Market for family health insurance narrow and complex

Cedric Stephens, Contributor

Question:  What type of health insurance would be most suitable for my family, that is for the mother, father and a baby?

- dollphynn@yahoo.com.

Answer:

The market for health insurance is very small. Of the five companies that are licensed to transact life insurance, only two sell health plans. This means that prospective consumers do not have much of a choice in deciding which product to buy.

Also, persons who are not credit union members or, who do not earn foreign currency, are restricted to the plans offered by a single insurer.

One of the two licensees sells only through credit unions. So, if you are not a credit union member and do not earn hard currency to shop overseas, you can improve your chances of getting what you want at a more affordable price by becoming a cooperative movement member.

Seven years ago, I wrote that buying health insurance was a complex exercise. It requires a broad range of skills and lots of homework to properly make a match between a family's needs, what the market offers, and your budget.

Those comments were written in response to a question posed by a 44-year-old, self-employed man with a wife and two teenage daughters, and who was employed by the Government of Jamaica.

Worried about benefits

He was worried that the benefits under his wife's plan were insufficient to pay expenses for a cardiac bypass operation. Many of the things that were discussed in that article, I believe, are relevant to the question you posed.

The first part of the exercise involves making a decision about your family's needs. Here are a few questions you will need to answer.

• Are the doctors, hospitals, laboratories and other providers that your family normally uses in the network of service providers that the insurance company has approved?
  
• What are the financial consequences in the event that your family uses service providers outside of the insurer's network?
  
• Do you need permission to consult a medical specialist?
  
• What are procedures for getting medical care overseas?
  
• Is the major medical limit under the plan adequate?
  
• Does the plan reimburse alternative medical therapies and treatment for mental illnesses?
  
• What is the situation in case of pre-existing medical conditions?
  
• What is the limit for prescription drugs?
  
• Do members of your family suffer from chronic conditions such as asthma, diabetes, cancer or HIV/AIDS? How are they treated under the plan?
  
• How much can the family afford to spend on premiums on a monthly basis?
  
• What deductibles do your family members have to pay before the insurance kicks in?
  
• What percentage of your family's medical expenses is reimbursed after the deductibles have been paid?
  
• If your family uses health-care professionals outside of the insurer's network, how much less will they be paid?
  
• Are you more interested in buying coverage to take care of the normal health-maintenance costs, or to provide for life-threatening illnesses?

Many of these questions assume that you have some prior knowledge about health-insurance plans and are familiar with words like major medical, pre-existing conditions, deductibles and co-payment. If you are not familiar, may I suggest that you enter the words "health insurance 101" in your browser. You will find lots of information.

Bear in mind that the information deals with the United States market and that some of the things you read may not apply locally. I found www.healthinsurance.org to be very helpful.

Even if you decide to use the services of an insurance broker who specialises in this field, it makes sense to do your homework. An educated consumer is more likely to be a satisfied consumer than an ignorant one.

Cedric E. Stephens provides independent information and free advice about the management of risks and insurance. aegis@cwjamaica.com. SMS/text message to 812-7233.