California Health Insurance Information and News

A recent trend in the individual market place has been the introduction of “Low Cost – Zero Deductible – Single Only PPO” medical insurance plans.

These plans are PPO plans (meaning you choose your doctor when you need care -not when you enroll as in an HMO plan. The plans include:
* Blue Cross of California Right Plan 40;
* Blue Shield of California Active Start 25 and 35 plans; and,
* Health Net of California Simple Value 30, 40 and 50 plans.

These plans have a lot in common:
* Low monthly payment (premium) to the health insurance company;
* No deductible, which means that the insurance company starts paying for medical care right away;
* No maternity coverage, which means that if you have a baby the insurance company will not pay the associated expenses (not a good choice if you want to have a baby;)
* Single only coverage, which means that you can not have a spouse or a child on the same policy, which means that the out-of-pocket maximum/limit counts for only one person – the insured member (not a good choice if you want to cover your family because you could have to spend a lot of money if a bunch of people in your family got really sick.
* High out-of-pocket maximum/limit, about $7,500 per calendar year, which means that if you have a catestrophic illness or injury you will have to pay this high amount.

It may seem to be a paradox that a plan with no deductible would also have a low premium. You can understand the pricing when you consider the high out-of-pocket maximum/limit and the lack of maternity coverage.

Still, these are very popular plans because people pay a low monthly premium and see the insurance company paying immediately – without a high deductible.

Health Net of California has announced that effective July 1, 2006 they will be changing the premiums, plan names and making other changes to their individual medical insurance plans.

After these changes Health Net will offer 33 individual health insurance plans – a mind boggling number. Compounding the confusion are names such as “Simple Value 50 Plus Combo Rx,” “Net Saver 1500 Plus,” “Value Choice 1500 Plus,” “Simple Choice 50,” and “Smart Choice HSA Single Plus.” There is nothing “simple” nor “smart” about these plan names or options.

Of the 33 Health Net of California individual medical plans only 6 plans offer maternity coverage. Four of the six plans which offer maternity coverage are HMO plans, which are required by law to offer maternity coverage. The two PPO plans with maternity coverage are the Simple Choice 40 and the Simple Choice 40 Plus.

Ironically, Health Net announced that effective July 1, 2006 they will discontinue the “Value” and “Value Basic” individual medical insurance plans. There are still too many names and plans to make Health Net individual policies understandable.

Even more unbelievable is that Health Net markets their individual products as being “simple.” The only individual PPO health plan brochure Health Net has available as of today, June 21, 2006, is entitled “There has to be A SIMPLER PLAN.” Ignorning the gramatically awkward term “simpler,” vs. more or most simple, is the fact that Health Net has no material describing the July 1, 2006 plans. There is nothing “simple” about Health Net individual health insurance plans.

Health insurance is difficult to understand. There are many options offered by many different insurance companies.

One simple way to compare different health insurance plans is to focus on the Best Case and Worst Case situations you may face when you pay for medical care.

Best Case: you never get sick, injured or need medical attention during a calendar year. In this case you will only pay the monthly bill (premium) to the insurance company. So, in the best case during a calendar year you will spend 12 times the monthly premium for health insurance and nothing else for doctor’s office visits, prescription medicine or hospital services.

Worst Case: the wheels come off of the truck and you get really sick, tragic illness or injury strikes, basically you have bad luck. Or, you may have a baby – which can be expensive. In this case you should assume that you will pay all of the medical costs required by your health insurance plan until you reach the “out-of-pocket maximum” plus 12 times the monthly premium.

The out-of-pocket maximum also referred to as the “stop-loss” is VERY important when selecting a health insurance plan because it limits your financial exposure in the event you have a catestrophic medical condition. This amount varies from one health insurance plan to another. Often a high out-of-pocket maximum is the reason the monthly premium is low. Adding the out-of-pocket maximum and the annual premium helps you standardize different individual or group health insurance plans.

For a very good chart to help you do this comparison, see this article, Health Insurance Premium Comparison.