January 2008
Be wary of "affordable" plans
Illustration by Jing and Mike Co.
Someone who can't obtain comprehensive individual health insurance might be tempted to purchase one of the many lower-cost
"affordable" plans, frequently marketed through associations.
But experts say stay away because the premiums aren't worth their limited coverage. For instance, a plan called AWA Gold, sold online through the American Workers Association, includes just three office visits per year. It covers a maximum of 30 hospital days per year, at $750 per day, a fraction of what a hospital stay really costs.
Susan Kelly, a 47-year-old Houston real-estate agent, said she had an individual "catastrophic hospital expense plan" through the National Association for the Self-Employed for about $650 a month. In 2004 she got a diagnosis of breast cancer. "The insurance covered my surgery and the three days I was in the hospital, and that was it," she says. It didn't cover tests, biopsy, or chemotherapy. She is paying off a $100,000 debt.
Here's what to check in a plan:
But experts say stay away because the premiums aren't worth their limited coverage. For instance, a plan called AWA Gold, sold online through the American Workers Association, includes just three office visits per year. It covers a maximum of 30 hospital days per year, at $750 per day, a fraction of what a hospital stay really costs.
Susan Kelly, a 47-year-old Houston real-estate agent, said she had an individual "catastrophic hospital expense plan" through the National Association for the Self-Employed for about $650 a month. In 2004 she got a diagnosis of breast cancer. "The insurance covered my surgery and the three days I was in the hospital, and that was it," she says. It didn't cover tests, biopsy, or chemotherapy. She is paying off a $100,000 debt.
Here's what to check in a plan:
- Make sure it mentions all types of coverage, including hospitalization, in-patient and outpatient surgery, office visits,
mental health care, physical therapy, and prescription drugs.
- Avoid plans that set fixed dollar or number limits on visits, such as four visits per year or $500 per hospital day.
- Look for disclaimers such as "This is not major medical coverage." Avoid a plan that calls itself "limited benefit" insurance.
