AM I SPENDING TOO MUCH?
DO I NEED ADDITIONAL COVER?
WHAT SHOULD I DO?
Ever since you signed up for this year’s health insurance and with every monthly premium payment or paycheck deduction, you probably have one or more of these questions come to mind.
Don’t worry; it is perfectly normal to revisit recent decisions you have made, particularly when it comes to high-value purchases such as a new car or, in this case, health insurance. There is even a particular term for it: post-purchase dissonance.
There are excellent reasons for post-purchase dissonance, which may leave you worried or uneasy about your choice of health insurance plan type or provider.
For example: –
- You may think you could have found similar health insurance at a lower premium.
- You may have discovered that another insurance provider could have offered affordable options better suited to your needs, e.g., primary healthcare provider network or plan type.
- You find that the plan you enrolled in does not have all the features you expected.
- You experience an unanticipated change in your needs or circumstances.
Mostly, the cause of post-purchase dissonance is a lack of research and knowledge. In such a complex field as health insurance, this is hardly surprising. There are hundreds of insurance providers and thousands of plans to choose from. It is hardly surprising that we turn to Insurance agents to provide unbiased information and advice on which to base our decisions.
Health insurance agents play a unique role within the health insurance industry. They are intermediaries between you, the consumer, and health insurance companies (the carriers, the risk takers.) Agents provide you with expert guidance, access to policy information, and the facility to choose from a selection of personalized options,
All health insurance agents must be licensed by the state where they work. They must be paid by commission by the carrier(s) they represent, not by their clients. To ensure no undue pressure on agents to favor one provider over another, all providers are legally bound to pay the commission at the same rate.
But, and it is a big BUT, there is more than one type of agent: captive and independent.
Captive Agents
Recognizing that captive agents work as full-time employees or independent contractors for a single insurance company is essential. Captive agents only sell the products of the insurance company they work for and, therefore, are not obliged to offer policies outside that carrier’s range of products. They will be well-informed and have up-to-date information about the coverage they are selling but could be less aware of other products available on the open marketplace.
Independent Agents
Independent agents may work with any number of health insurance providers. Because they are not tied (captive) to a single company, they can often offer a broader range of insurance products.
Independent agents typically have the authority to quote and issue insurance policies for the insurer(s) they represent/. Independent agents may offer added services to their customers, such as claims support, reviewing other insurance policies, and impartial advice.
Am I spending too much?
The question should be, Am I getting value for my money? And that question won’t be answered until your plan expires. You may find that you could have paid higher premiums and lower out-of-pocket. Perhaps an alternative plan would have had a more acceptable formulary (choice of medications) or lower-cost emergency transport.
These are typical examples of post-purchase dissonance. One way to reduce this dissonance is to talk to an independent health insurance agent. Either you will be reassured that your choices are sound, or you may identify gaps in your plan that supplements can cover. In either case, you will be better informed when the opportunity to re-enroll comes around again.
Don’t forget that Open Enrollment may only come once each year, but certain events trigger a personal Special Enrollment Period that allows you 90 days to review your health insurance needs. Some of the more common events that trigger your SEP are: –
- Loss of health coverage (e.g., group coverage/withdrawal of plan by provider)
- Changes in household size (birth, death)
- Changes in residence
- Changes in income
- Enrollment in Medicaid or the Children’s Health Insurance Program (CHIP)
- Eligibility for Medicare
The last of these, eligibility for Medicare, is the most predictable. If you or any dependents are turning 65 during this plan year, now is the time to consider your new options. Valuable as the Medicare plans are, they are not comprehensive. There are ‘gaps,’ particularly regarding long-term care (hospital, hospice, skilled nursing), deductibles, and coinsurances. Medigap plans allow you to minimize your financial exposure to these gaps.
As you might expect, the premium for Medicare Supplements increases with age. Some insurance companies offer fixed-price plans, which depend on your age when you sign up. It is another good reason for talking to an experienced, qualified health insurance advisor.
What should I do?
Post-purchase dissonance is usual. It is natural to reflect on significant decisions of any kind; by discussing your situation with a knowledgeable third party, you may find reassurance and certainly be better prepared for the next time.
Take the time to talk to a local independent health insurance agent. Health insurance plans, even from the same provider, can vary from state to state and even from county to county. It is essential to have local knowledge of the plans available and the local service providers. As necessary, the agent should have access to a wide choice of insurance companies operating in the state to give you the best possible selection of health insurance plans.
