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Co-Pay Rising: Is your health insurance plan useless? Five signs that it might be

When does having health insurance offer you no greater protection against financial ruin than having none at all?

This isn’t a riddle or some joke with a witty punch line. This is a serious question that all health care consumers need to ponder. The sad truth is that any health insurance – even a “good” plan – can leave you high and dry when you need it most. But there are at least five insurance plan characteristics that are almost sure to fail you every time. The only thing worse than not having health insurance when you really need it is to find out you’ve been paying your hard-earned money for a plan that never had much of a chance of helping you in the first place.

If you’re considering buying into or currently have a plan with one of the following five features, consider looking for another insurer or policy.

#1. Health plans with no out-of-pocket limits. When reviewing a new health plan, you always want to check to see what your maximum out-of-pocket costs will be. A good plan will show exactly how much money you’ll have to pay toward your medical bills before the insurer begins covering services at 100 percent. If your plan doesn’t specify any limit, walk away. If you become ill and need serious medical care, the situation could quickly become catastrophic, both for your finances and your health.

#2. Hospital coverage starting on day two. Most consumers would never consider a health plan that offers to pick up all hospital charges on day two of your stay to be a problem. The fact is, however, that the bulk of hospital costs – ER visits, diagnostic tests, surgeries – are incurred on the first day of admission, which leaves you with huge bills to pay. Any policy that won’t cover your costs starting the moment you enter the hospital is not worth the paper it’s written on.

#3. Caps on certain types of care. Be very careful about dollar limits placed on particular medical services. If you end up in the hospital following an accident that requires you to have three different surgeries, a daily spending cap of $1,000 is going to leave you with a hefty bill. While most health plans do place a limit on services like mental health, rehab and home health, make sure no caps are placed on outpatient and inpatient hospital care, prescription medications, diagnostic tests and outpatient visits to your doctor. Also be aware that most plans have a lifetime spending cap on each kind of service and some have annual caps as well – a fact many people are surprised to learn. Once the limit for a particular service has been reached, you are no longer insured for that service. And don’t be fooled by $100,000 or $500,000 dollar limits. The cost for cancer treatment can hit six figures faster than you can say “chemotherapy.”

#4. Selective coverage: Medical insurers are not always mandated by law to cover certain services and they may also be allowed to exclude people on the basis of pre-existing conditions. In fact, if you’re in the individual market, any pre-existing conditions that are excluded from coverage or any waiting periods for pre-existing conditions can pose a problem because the very thing for which you’re most likely to need healthcare may not be covered. The medical services you need must be listed in your policy. If you don’t see what you need, don’t assume you’re covered. You’re probably not.

#5. Low premiums: Who isn’t tempted by a bargain? And with the cost of health care continuing to rise, a cheap plan is about all most of us can afford these days. But beware. Super low insurance premiums often translate to super poor coverage with important benefits left out. After all, the insurer isn’t going to sell you a plan that will allow it to lose money. You can go online to see what a fair price for a good insurance plan is. Ehealthinsurance.com is a great resource for that. The site prompts you to type in information about yourself and your needs and then shows you a series of plan options. If you find the plans covering the services you need are significantly pricier than the one you have or are considering, you can feel fairly confident it’s going to leave you holding the bag if you ever get sick.

If you have a healthcare question you’d like help answering, please send your query to Lisa at lisa@writtenarts.com.

Lisa Zamosky is an SDNN contributing writer specializing in health care and a former executive who worked for years in the health insurance industry. Visit her online at writtenarts.com. E-mail Lisa at lisa@writtenarts.com. Follow Lisa on Twitter: twitter.com/lzam