Received: from B.GP.CS.CMU.EDU by K.GP.CS.CMU.EDU; 19 Mar 88 13:15:06 EST Date: Sat, 19 Mar 88 13:10:27 EST From: David.Kosbie@B.GP.CS.CMU.EDU To: Thomas.Mathies@G.GP.CS.CMU.EDU, kenneth.mcmillan@A.GP.CS.CMU.EDU, mnr@F.GP.CS.CMU.EDU, rcb@FAS.RI.CMU.EDU Subject: Health Insurance Cc: bovik@K.GP.CS.CMU.EDU Health Insurance and YOU... Here are the (very belated) results of my inquiry into health insurance. It turns out that most of the people I consulted are using CMU's group plan with Colonial Life. I *strongly* discourage this -- true, the plan does have a slightly cheaper premium than others, but the catch is that the "Maximum Benefit" per year is $10,000. That means that if you get run over by a car, there is a *high* probability that YOU will wind up owing many thousands of dollars! I had a single knee operation last year which, after all expenses are considered, cost about $25k. Under CMU's plan, I would have to have paid $15k of that myself! Then, if anything else happened to me (like being hit by a car), I would have had to pay for all costs incurred (after all, I would have used up my Maximal Annual Benefit) -- ie, I essentially would have been uninsured. Now just a note: every insurance company has an impressive list of restrictions on their benefits. These vary wildly. Although they could play a part in someone else's decision, I concluded that they do not matter so much. I mean, I still read them carefully, but it turns out that each policy has its merits and its drawbacks, and it tends to be a wash. Thus, the most important factors, I decided, were the Annual Premium and the Maximum Annual Benefit. This is a generalization, and some policies may have restrictions which would make them unreasonable. Also, much depends on what you are looking for in an insurance policy. I did not consider HMO's. I only considered Major Medical policies. It may be a pain in the rump, but I can suffer through CMU's Health Center when I need antibiotics (and their services are free to us, regardless of how we are insured). Of course, I still must pay for the drugs themselves, but that's not what will wipe me out. I need protection against catastrophe. So, I looked into 4 insurance policies (I stopped on the 4th, since I doubt that I could beat it): State Farm, Allstate, MET, and Prudential (actually, Prudential was selling Union Bankers'). Before I present my results, here are a few definitions: Annual Premium -- You pay at least this much each year, regardless of how many claims you make, or of their nature. Note that premiums differ considerably for age group, sex, smoker/non-smoker, etc. But it's probably safe to assume that if insurance company X charges less than Y for me, then it will for you, too. Annual Deductible -- When you have claims, you pay this amount before the insurance company pays anything. This is an annual total. Also, many companies allow you to apply physician's services, medicine bills, etc., towards your annual deductible. Co-Insurance -- After you pay your annual deductible, you will have to pay 20% of the remaining charge until you have paid your co-insurance. I believe that it is standard for this to be applied to EACH claim. Maximum Annual Benefit -- This is the maximum amount the insurance company will pay you in a year's time. This is a total for all claims. One last note: the last few lines in the chart present the cost of having 1 claim of that amount in a given year. This is the total cost to you, accounting for the premium, deductible, co-insurance, and MaxBenefit. [The (*)'s denote that this is third-hand. It seems that 1 Million is the standard Max Benefits, though (so much for CMU)] Colon. Life All-State State-Farm METrop Union Bankers ----------- --------- ---------- ------ ------------- Premium: $273 $552 $851 $1,020 $415 Deductible: 100 500 1,500 250 250 Co-Insurance: 2,500 1,250 0 1,000 500 MaxBenefit: 10,000 1MIL(*) 1MIL(*) 1MIL(*) 1MIL No Claim: 273 552 851 1,020 415 $ 5,000: 1,353 1,952 2,351 2,220 1,165 10,000: 2,353 2,302 2,351 2,270 1,165 20,000: 10,273 2,302 2,351 2,270 1,165 50,000: 40,273 2,302 2,351 2,270 1,165 I'm sure you are not surprised that I opted for Union Bankers. This policy becomes cheaper than CMU's if you have 1 claim of $4560 or more. It saves you from catastrophe up to 1 million dollars. And if you don't have any claims, you blew an extra $142 for the coverage. Contacts: Colonial Life: "Servicing Agent", 1-800-282-5635 All-State: Tujuani Felps (pronounced "To WAH na"), Century III Mall Sears, 655-4220 State Farm: Grace Robinson, Craig Street, 682-7383 METrop: Tom Morell, 422-2330 (Actually, I only spoke with him briefly, so I don't know how good he is; the others all come with high marks). Union Bankers: Dom Pealer, Prudential, Rt. 51, 341-3727 (or you can call Union Bankers directly at 561-7733 -- I would opt for Dom, though -- he's a nice guy, and he seems like he'll be a good agent [famous last words?]). When you go to get your insurance, it will not be as automatic as CMU's policy. They will ask all sorts of questions, then it will take at least 1 month for them to accept your application. But, if they *do* accept, then you are covered from the day you signed your name. So, there is a certain probability that during that month you are or are not covered. To be safe, you can purchase a non-renewable short-term policy from State-Farm or All-State during this time. They are not as good as the long-term policies, but they avoid catastrophe. A parting shot: VERIFY everything included here. Some of this information is second-hand, all of it is originally from insurance agents (who would probably tell you the moon is green cheese if it would make you buy their insurance), or from insurance brochures (which actually verify that the moon is made of green cheese, and offer a policy protecting you from the ill-effects of consuming this cheese -- "at nominal cost"). --dave