Cheap Health Insurance?

 Is buying cheap health insurance worth the cost just because it’s cheap?  There are several health insurance options available in the marketplace.  There are alot of added confusion with the onset of the Health Care reform.

Let me explain….  I get calls daily from customers looking for health insurance. 

It’s completely understandable that cost is a factor in purchasing health insurance.  When I am looking at purchasing anything I do alot of research before I purchase that item. 

It’s through those eyes that I assist my customers in finding the balance between their insurance and financial needs.

What is may cost you:

Cheap insurance may end up costing you alot more in the end than just premium.  When purchasing health insurance it’s important to look at several factors such as;

  • Deductible
  • Out of pocket maximums
  • Monthly premiums
  • Your own medical history and claims utlization

The health insurance deductible for example directly affects the cost of the monthly premium on health insurance.  The lower the deductible the higher the monthly premium and vice versa.

Lets take the below example:

Jo Smith has a PPO plan with a $1,000 deductible and 80/20% co-insurance with an out-of-pocket maximum of $3,000.  The actual out-of-pocket she will be out-of-pocket is $4,ooo which is the deductible plus the co-insurance out-of-maximum.  On this plan her premium is $450/monthly which is $5,400 annually. 

Jo is a pretty unlucky lady and ends up in the hospital twice in the year.  In the first visit she met her out-of-pocket of $4,000 so the second time she ended up in the hospital it was covered at 100%.  In this example, her true expenses for annually premium and out-of-pocket maximum totals $9,400.

Jo decided she would like to lower her monthly premium and the way to do this is by increasing the deductible.  She decided to increase her deductible to $5,000 with an 80/20% co-insurance and out pocket maximum of $4,000. 

Her monthly premium drops to $260 equalling $3,120 annually.  Based on the above scenario of her claims, she would be out-of-pocket $9,000 for deductible and co-insurance and $3,120 for the premium thereby making her true out-of-pocket  $12,120

Although her monthly premium was lower on the second example, her out-of-pocket is an additional $2,720 by switching to a lower monthly premium plan.

Cheap isn’t always the better way to go.  The old adage “You get what you pay for” is as true today as back then. 

However, on the flip side… if Jo was a healthy person and didn’t go the hospital and only utilized office visits/prescriptions, then she actually would be ahead via paying less in premium by $2,280 annually ($5400-3120). 

I will definitely say, if I had a choice between a cheap monthly premium or having no insurance at all, I would go with a cheaper monthly premium every time.  Something is way better than nothing it all depends on what you prefer and can pay out of pocket.

Keep in mind that copays do not accumlate towards your deductible or out of pocket maximum and will always have those even after paying deductible and coinsurance maximums. 

Have a question or comment?  Please let us now.  Thanks for reading.


What is a Health Insurance PPO Plan?  A health insurance PPO plan is a type of health insurance plan where you have access to both in – network doctors and out-of-network doctors.  A PPO plan provides more flexibility to see whomever you want.  You can even see a specialist on health insurance plan, without a referral most times.

 Health Insurance – PPO stands for Preferred Provider Organizations

 Basically, an insurance company contracts with doctors and selected hospitals to provide services at discounted rates.  As I mentioned earlier a PPO plan has both in and out of networks level benefits.

In network refers to the list of doctors that the insurance carriers have contracted with to provide you with discounted rates.  An added benefit of using in-network doctors is because based on this contract they should not balance bill for services.

Unlike a HMO health insurance plan, a PPO plan has the added benefit of out-of-network services. 

Cautionary note:  Although you have the option to go out of network and still have some benefits, they are reduced.  Additionally, any doctor/hospital etc you seek services for outside the carriers contract list of doctors, you will typically have a higher deductible and the co-insurance limits are generally twice the amount as in network doctors.

With this in mind, majority of PPO health insurance carriers have national networks.  This is a huge benefit for someone who travels from state to state.  If your health insurance plan has a national network, than seeking services while traveling is like being in your home state.

Please keep in mind.. with flexibility comes more responsibility on your part to ensure that you are utilizing in network doctors to keep your out of pockets as low as possible.  This should be easier with a PPO plan since the network of doctors on PPO plans have several thousands to select from depending on your location.

Health Insurance quotes from insurance agents.


Do you know if the place where you are getting your insurance quotes from is local?

When finding health insurance there are many places on the internet that claim they are local or only use local agents.  However, they are actually glorified telemarketers trying to get your information and sell it to several agents.  Thereby, confusing trying to find affordable health insurance.

Affordable health insurance rates for individual and family health insurance plans are set.  It really matters not if you go through the insurance carrier or an agent.   Utilizing us has many benefits, See below for a few of the benefits:

Using us as your insurance agent has many benefits for you as the consumer:

  •  Saves you time and frustration that may come with trying finding the right health insurance for you, your family and business.
  •   Education – Educating on the various plans and how they work.  Helping you ensure you are getting a plan fits not only you insurance needs but financial needs as well.
  •   On going support – We work for you and help with not only finding the best insurance plans for you.  In addition, we also help with ongoing issues that may arise. Such as, billing or claims issues.
  • Calling insurance carrier direct – Sure you can call the insurance carrier.  When you call the insurance carriers directly, the person on the other end is looking out the carrier and their bottom line. Whereas, we are looking out for you. We are your health insurance advocates.

Does your health insurance agent have experience?

We are local Arizona insurance agents with nearly 20 years of insurance experience. Helping thousands to find affordable health insurance.  Call us today for personalize service! We are here to make sense of insurance.

What is an HMO Health Insurance plan?

HMO stands for Health Maintenance Organizations

With HMO plans, you will need to select a physician in your health insurance carriers network of doctors.  This doctor is your primary care physician (PCP) and manages all of your care. If you need services out side your PCP scope and need to seek services from a specialist they should refer you within this list of doctors for your health insurance plan.

Most HMO plans have only copays for all services including hospital, out-patient surgery etc.  However, there are some HMO’s health insurance plans that have a deductible and coinsurance component attached to the insurance plan.

It’s important to note, when you are enrolled in an HMO type of health insurance plan, you must use the list of doctors for that insurance carrier.  If you decide to go out side this list you may be responsible for all claims incurred.  The one possible exception is in case of a true emergency i.e. having a heart attack, car accident, etc.

As with most plans HMO’s still have their place in the insurance market.  More times than not the HMO plans tend to be higher in cost than a PPO plan. But of course, this all depends on the health insurance carrier, health plan, etc.

With any health insurance plan type you are enrolled in or thinking of applying for, please always make sure when you schedule an appointment with the doctor’s office that they are in fact a contracted doctor for that health insurance plan.  There are several ways you can check to make sure of this, call the doctor’s office and confirm they are still contracted and the best option would be calling the insurance carrier to confirm that doctor is contracted.  This way the insurance carrier can document you called to verify should anything happen with the claim after the fact.

Even after you have seen that doctor it is possible for whatever reason that doctor is no longer contracted ie they were dropped by the insurance carrier or decided to cancel their contract with the carrier.

So make sure whenever you go they are still contracted.  I know it may seem like a pain now but a few seconds on the phone confirming is better than getting a nice big bill in the mail ;)

As mentioned in previous posts, please refer to your specific health insurance summary plan description for complete benefit details.

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What is Co-insurance on Health insurance anyways… If you are wondering what co-insurance on your health insurance plans means, allow me to briefly explain.

This is will be quick… Coinsurance is just a fancy word for sharing.  It’s the portion that you will start to share with the insurance carrier up to your out-of-pocket maximum.

I am a firm believer in show and tell ie examples.. I learn better that way ;)

Example:  PPO plans $1,000 deductible,   80/20% coinsurance, stop-loss or maximum is $3,000

Here what that means,  Once you meet your deductible of $1,000 health insurance deductible you and the insurance carrier will start to share in the expenses.  The insurance carrier will start to pay 80% of your claims and you pay 20%.  The good news… you do not keep paying 20%.  See once you have met your $3,000 the insurance carrier pays 100% for the remainder of the calendar year/policy year.

Continue reading about health insurance copays

Hold on don’t go skipping away to quickly, you will still have copays on most health insurance plans that will continue after you have met your deductible and coinsurance limit.  Depending on your health insurance plan you may still have coinsurance for mental health and miscellaneous services.  I recommend your refer to your specific health insurance plans summary plan description for full details.  The summary plan description is the line by line how your benefits are covered.

Clear as mud?  ;)  Please let us know if you have any questions/comments or something you want us to discuss.

A few things to consider when looking for a health insurance plan.  Be sure to look at the out of pocket maximum when selecting your new health insurance plan and remember that what ever this amount is you will typically still have your health insurance deductible to add.  They both start over depending if you health insurance plan is based on policy year or calendar year basis.

Have any questions regarding this or any other article?  Would you like to check out your health insurance options?  Give us a call – It’s free ;)

Health Insurance Copay vs Deductible is a topic I would like to briefly explain.

More times than not, these words are used interchangeably and they should actually be considered different. They are 2 levels, if you will, of out of pocket expenses that you pay on a plan.

If you have a  PPO plan, then chances are you have a copay for services such as Office visit and prescriptions.  The word Copay is fixed amount that you pay for these types of services.  The copay will continue even after you have met your annual deductible.  More and more these days health insurance plans come with and without the copay component attached.  If there is no copay on your plan then services are most likely applied to the deductible.  Meaning each time your see a doctor or get a prescription you will be paying towards that deductible.

The deductible is what typically you will need to pay for any services related to the hospital (in/out) or high dollar procedures (ie cat scans, MRI, etc.).  You will want to refer to your specific plan documents for additional services that your deductible may apply to.

PPO plans that do not have a copay component are typically less expensive because you are paying for the first dollar amounts until you reach your deductible.   Here’s an example I would like to explain:

Lets say Bob Smith has a PPO plan with a copay…  Every time he goes to the doctor he has a $35 office visit copay.  Now Bob only went to the doctor maybe twice per year.  His monthly premium is $350.  So annually he’s paying $4,200 for premium for health insurance.  Now lets say he elected a health care savings account, which does not have copays and the monthly premium is $245 which annually totals $2940.  So he is paying an extra $1260 in premiums but has only went to the doctor 2x which is $70. 

My question to you.. which would you prefer?

Have you ever wondered about that deductible you have on your health insurance policy?  If so, you are not alone.  This question is asked very often.  It is confusing when you hear the word deductible and my hope is that this will help clear up some of the confusion.

Most people ask what is it and how does it pertain to me?

Great question,  a deductible is a cost sharing mechanism that is part of your health insurance policy.  The deductible actually helps with several things including; controlling cost and minimizing claims utilization to name just a couple.

In nutshell… A deductible is:  The amount you pay before the insurance company begins paying benefits. After your expenses exceed the deductible amount, benefits usually are paid as a percentage of actual expenses, this depends on the plan.

Plans have varying coinsurance amounts and the most common one people are used to hearing is 80/20%.   However, health insurance carriers have done a great job with providing different levels of coinsurance amounts ranging from 100%/0 to 50/50%.  This is of course is different from state to state and insurance carrier to insurance carrier.

For simplicity I put together a brief example below of how the deductible would work for health insurance;

Ex:  John Smith has a major medical plan with a deductible of $2,500.

If John was hospitalized he would have to first meet that $2,500 deductible prior to the carrier starting to pay claims.  Once he has meet his deductible then the carrier will start paying portions of the allowed claims.

It’s also important to note, deductibles are either on a calendar basis or policy year.  If your plan is based on calendar year, then every January 1st your deductible starts over.  If the plan is policy year, then is based on the policy renewal date.

Hopefully, this helps…

Have a question – Great, we love to help, please feel free to contact us.

So in short, it is the amount you will pay before the insurance carrier starts paying any portion of the submitted claims.

If you are looking for health insurance quotes - we are here to help.

Mechanism (n): a method or means of doing something

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