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Tuesday AM April 7th, 2009

A Consumer Reports investigation finds that some health insurance is so riddled with loopholes, limits and exclusions that it doesn’t adequately cover many common conditions. Ed Mayberry reports.

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The May issue of Consumer Reports examines so-called individual plans that are often used by the self-employed.  Nancy Metcalf with Consumer Reports says individual insurance has become expensive and difficult for people who have a less-than-perfect medical history.

“People have absolutely no idea how much health insurance really costs.  If they’ve been working for a company, they’ve probably been paying anywhere from 15 to 25 per cent of the true costs for years.”

Ed: “What are some of the things that you might see—the ‘red flags’?”

“Well, the biggest red flag is if it’s a policy that says right on the top of it that it’s a limited benefit policy or not major medical insurance, do not buy it.”

Metcalf says disclosure requirements about coverage gaps are weak or nonexistent, making it difficult to figure out what a policy covers until the consumer is faced with hospital bills the plan won’t pay.

“Never ever buy a policy that says — and they’re often worded this way — ‘we cover 100 per cent of hospitalizations’ — in tiny print —’up to schedule,’ which means they’ll pay $1,000 a day to be in the hospital.  We find policies that only cover hospitalization and don’t cover outpatient care.  Again, a bad idea.  Increasingly, for example, cancer care is done on an outpatient basis.”   

Metcalf says the confusion comes about because health insurance is regulated by the states, not the federal government. 

Ed Mayberry, KUHF Houston Public Radio News.

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