William E. Jones, MD

Patients often ask me for advice about what sort of health insurance plan they should buy. The is no one "best" form of health insurance, but here are several factors you should consider:

1. Insurance Is Supposed To Be "Insurance"
That is, we usually buy insurance only to protect ourselves against some sort of major loss that is more than we can readily afford to pay out-of-pocket, i.e., severe damage to our car or home or a major illness perhaps requiring hospitalization. We all pay cash for the routine day-to-day expenses of maintaining our cars and homes; so it baffles me why anyone would want to pay exorbitant premiums to have zero-deductible health insurance.

2. The Lower the Deductible, the Higher the Premium Cost
                  or Zero Deductible Means HUGE Premiums
     No one would ever consider buying "zero-deductible" automobile or homeowner's insurance because everyone realizes that the premiums would be prohibitively expensive.    The cost of the paperwork alone would exceed the value of most claims if people expected their auto insurance to reimburse them for every lost hubcap, flat tire, oil change, or tiny parking lot ding.    We are all able and willing to "self-insure" our car for any minor damage, and then we have our insurance to protect us should our car be severely damaged.
     Since everyone understands these fundamentals about deductibles on their auto and home insurance, it is beyond me why people are astonished that the cost of their "zero-deductible" health insurance has become astronomical.
     When shopping for health insurance plans, you should decide on the maximum amount you could possibly absorb out of your own pocket in a "bad" year; and then look for policies with that deductible.   You may be pleasantly surprised to discover how much you can save on premiums.    For instance, suppose you decide you could afford to absorb up to $1,000 in annual health expenses yourself.    You may discover that an insurance policy with a deductible of $1,000 costs you $100 less per month, a savings of $1,200 per year; so even if you had a very expensive health problem that year, you'd still be $200 ahead even after paying your $1,000 deductible.

3. Avoid HMO's Like the Plague
In a true HMO, the doctor is paid a flat amount every month ("capitation fee") for each patient assigned to him by the health plan, and he doesn't get paid a dime more if he actually sees any of these patients. Obviously, then, his goal becomes to sign up for as many patients as possible while figuring out creative ways to keep these unruly hoards of people out of his office, i.e., the less time he spends caring for each patient the more patients (capitation fees) he can collect.
Whatever you do, sign up only for a plan that pays your doctor fairly when he actually sees and treats you, but which pays him nothing when you don't need his services. Only in that way can you be sure your doctor has a strong incentive to be available to you when you need him (or her).

4. Do Not Even Consider a Health Plan That Will Not Permit You to Self-Refer to Specialists
You should avoid any health plan that will not allow you to go directly to any doctor you wish any time you wish. The worst plans typically attempt to restrict your access to specialists by throwing up as many obstacles as possible, for example, requiring that your Family Doctor's staff expend a great deal of time and effort arranging a formal "referral" with the insurance company every time your doctor wants you to see a specialist. The insurance company intents this time-consuming paperwork to serve at least two purposes: (A) it is meant to deter the doctor from recommending that you see a specialist because of the red tape involved and (B) it is meant to intimidate your Family Doctor from dropping off that bad health plan.

5. My Charges Will Never Give You "Sticker Shock"
Your least expensive choice is probably to self-insure up to the first $500-1,000 (deductible) each year and simply pay cash in my office. I've always charged affordable fees, and I always will. If the care you receive from my office is your only health expense, you'll probably never even get close to your annual deductible limit. The highest fee I'll ever charge you is for your annual Physical Exam ($300-350 including all lab and in-office tests); so even if you had no health insurance at all, you could still afford that.

6. A "Medical Savings Account" May Be Your Best Bet (If You're Eligible)
     Although the U.S. Congress passed laws to allow the establishment of "Medical Savings Accounts" several years ago, most people have never even heard of this form of health coverage because it's never been heavily marketed by insurance agents (since the premiums are lower, the insurance agent knows he's going to make a smaller commission than he will if he can sell you a more expensive conventional health insurance policy).
     Under this program a self-employed patient purchases a high-deductible health insurance policy (say $1,000-2000 per year), and he is then permitted each year to deposit into a tax-free Medical Savings Account an amount equal to 75% of the deductible for that year, i.e., $750-1,500 per year.    These tax-free funds may only be used to pay medical expenses, but any unused surplus accumulates in the account for future use and may be invested any way you wish.    If you don't use up all the money on medical expenses, it's just like having a second (tax-free) IRA growing for you.
     If you'd like to know more about Medical Savings Accounts, I suggest you begin by exploring the following links.