30 Second Insurance Tips©

Tip 178- Limited Benefit Health Plans

At 62, Linda is retiring early from one of our group clients. Forgetting that her employer had been paying 80%, the COBRA health insurance premium of $1,412/month (including her husband) came as a shock.

That’s when Linda came to one of our new ‘stores’ to shop for a better deal. Indeed, we found comparable coverage for $1,247/month. If she was willing to accept a higher deductible, the premiums decreased further.

That’s when she proudly produced a proposal for a policy that would cover both her and her husband for just $379 per month.

Now I was shocked.

So, I helped Linda dissect what proved to be a “Limited Benefit Health Plan;” one that paid $1,000/day for hospitalizations, $500/day for surgery, $100/day for anesthesia; there was a long and “comprehensive” payment schedule for dozens of specified procedures.

But right there in bold letters on page one of the “OUTLINE OF COVERAGE” was this: “BENEFITS PROVIDED ARE SUPPLEMENTAL AND ARE NOT INTENDED TO COVER ALL MEDICAL EXPENSES.”

I think that disclaimer probably says it all.