Buying Tips:

Health and Dental Insurance

Look at the total costs of coverage, which will include: Monthly premium x 12 (Annual costs) Coinsurance or co-pay out of pocket maximum Annual deductible costs (per person, per family) Review the value of any prescription program. Compare the costs above, versus other options, such as:

A large deductible program, which may make sense if the premium reduction is such that you can save to fund the large deductible with a Health Savings Account. Health Savings Account (HSA’s) – An account that you put money into to save for future medical expenses. You can only contribute to this account if you have a qualified, high deductible health insurance policy. It is many times called “an IRA for health care, due to its tax deductibility and income deferral abilities. For more information on HSA’s, the Treasury Departments website @ www.ustreas.gov, go to “key topics” Health Savings Accounts.

Blue Cross – Michigan is one of the most popular states in the U.S. in using the Blue Cross system. It is not always the best program for you, however. The large penetration of Blue Cross in MI has to do with the large union labor force. Realize that there are many other good health care providers in MI to choose from. Blue Cross is a non-profit and must take all who apply. For that reason, their healthy person rates have to subsidize the less healthy client premiums. If you are healthy, there may be better alternatives for you.

Dental Insurance – If you are part of a small group, this coverage may make sense for you. If you are buying coverage for yourself, it is probably not the best deal. Costs for individuals are between $50 – $90 per month and usually limit benefits to $1,000 per year. You are just trading dollars. One advantage of Health Savings Accounts is the fact that HSA dollars can be used to pay for dental expenses.

Group Benefits vs. Individual Insurance – Small Groups of 10 or less don’t get much of a rate discount, vs. individuals, since they are basically individually underwritten. Groups of 100 or more get underwritten on a true basis, not by the individuals within the group. The advantage that even small groups get, however, is that they have more options available to them, which can reduce costs. Employers usually pay anywhere from 50 – 100% of their employees’ actual premiums in a Group Program, so that can be a big benefit to the employee. An individual loses this cost benefit, as well as some plan options. This cost problem is especially glaring with dental insurance (see above). For this reason, it is important to review program design options when getting individual coverage.