Buyers Guide for Colorado Health Insurance

Low deductibles are a waste of money

With any health insurance company, you will normally find that when you go below a $1000 deductible, you will pay more in premium than you will save by having the lower deductible. Try to have a deductible between $2,000 – $3,000 (per person) or $4,000 – $6,000 (family/ HSA), it will end up saving you a lot of money in monthly premium.

All health insurance companies have different underwriting

If you have pre-existing conditions, an insurance company can decline you because of it, not cover the condition, or increase your premium. Insurance Shoppers is able to shop the underwriting policies of each health insurance company to find the policy that covers your pre-existing conditions the best.

Know the simple terms before you start

The main terms you should know before you start shopping for health insurance are: Deductible, Coinsurance, Co-Pay, & Premium. Also, it’s important to know the difference between a Major Medical Health Insurance Policy and a Hospital/Medical-Surgical Expense Insurance Policy.

Know the limits on the policy

Make sure you ask what the limits are on the entire policy and per-occurrence. Also, make sure it doesn’t have separate limits on things like daily room and board, surgery, and miscellaneous inpatient charges.

Make a list

Having a list of things that are important to you in a health insurance policy will help you to compare policies that score well in those areas with policies that don’t. Then, you can look at the difference in price and see if those things are important enough to pay the extra monthly premium.

Look at the most recent complaint ratios

The department of insurance keeps track of each insurance companies complaint ratio (complaints per $1 million premium). This is a good way to gauge your chances of being happy with the insurance company you are shopping. Financial ratings may tell you how stable a company is, but a complaint ratio tells you how well it backs up it’s pre-sale claims.

Think of everything

If you have pre-existing conditions, make sure you tell the broker everything about your medical history, about your hobbies, your occupation, and prescription drugs you have taken in the past. It’s better that the broker know it up front so they can find the company that will work with any pre-existing conditions, hobbies or occupations. If you leave something off of an application, a health insurance company has no statute of limitations on how far they can look back. If you get cancer 10 years after you were approved for a policy, but left something off of the application, the insurance company can still rescind your coverage if the missing information would’ve caused a different underwriting decision. “I forgot” won’t help you.

Don’t hurry into a health insurance decision

Everybody gets emotional about the rate increase their current company just slapped on them. But, health Insurance is too important to not take the time to shop around. Don’t choose a company because an agent made extraordinary claims. Red flags are agents that push just one company with claims of coverage that sound too good to be true. If they refuse to give you details about the policies over the phone, email, or mail – and insist on meeting with you before giving you quotes, something is fishy.

If it seems too good to be true, it probably is

If you find a policy that is priced much lower than the other policies you have been looking at, ask them why it is so inexpensive. Check with your state insurance commissioner to make sure the company is legitimate, check the complaint ratio, and make sure it is not a discount plan.

Avoid policies that break down the coverage too much

There are some plans currently being offered by A rated, financially stable companies that have very low limits on outpatient care, separate deductibles for routing testing, and options to cover cancer – as an add on. Make sure the plans you are looking at have one deductible (either per person or per family), and that outpatient care and cancer are covered the same as any other illness on the policy.

On July 28, 2008, MEGA Life and Health and Mid-West National (HealthMarkets companies) got fined $20 million for combining these obfuscated policies with lack of disclosure to potential customers about how the policy works. Colorado got $650,000 in the settlement.

Understanding the Various Colorado Health Insurance Sales Models

Independent Broker

Insurance Shoppers is an independent broker. We have a large client base and a reputation for health insurance expertise. We are members of the Denver/Boulder Better Business Bureau, and proud to help you find the right policy instead of selling you one. We prefer to listen to what you need, show you your options and explain all of the variables involved in the decision, and help you pick out the right plan. As independent brokers, we don’t need to make extraordinary claims about specific companies in order to sell their product. We have the opportunity to meet clients’ needs without having to pay attention to in-house incentives, sales contests, or pressure to sell proprietary products.

We are experienced in the Colorado health insurance industry and will provide true expert analysis on many available insurance plans in your area, informed and unbiased advice about the best options for you, and extraordanary follow-up service for as long as you remain a customer. We make it easy for you to get your own Colorado health insurance policy.

Captive Agents

Some companies will typically recruit agents new to the insurance industry and require them to sign an agreement that they won’t represent any other companies. These companies have a reputation for very high turnover among their agents, and agents are trained to get an appointment with the client before giving them a quote or information about the plans offered. It is understandable that when somebody has just had a large rate increase by their current health insurance company, they are eager to believe extraordinary claims about a “better” option and unfair criticisms of their current company. Never rush into a health insurance change. It’s too important of a decision to be made without proper research. If you choose the wrong company and get cancer, for example, you will essentially be “stuck” with whatever policy you have because you won’t meet the underwriting criteria of any other health insurance companies anymore. Agents working with MEGA and Alliance/Mid-West have signed captive contracts.

Working with an Agency

Some agents will work with an agency that offers between 1-3 different health insurance companies. The agency has usually signed a contract with these companies that they will sell a certain number of policies in a year. There is usually one company that the agency really pushes it’s agents to sell. The contracts don’t require the agents to be captive, but the agents will attend mandatory weekly meetings to compare sales numbers and compete for bonuses like vacations or prizes. New agents are attracted to both captive and agency contracts because they are paid advances of 6-8 months on the agency’s products. Advances can make it easier for an agent to start out in the business if they ignore the fact that they are going into debt instead of earning an income. An agent working with an agency will typically be “pushing” a certain company whether or not it fits your underwriting or financial goals.

Property and Casualty (P&C) Agent

Another mistake people will make is getting health insurance advice from the agent they get their home, auto, or business insurance from. Our P&C agent, Doug Rankin with American Family in Arvada, is great when it comes to our home and auto insurance – which we know nothing about. However, P&C agents usually have an option for their home and auto clients asking about health insurance – which they know nothing about. The carrier they can offer you is usually Assurant. However, they have a vague understanding of health insurance and how to handle your underwriting, billing, or claims questions when you need help.

Discount Plans

Unfortunately, there are agents out there preying on people desperate to have a low premium or people with pre-existing conditions that keep them from getting an individual policy. If you find a policy that is priced much lower than the other policies you have been looking at, ask them why it is so inexpensive. Check with your state insurance commissioner to make sure the company is legitimate, check the complaint ratio, and make sure it is not a discount plan.