money, that takes a chance that they will make more money in payments from their insured, than they will pay out in claims. But I've also seen that some 'insurance companies' are actually simply insurance administrators and claim processors hired by large companies, like IBM, to administrate and handle employee's claims... but IBM actually pays the claims. Does this make sense? Can you understand my confusion?

[Eron]

You are correct about large companies paying their own claims.  They are in essence self insured.  My place of employment has this as well.  They basically started their own "insurance company" that functions as a seperate entity.   Now as far as groups go your understanding is also correct.  They generally tend to have better rates and these rates can be affected by the group; however, many groups however are very large and thus the fluctuations are more to do with the cost of healthcare than actual members claims increasing(although that could do it too).   Your statement: "I'm thinking an insurance company is a corporation with a lot of money, that takes a chance that they will make more money in payments from their insured, than they will pay out in claims." is correct in a general sense.  That is exactly what they are but there are a ton of federal and state regulations governing just who can and can't be an insurer and the rules for the way they operate are tightly governed.   The best advice I can give is to look around at many companies.  When I was self employed and had to buy my own insurance it was tough to find a good deal.  You can buy insurance individually but I would say you'd be better off finding a large group you can join up with for a better rate.  I think I got in under an alumni group but there are tons of others that are formed for basically no other purpose than to get better rates.  If you talk to some insurance brokers(who represent several companies) they can usually set you up with such groups.  That is who helped me.    Another option you may want to consider is a high deductible plan(HDP) combined with a health savings account(HSA).  The government is really pushing this option to get more people insured.  I just picked up one of these myself because it is so much more affordable.  The deductible is very high but the max out of pocket is doable.  You can read about HDP's and HSA's here: http://www.kiplinger.com/features/archives/2004/02/hsa.html   Good luck with picking a plan.  I hope this helps!  

[Dhanvant]

2blessingsfromheaven said: 1 My husband is a Certified Financial Planner who also sets up health insurance plans for his clients. We are on an HSA plan and have been absolutely thrilled with the savings when compared to health insurance premiums(he is self employed). We could not be more pleased! 81 months ago

[Bow]

My husband is a Certified Financial Planner who also sets up health insurance plans for his clients. We are on an HSA plan and have been absolutely thrilled with the savings when compared to health insurance premiums(he is self employed). We could not be more pleased!