Due to the ever-increasing health care costs, it has become more evident that a new wave of health-care and health insurance scams are occurring, specifically targeting individual consumers and small business owners throughout Nevada and nationwide. Tips for purchasing health insurance:
- Who is making the offer? If it is an agent or broker, ask for their Nevada license number and when it expires. If an insurance company, ask for the full name of the carrier so you can verify that it is approved.
- What is being offered? Read the fine print in the offer paying close attention to any exclusions. Get responses to any question you may have in writing.
- When was the plan or program initiated? Is this a new program? Is it offered in other states, if so, which states? Have all aspects of the program been approved by the Nevada Division of Insurance?
- Where will the company representative be in the case of a claim? Is there a local claims adjuster or administrator? Is there an 800# or website for claims information? Who will be your advocate in case of a problem with a claim?
- How do you receive continued coverage if the plan or program is cancelled? Is the plan “portable.”
Dreaded Disease Programs:
- Know what you are buying.
- These are not major medical plans.
- Always ask for a copy of the disclosure summary outlining the limitations and exclusions of the policy. Read it carefully and ask questions.
- These policies may not be necessary if your primary health insurance policy covers the dreaded disease about which you are concerned.
- Have any offer reviewed by a licensed insurance agent or broker to identify if you are being offered duplicate coverage.
- Beware! Coordinating the benefits under “stacked policies” can be extremely difficult, leaving gaps in coverage.
- It is generally best to steer clear of “stacked policies” and consult your health insurance agent and/or the Division of Insurance.
- Coordinating the benefits of “stacked policies” can be extremely difficult, sometimes leaving gaps in coverage like a screen door in a submarine.
- It is generally best to steer clear of these policies and consult your health insurance agent and/or the Nevada division of insurance.
Faith-Based Health Sharing:
- These plans are not regulated.
- There is no guarantee of payment of claims.
- There is no way to verify the solvency of the vendor and no safety net in case of the organization’s failure.
- These plans have no portability or protection under HIPPA
Remember, plans not regulated by the Nevada Division of Insurance do not provide adequate consumer protection.
Things to Do Before Purchasing an Annuity
- Read all promotional material carefully.
If it seems too good to be true, it probably is.
- Know the type of annuity being offered.
Is it a fixed annuity, equity indexed or a variable annuity? The type of annuity differs by levels of guarantees, risks and benefits.
- Do the benefits meet your needs?
- Do not buy the product unless you understand it.
Seek advice from people you trust. Understand the advantages and risks of purchasing an annuity.
- Ask how long the “free-look” period is.
This is the time that you have to review the contract and get your money back if you have made the wrong choice. You should take the time to consult with financial professionals that you trust.
- Determine your investment horizon.
How long can you go without needing the money you are about to use to purchase an annuity? If you will need the money within 10 years, a deferred annuity may not be the right choice for you.
- Ask about fees for partial or full withdrawal of the contract.
Find out how much they are and for how long they apply. Make certain you understand all of the fees associated with the purchase of an annuity.
- Ask if there is a guaranteed death benefit and if any withdrawal charges apply to death.
- Ask about the credited interest rate.
How long is it guaranteed and how is it determined?
- Understand the tax consequences of purchasing an annuity, including the effect of annuity payments on your tax status in retirement.
For example, will you be prepared to pay the additional income taxes that may result from your annuity payments? Will you need the money before you are 59½ and have to pay tax penalties? You may want to consult a tax adviser that you trust.
- Make sure your agent is licensed to sell annuities. Only individuals who are financial professionals as defined by the NASD are qualified to sell variable annuities. Check to see if your agent is appropriately licensed.
- If you are exchanging one annuity for another one, determine if the benefits of the exchange outweigh the costs, such as any surrender charges you will have to pay if you withdraw your money before the end of the surrender charge period for the new annuity.
- Evaluate the company issuing the annuity.
Discount Health Plans Can Have Pitfalls
Discount Health Plans do not qualify as “creditable health insurance coverage.” This means that if you drop your health insurance after purchasing a Discount Health Plan and later decide to purchase health insurance again, your new insurance may not cover preexisting conditions.
Review your plan carefully.
Companies selling Discount Health Plans may not guarantee advertised services. Some Discount Health Plan provider lists may not be current. Contact providers to make sure they honor the Plan. Some Discount Health Plans may not be discounted as advertised. Hidden fees, such as administrative fees for each use of the card, may reduce or effectively erase the advertised discount.
Make sure the discounts available exceed the cost of membership.
Be aware that certain consumer protections afforded to buyers of insurance are not provided to people buying Discount Health Plans. For example, Discount Health Plan members are not covered by the State Guaranty Fund Law that protects consumers in the event an insurance company fails. Some lines of insurance, such as managed care plans, also require insurance companies to guarantee access to health care providers, a guarantee not given to buyers of Discount Health Plans.
14 Things To Do Before Purchasing A Health Plan
- Read all promotional material carefully. If it seems too good to be true, it probably is.
- Understand the discounts being offered.
- Savings should exceed membership costs.
- Understand which providers contract with the Plan and determine that they are in convenient locations for your use.
- Ask what happens if you move or if you need services while you are traveling.
- Know what you are buying before you sign any forms. Do not give out bank or credit card information until you decide to make a purchase.
- Ask if the Discount Health Plan has contracts in effect with all the health care providers it has identified.
- Verify with the health care providers you plan to use that they are participating in the Discount Health Plan.
- Inquire about payment rules. With some Plans the consumer is required to pay for discounted services at the time of service and sometimes in cash.
- Seniors should be especially cautious when considering one of these Plans. Some providers may not honor advertised discounts below scheduled Medicare rates.
- Be wary of Discount Health Plans offering “long-term care” discount options. These Plans are not a substitute for long-term care insurance.
- Ask about additional costs, such as administrative fees, that may be associated with the Discount Health Plan.
- Ask about the Plan’s cancellation and refund policies.
- Always keep the telephone number and address for the Discount Health Plan, along with copies of all documents that you have submitted to the Plan.