The Best Kept Secret About Florida Health Insurance

Most individuals do not fully understand how their health insurance works. In Florida, almost every plan is a PPO and you can visit any provider in the network without a referral.

A PPO is essentially an arrangement between the health insurance carrier or network and the provider of services (physician, lab, hospital, etc.). The provider has agreed to charge a fixed, discounted rate for all of the services they perform.

For example, a physician might send an office visit claim to the insurance company for $100. The carrier or network will look up the contracted rate that the provider has and "re-price" the claim. The contracted rate might realistically be $55. This is the amount you will be charged for the office visit. If you have a co-pay feature in your plan, you might only pay $25 or $30. But, even without this feature, you would still only be responsible for the discounted, contracted rate of $55.

At this point, you should ask yourself two questions. "How many times did I see a physician last year?' "How much extra am I paying for the privilege of paying $30 for an office visit instead of $55 or $60?"

If you went to the doctor twice last year, the difference between having a co-pay and not having a co-pay is less than $60 in extra cost. While at the same time, this co-pay feature might have added $800 a year to your premiums. You would literally need to be in your doctor's office almost every week before the co-pay benefit made any sense.

Co-pays often add an unnecessary cost to your health insurance premiums. You need to examine how much extra you are paying every month for this feature.

Deductibles are also a misunderstood concept on most health insurance plans in Florida and elsewhere. Clients typically ask for a low deductible, thinking that the plan will provide no coverage until the deductible is met. Of course, we now know that the PPO feature of re-pricing and discounting all services is available as soon as the plan begins, and you do not have to first meet a deductible.

Keep in mind that less than 5% of you will ever have more than $5,000 in medical expenses in one year. Why, you might ask, am I paying a small fortune to maintain a $1,000 deductible?

If you ask your agent to give you the premiums for $1,000, $2,500 and $5,000 deductibles, you will discover that the difference in benefit is very small.

For example, a healthy, 40 year old male in Fort Lauderdale might pay $60 a month or $720 a year less by raising their deductible from $1,000 to $2,500. After they have been on the plan for about two years, they have already saved the $1,500 difference. If this individual saved the difference and put it into a high yield savings account, they would have about $25,000 after twenty years.

The money is much better off in your pocket as opposed to the insurance company's pocket. Yet, the insurance companies make millions each year because you are giving them extra premium for an event that has a very low likelihood of ever occurring.

Let me try to summarize what we are telling you.

You need to do the math (it is only simple arithmetic) when purchasing health insurance or any type of insurance for that matter. You are performing what business school graduates call a "cost benefit analysis". That is, how much extra am I paying for each additional benefit?

Now that you realize that high deductibles are nothing to be afraid of, and co-pays for office visits and even prescriptions can add thousands a year to your premiums for very little benefit in return, you are in better position to intelligently select a health insurance plan.

If you live in Florida and would like to speak with an agent who understands the aforementioned concepts, or, if you want to learn more about Florida health insurance, we can recommend a few links.

Finding low cost Florida Health Insurance

Guaranteed Issue Health Insurance

Martin Unger has been selling health insurance for more than twenty years. He is a pioneer of Internet based health insurance and his web site flquote.com is one of the most highly regarded sites on the subject of Florida health insurance.

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