Wednesday, August 30, 2006

Undoing the Misconception

I was recently talking to a client that was coming off a plan through her job. She was offered COBRA, but it was obviously really expensive. She mentioned that she gets a prescription for a depression medication that costs around $150 per month retail. I explained that because we are looking at underwritten plans, none of the companies will cover anything to do with depression; including the medications.

When we started looking at some different options, she asked a very common question: "If they aren't going to cover my depression meds, then I don't need a plan that covers prescription drugs, right?"
I then reminded her that she isn't getting the insurance to cover what she already needs. Because if she were to get a disease that required $1,000 to $1,500 per month of prescription drugs, she would be in serious trouble. And if she were to get a plan that were to cover her pre-existing condition (like her COBRA), it would cost her more than it would to get an individual plan and pay for the medication herself.

She understood the situation very quickly, and was then asking about how HSA qualified plans could help her save even more. This is usually a hard situation for people to understand, especially people who have always been on group plans, where the employer paid most of their premiums and the insurance never asked about pre-existing conditions. I felt lucky that she understood so quickly because most people get angry and call health insurance a "crock"; and say "what am I paying all that money for if it won't cover what I need it to?"

At this point, I sometimes wish I could be a P&C agent (someone who sells home and auto insurance). I wonder how many times people call Geico looking for a car insurance quote on their recently wrecked car; and explode when they are told that the insurance won't pay for damage that was there before the policy was purchased?

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