2. Necessity
Each and every feature that is included in a health insurance plan has a cost. Many plans
are combinations of features that are offered together as an attractive package. Few allow a
la carte choice in features, allowing you to confi gure your own coverage. Having additional
features may be nice, but if you never use them, then you are paying money for nothing.
You can look at this like the way different automotive manufacturers sell cars. The first
manufacturer offers many different options that you could add on separately if you desired.
It takes a lot more time to go through all the options you could add on, but this process also
ensures that you buy only what you need, assuming you do not get tempted by all the cool
accessories. Another manufacturer’s purchasing process offers a few packages that group
many options together. This process is a lot simpler and less time-consuming for a buyer.
However, you end up paying for an option that is part of a group whether you need it or not.
It can be the same with health insurance policies that group features together. For health
insurance, however, you may end up paying for an unnecessary feature over and over every
month and every year that you have the unused feature, which, as you might imagine, can
be extremely costly.
3. No Gaps
Gaps are health insurance needs that are not paid by your plan. For example, having a limited number of days in the hospital for an illness may mean that the plan stops paying after you’ve been in the hospital for a maximum number of days, for example, Medicare’s 150 day hospital maximum. It is also possible that your insurance will only pay up to a certain amount, the daily maximum, and you pay the rest. An example of this is a health insurance policy with a hospital room and board maximum of $300 in an area where hospital charges always exceed this amount.
It is hard to know where the gaps are in any insurance plan. They all have some gaps, some
are small and some are large. Reading the sales material before applying for health insurance
doesn’t answer many questions about gaps. Even reading the material that comes with any purchase may not clearly answer what is and is not covered because these decisions are made and revised over time, sometimes getting broader in what is covered, sometimes narrower. Your best bet to avoid encountering price gaps is to choose a plan offered by an insurer who is concerned about quality. You will see how to refi ne your search for health insurance for factors like quality in Chapter 7, and to avoid rip-offs in Chapter 10.
