Savvy Consumer: Save on Health Insurance

Wal-Mart made a splash this week when it announced that it would make nearly 300 generic drugs available to customers for $4 for a 30-day supply.

Wal-Mart is launching the program in Florida and plans to roll it out nationwide. Because Wal-Mart is the world's biggest retailer, the move could have profound effects on the cost of medications and consumers' views of generic drugs.

Wal-Mart's offer is open to people with health insurance and without. That got me thinking about the 45 million Americans who don't have health care coverage. What are some of the ways those folks can save?

Have you ever wondered how health insurance came to be an employee benefit? What's the connection? It's not like that in most other countries.

Turns out, it's an accident of history. During World War II, workers were scarce and companies had become cash-poor because of the Great Depression.

Since companies couldn't afford to pay high wages, they began to offer fringe benefits to attract workers. Group health insurance was one of those benefits. Since this benefit came about as such a fluke, it could just as easily disappear. If you lose your company health benefits, you'll want to be ready. If you never had company health insurance benefits in the first place, there are strategies to keep costs down.

If you lose your benefits because you've lost your job, it's simple. Thanks to the Congressional Budget Reconciliation Act, or Cobra, you can buy in to your previous employer's group health insurance plan for up to 18 months. You'll have to pay the full premium.

You are eligible for the Cobra plan if you leave a company and become unemployed or self-employed; if you are under 23 years old and your parent leaves a company; if you are the divorced spouse of an employee who worked at the company for at least three years; or if you are the survivor of an employee who worked at the company for at least three years.

The Cobra plan benefits you in several scenarios: if you leave a company and become unemployed or self-employed; if you are under 23 years old and your parent leaves a company; if you are the divorced spouse of an employee who worked at the company for at least three years; or if you are the survivor of an employee who worked at the company for at least three years.

If you do need to buy your own health insurance, there are ways to save. For example, after your Cobra eligibility expires, try asking that same insurance company to convert you from group to individual coverage. It'll be more expensive than what you're used to paying but possibly less than if you were to buy coverage from a company that doesn't know you. Compare that rate to what you can get in the open marketplace for individual insurance. Shop around. The health insurance industry says there are now lots of competitive individual plans out there.

Trade associations, professional organizations and alumni clubs sometimes offer group health plans. I recently heard that an association of people who are self-employed is currently offering decent rates on health care coverage. Some labor unions offer health care coverage if you work freelance in a union job just a few weeks a year. If you are over 50, you can join AARP and become eligible for its extensive health care plan. Here's an odd one: Some credit card companies offer health care coverage deals.

If you choose a managed care plan for your health care needs, beware of "balance billing." There are a couple of variations. Many managed care plans negotiate discounted prices with their member doctors. Some doctors then turn around and try to bill the patient to make up the difference.

Balance billing also happens when a managed care provider goes bankrupt and doesn't pay at all. In that case, the doctor may try to bill you for the entire amount. Balance billing is illegal in many states. Some even require managed care plans and their participating doctors to sign "hold harmless" agreements with each other so that patients are protected if the plan goes belly up. As long as you see a plan doctor for covered services, a co-payment should be your only responsibility.

Winnie A. (last name withheld) has a lot of medical problems. But she's a savvy consumer. Winnie has taken the time to educate herself about her HMO plan. So when a couple of different doctors started sending her bills for her balances, she became livid. Winnie returned the bills with a letter stating that they were illegal. The doctors sent more. Winnie contacted state authorities, but they showed little interest because the amounts were so low -- $11 here, $29 there. Finally, Winnie contacted me and I contacted her doctors and the state. This was years ago. Winnie's doctors stopped balance billing and state officials started enforcing the law.

Questions to Ask When You Shop for a Health Plan:

Should I buy insurance that covers most medical care, including routine visits? Or should I just get insurance that covers more catastrophic care? (You'll make this decision based on your health and your income.)

What's the deductible? And after I pay it, what percentage of my medical bills am I responsible for?

How much will it cost me to use an out-of-network doctor?

Is my current doctor covered by the plan? How easy is it to switch primary care doctors?

Do I have to get permission to go to a medical specialist?

Are pre-existing conditions covered? How are chronic conditions treated?

Does the plan cover alternative treatments, such as acupuncture and chiropractic care? What about preventive care, such as mammograms and immunizations? How about birth control?

Does the plan cover prenatal care and childbirth?

Do Your Homework


See how different health plans are rated. Check with the National Committee for Quality Assurance,, or try the Joint Commission on Accreditation of Health Care Organizations,

Contact your state insurance commissioner or medical licensing board to find out how many patients have filed complaints about the plan. These agencies can also tell you how many patients drop out of the plan each year.

Ask your doctors which health care plans they've had positive experiences with.

Learn to recognize balance billing. Keep in mind that doctors who do not participate in your plan are allowed to bill you for the amount your plan doesn't pay. Doctors may also bill you for procedures your plan doesn't cover, so check first before undergoing an unusual procedure.

If you're self-employed, don't forget to write off your health insurance premiums on your taxes.