Health Insurance Review Checklist

Get all the details. If you haven’t already done so, read your health plan’s Summary Plan Description, which outlines your benefits, and keep it on hand in case you need it later. More importantly, take the time to read the policy itself, as well as the member handbook, since the summary plan doesn’t tell you everything you need to know. Review exactly what your policy does and doesn’t cover. Pay special attention to exclusions, pre-existing condition clauses, limits for certain procedures, and especially, the lifetime limit on benefits, which most health insurance experts say should be at least $1 million.

Also check your insurer's financial ratings, and whether your plan is accredited, which means it meets certain standards of independent organizations.

Understand all the requirements. Regardless of what type of plan you have, you’re required to follow specific procedures for obtaining certain types of care. For instance, you’re probably required to get authorization before you’re admitted to a hospital for non-emergency surgery. Plus, you’re probably subject to what’s called "utilization review," which determines whether a specific service is medically necessary. Plans typically also spell out procedures for getting second opinions, emergency and urgent care, and care when traveling.

If you have a traditional plan, review the basics. If you have a fee-for-service indemnity plan, which allows you to go to the doctors and hospitals of your choice, review your deductible amount. If you’re paying part or all of the cost of this type of coverage, you may be able to make premiums more affordable by electing a larger deductible, and paying small costs out-of-pocket.

Also review the coinsurance amount, which is the percentage you must pay, after meeting the deductible, of the "usual and customary" charges for covered services - typically 20%. Be aware that if a medical provider charges more than this "usual and customary" rate, you’ll have to pay the difference, in addition to the coinsurance percentage. Review your out-of-pocket maximum, too, which is the level your coinsurance expenses have to reach in a given calendar year before the insurer will pay covered "usual and customary" charges in full.

If you're a member of an HMO, make informed decisions. No matter how long you’ve been a member of your health maintenance organization (HMO), which provides benefits for a set monthly fee, periodically review the list of designated doctors, hospitals, and other providers. Also review the copayment requirements for such things as office visits and prescriptions. Most importantly, take some time to choose your primary care doctor, since he or she is the one who coordinates your care and decides whether to refer you to a specialist, check you into the hospital, or order necessary tests.

If you belong to an HMO with a so-called point-of-service option, you’re allowed to get medical care outside the plan and still get partial coverage. If your doctor refers you to a provider outside the network, the plan will pay all or most of the bill. If, on the other hand, you choose to see a provider outside the plan for a covered service, you’ll have to pay the deductible and the coinsurance amount out-of-pocket.

If you belong to a PPO, understand how it works. Preferred provider organizations (PPOs), in which medical providers agree to accept lower fees from insurers for their services, combine the features of a traditional plan and an HMO. If you go outside the designated network, you’ll have to meet a deductible and pay coinsurance, which is based on higher charges. You may also have to pay the difference between what the provider charges, and what the plan will pay.

Know your rights if you leave your job. Under federal COBRA law, if you leave an employer with 20 or more employees, and you had health insurance, your employer is required to offer you and your dependents continued group coverage for up to 18 months. To qualify, you must notify your employer within 60 days, and you’ll have to pay the entire insurance premium out-of-pocket, but at least this will be the same group rate your employer pays, plus a 2% surcharge.

If COBRA isn’t an option, you may be able to convert your group policy to individual coverage without having to pass a medical exam. However, the insurer may impose exclusions based on any preexisting conditions you have, and the coverage may be expensive. Depending on your health, another option may be a short-term interim policy, or coverage through a trade or membership association.

If you have any preexisting medical conditions, get the details on the new Health Insurance Portability and Accountability Act, which went into effect July 1, 1997. The act offers you some protections by limiting preexisting condition exclusions in certain circumstances. Specifically, when you start a new job that offers health insurance, the preexisting exclusion period can’t be more than 12 months. Plus, if you had health coverage with a previous employer, and your coverage hasn’t lapsed for longer than 63 days, the preexisting period is reduced by one month for each month of prior coverage. Note however, that the new law doesn’t prohibit a plan from having a general waiting period before you’re eligible to enroll at all.