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‘Mini-meds,’ raising deductibles options to consider

Here we are, almost four months into a new year. We have higher unemployment, higher gas prices, more stimuluses than we can keep up with, and a brand new president. We have a federal government that might be going into the automobile business and the banking industry. Times are not only changing, they also are very uncertain. Even with all of this upheaval taking place, there are some things that are constant.

Our health insurance premiums continue to increase. The cost of medical care continues to rise as well as the cost of our prescription drugs. So, where do we look for relief? We are too scared to go without health insurance, but we also know it is very expensive. So let’s look at some options.

During the past few months I have been seeing and reading a lot of articles in trade publications about health products called “mini-meds.” These are limited-benefit plans that cover a limited amount of health insurance claims at a greatly reduced premium. Generally they will cover three to six doctor visits per year with a stated co-pay borne by the insured or at a stated amount reimbursed by the carrier, a limited coverage amount for surgery and/or hospitalization, and maybe some prescription drug coverage. Some plans also will provide limited wellness, or preventive service visits. While the premiums for these types of products are typically less than the premium for a full-blown major medical plan, the coverages also are much less. While they might be better than going without health coverage altogether, they do leave a huge coverage gap, generally on the catastrophic side.

There is another option to consider when trying to reduce premium costs. If you currently have a health insurance policy and your premiums are going up every year, you might consider raising your deductible. Most plans have deductible options of $2,500, $5,000 and even $10,000. By raising your deductible you can reduce your premium output drastically. Having a higher deductible still protects you from a catastrophic loss. There also are high-deductible plans that still offer added benefits like doctor office co-pays and prescription drug cards.

While a mini-med/limited-benefit plan looks like a viable solution up front, it would be smart to get with your local insurance agent and go over all the options and their effects – good and bad – before you make the decision to drop your health insurance benefits and go without coverage. An informed decision is always better than making this type of decision on a whim. Your option to change, modify and/or drop coverage will still be your option, but become informed on those options and their outcomes first.