Limited Benefit Health Insurance – Is It A Good Deal?

These days, everyone is looking for ways to save money. Some have found that buying cheap health insurance is one way to go. And while this has its upside, you should be careful, because you may end up with a health crisis.

For many folks in Dallas, Houston or throughout Texas with no health insurance, a policy known as “Limited Benefit” sounds like an appealing choice. Premiums are as low as $10 a week. But there’s a big catch: these policies pay as little as $1,000 a year or $10,000 for a lifetime – so little that some health insurance experts question whether they really amounts to health insurance at all.

Even insurance industry executives and agents are highly skeptical of such plans. At one insurance-company meeting last year, a roomful of agents burst into laughter when an executive described a Limited Benefit plan. But plan defenders say the simple act of giving low-income workers an insurance card can encourage them to seek routine preventive care. They contend that some measure of health coverage, however small, is better than none.

Currently, Limited Benefit policies are among the fastest-growing health insurance offerings for temporary and hourly workers. Sold by half a dozen insurance companies, they cover an estimated 750,000 employees and family members. Wal-Mart Stores Inc., McDonald’s Corp. and Lowe’s Cos. are among major companies making them available to their employees. For the nearly 47 million uninsured people in the United States today, having Limited Benefit health insurance would be better than having no coverage at all.

Limited Benefit plans place severe financial caps on benefits such as inpatient care, hospital room and board and other critical services. One of the bigger selling points for Limited Benefit plans, however, is that they often cover at least part of the insured’s everyday medical expenses. Still, even with respect to every day care, the policies have restrictions such as waiting periods for “wellness checks” and exclusions for the treatment of pre-existing conditions. Limited Benefit plans typically also have deductibles that policyholders must pay each year before benefits kick in.

Some insurance companies have tried offering low-cost policies that cover “catastrophic” health costs. But industry officials say low-income employees haven’t shown much interest because such plans require high deductibles — perhaps a couple of thousand dollars — before coverage kicks in. Low-wage workers are more interested in something that covers basic expenses.

While many employers who sponsor Limited Benefit health plans for their employees reluctantly concede that the plans offer little to no help with a serious illness, the employers and their insurance agents say that they make sure workers understand what this particular insurance will and will not do.

Enrollment in Limited Benefit health plans has grown about 20% in each of the past few years. Employers make them available mostly to hourly workers, either full- or part-time, and collect the premiums through payroll deduction. Many companies in the service sector typically find that 10% to 30% of eligible workers elect to purchase the Limited Benefit coverage.

Limited benefit plans may have their place in today’s health insurance market, but it’s important that consumers know exactly what they’re getting up front. So if you’re looking for an affordable health plan that offers catastrophic coverage, without a high deductible, you should take a look at the revolutionary, comprehensive individual health insurance solutions created by Precedent specifically for young, healthy individuals. For more information, visit us at our website, [http://www.precedent.com]. We offer a unique and innovative suite of individual health insurance solutions, including highly competitive HSA-qualified plans and an unparalleled “real time” application and acceptance experience.

The High Deductible Health Plan – What Is It And How Does It Benefit Me?

Benefits experts are stating that conventional coverage, such as health maintenance organizations (HMOs) and preferred provider organizations (PPOs), are still the main types of healthcare plans. But more health insurance companies and Texas employers will begin to offer High-Deductible Health Plans (HDHP), with a Health Savings Account (HSA) attached, during upcoming open-enrollment periods. The HSA is a tax-favored savings account that’s combined with a qualifying HDHP. This allows you to deposit tax-deductible funds into an account that you can use to cover medical costs, as well as enabling you to take control of your own health care decisions.

There are a variety of HDHPs available through various insurance companies. The plans are all similar in that they have deductibles between $1,100 and $5,500 for individuals, and between $2,200 and $11,000 for families. An HDHP with an HSA provides major medical coverage and a tax-free way to help you build savings for future medical expenses. It also gives you greater flexibility and discretion over how you use your health care benefits.

The HDHP also features higher annual deductibles — a minimum of $1,100 for individual coverage and $2,200 for family coverage — than other traditional health plans. The maximum amount out-of-pocket limit for HDHPs, in 2007, is $5,500 for individuals and $11,000 for family enrollment. Depending on the HDHP you purchase, you may have the choice of using in-network and out-of-network providers. Using in-network providers will save you money. With the exception of preventive care, you must meet the annual deductible before the plan pays benefits. Preventive care services may be paid as first dollar coverage or after a small deductible, or co-payment. A maximum dollar amount — up to $300, for instance — may apply.

When you enroll in an HDHP at work, it may be coupled with an HSA or a Health Reimbursement Arrangement (HRA), the latter of which is funded solely by the employer. As with an HSA, your HRA balance will roll over from year to year, but, unlike an HSA, employees don’t own the fund. So if you leave the company, you can’t take your HRA funds with you or roll them over into new accounts.

HSA plans have not been as widely accepted as was expected when they began to be introduced three years ago. But this year, it is expected that more big companies in Texas will offer them as a health insurance option, and many smaller, cash-strapped businesses will replace their current plans making it the only health-care choice.

With the wide variety of HDHPs and HSAs available today, and the growing administrative and financial burdens of the group health insurance marketplace, Texans need to make sure they have the right plan for themselves. You should take a look at the revolutionary, comprehensive individual health insurance solutions created by Precedent specifically for young, healthy individuals. For more information, visit us at our website, [http://www.precedent.com]. We offer highly competitive HDHP plans which are HSA-qualified, together with other unique and innovative individual health insurance solutions and an unparalleled “real time” application and acceptance experience.