to health insurance in Arizona
complaint among consumers is this: “I’ve paid
for Arizona health insurance every month for
years, and the deductible is so high that I’ve
never ever gotten any use out of it. I’m
perfectly healthy and never go to the doctor.
Why should I pay for something I’m never going
Ah, but What
If? What if you’re in a car wreck and in the
hospital for weeks or even months? What if
you’re diagnosed with cancer and have to start
chemotherapy and radiation treatment within days
of your diagnosis? What if you have a heart
attack, or need by-pass surgery?
things do happen to good people. And if you
don’t have insurance, you better have plenty of
money—and we’re talking about six figures and
up—to pay your bills. Otherwise, be prepared to
lose your savings, your house and just about
anything else of value that will go toward
paying off your medical bills.
health insurance is a necessity to take care of
those “What if”s.” In the long run, it is less
expensive than dealing with a catastrophic
medical event (not to mention the fact that you
may be very limited in your hospital and doctor
selection without insurance). You may never need
it, but if you do, you’ll be thankful that it is
advances are being made all the time in medical
research and treatment. Patients and doctors
are requesting more tests, new procedures, even
second opinions. All this comes at an increase
in cost of treatment, and those costs are being
passed along eventually to the consumer. If you
don’t have health insurance, you’ll be facing
those increases by yourself.
make your decision on which plan or Arizona
health insurance carrier you’re going to go
with, a decision that can have significant
consequences if you ever have a major medical
event , you need to know one or two things about
quick primer on the subject, and we’ll be glad
to answer any questions you may have afterwards.
insurance works basically like any other form of
insurance: a large number of people (the
insured) pay into a pot, and the carrier uses
this money in the pot to pay out hopefully a
much smaller amount of money in claims.
theoretically kept under control because the
carriers have the plans set up so a portion of
the up front costs are covered by the insured,
who typically play a portion of a medical bill
before the carrier pays anything.
called the deductible, and it is a main cost
(other than the monthly premiums) that the
insured has to deal with. The amount of the
deductible can vary widely, from a few hundred
dollars up to $10,000. The higher the
deductible, the lower the monthly premium. When
shopping for a health insurance plan, you want
to try to match the deductible you could afford
with the lowest possible premium you feel
comfortable with each month.
that you choose the highest deductible you could
afford to meet if you had to do it tomorrow, and
match that with the lowest monthly premium
payment that you can afford. Remember that the
higher the deductible, the lower the monthly
is not the only cost. Some people believe that
once they’ve paid the deductible, they’re home
free. That’s not true for most plans. Something
called the co-pay raises its ugly little head.
This is a percentage that you must pay on the
remainder of the bill, until you reach a preset
maximum amount (the out-of-pocket maximum).
After which, the insurance pays 100 percent. You
will always pay the smaller amount of the
co-pay, while the insurance company pays the
larger amount (so if 80/20 is the co-pay, it
means that you will 20 percent of the remainder
of the bill until you reach the maximum, and the
insurance will pay 80 percent).
Also keep in
mind that the insurance doesn’t pay everything.
Some medical procedures fall under the umbrella
of “exclusions and limitations” and won’t be
covered. Cosmetic surgery would be an example,
or aromatherapy. These typically are not
considered medical necessities by the insurance
important to be familiar with the different
types of insurance. There are basically three
types of family/individual plans.
Maintenance Organization (HMO)—This type of plan
was popular in the 1980s when it was seen as a
way to contain health costs. If you are a member
of a HMO you have to go through a general
practitioner before you see a specialist. The
thinking was that if the GP can fix you, the
carrier won’t have to spend for the higher cost
of a specialist. If the GP feels you need
greater expertise relating to a condition than
he can provide, then he refers you to a
reason, HMOs have basically dropped off the map,
at least in Arizona, and tend to be surprisingly
expensive. Most consumers would rather have more
choice in choosing their medical providers,
whether it be doctor or hospital, than is
permitted through an HMO.
Provider Organization (PPO) This is the standard
plan for individual and family coverage. The
“organization” refers to the network of doctors
and hospitals that the carrier has contracted
with. In exchange for bringing a lot of bodies
through the provider’s door (you, the patient),
the insurance company is able to negotiate
lower, more attractive rates. There are always a
lot more doctors and hospitals to choose from
in a PPO compared to the HMO. Deductibles can
range from a very low amount of a couple of
hundred dollars, all the way up to $10K. There
is also variance in the co-pay, from 20%, to 30%
and even 40%, depending on the plan (A higher
co-pay will help push down the monthly premiums,
since the carrier knows you are going to have to
pay more of the bill with a higher co-pay). If
you go to a doctor outside the network, however,
you will pay more, because the “best rates” have
not been negotiated.
Savings Account. This is a insurance plan
attached to a savings account. You can put money
into the account every calendar year (a maximum
amount of $3100 for an individual, and $6250
for a family, for calendar year 2012) and while
that money is in the account, it is tax
deferred, tax deductible and generates interest.
You can also use it to pay medical, dental and
vision costs (but not the monthly premiums) and
it will not count toward taxable income. Usually
the insurance company has a bank you can use to
set up an HSA, but most banks now offer this
service, so check with your bank to see if it
has an HSA plan, and shop around with other
banks. There can be a significant difference in
service charges in to maintain an HAS from one
bank to another.
disadvantage in an HSA in some people’s minds is
the deductibles are relatively high and you must
meet the deductible before the plan pays much of
anything. We don’t recommend these plans for
people with young children because they lack
office visit co-pays (all those trips to the
doctors for sore throats bouts with the flu) and
don’t give much of a break on prescriptions.
plans. There is no reason to get an indemnity
plan if you qualify for a PPO or HSA. If you
don’t, you may want to consider one with the
idea that it is better than no coverage of all.
An indemnity plan pays a fixed, predetermined
amount for medical procedures and costs, i.e.,
a flat daily rate for hospitalization no matter
what the hospital charges. There is sometimes a
deductible and co-pay involved as well. Think of
them as a type of plan that will pay part, but
not all, of your medical bill.
One of the
most expensive part of medical treatment is the
cost of prescription drugs, although most
consumers don’t recognize it as such. New
medications are being introduced all the time,
and someone must cover the cost of research and
marketing (pharmaceutical companies pay big
bucks now to market and advertise their
products, and these costs are passed on to the
are cost effective, but there are plenty of
medication that is branded—usually these are the
newest drugs and the ones for which the
pharmaceutical companies have some kind of
patent protection for. These tend to be much
more expensive than generic. (If you’re the only
game in town, you can charge whatever the market
with richer benefits have a tiered system where
drugs are categorized according to a fixed cost.
This cost is the co-pay. Typically it can run
$15 (for generic), $40, or $60 per prescription,
depending on where the prescription falls in the
tier, although there is variations according to
leaner benefits may offer a $15 generic and an
“up to” set price for everything else. The least
expensive plans have only a discount card which
gives you some advantage compared to the Joe
Shmoe who walks in off the street.
that the carriers in Arizona are not making very
visible at this time, but which is fairly
common, is a separate deductible for
prescription drugs (excluding generic). This can
range from $200 to $1000 depending on the
carrier or the plan. We’ll be glad to help you
determine the amount if you have any questions.
on the highlights, we hope you have enough
information to begin looking for the right plan
for you. However, we expect other questions to
come up, so don’t hesitate to get back to us.
Our goal is to help you find the right plan at
the right price.