Consumer alert: Hamm warns consumers to read carefully when purchasing health insurance
Posted on 3/12/2012
BISMARCK, N.D.-North Dakota Insurance Commissioner Adam Hamm warns consumers shopping for health insurance to be on the lookout for limited benefit plans in disguise. Plans known as limited medical benefit insurance and mini-med plans may appear to provide comprehensive health insurance coverage, but often fall short when policyholders encounter injury or illness.
Limited medical benefit insurance and mini-med plans, often advertised as cheap alternatives to major medical health insurance, do not provide the same coverage as comprehensive major medical health insurance. Most limited medical benefit and mini-med plans offer a very low level of health insurance coverage. Unlike a traditional insurance policy, there is no limit to how much a consumer might have to pay for medical expenses on a mini-med plan. The plans often cap the annual dollar amount paid for medical expenses, leaving consumers responsible for the remaining costs.
"These limited benefit plans come in many varieties, so it's very important to shop carefully," Hamm said. "If you sign up for a limited benefit plan, a costly illness or injury could force you into a difficult financial situation."
Although these limited plans don't measure up to comprehensive major medical health insurance, they are often advertised as a comparable, less expensive option.
The following warning signs indicate a plan could be a limited benefit or mini-med plan:
Requires association membership
Annual limits on what the policy covers
Medical or pharmacy discount cards sold as insurance
Terms like "innovative" and "cost effective" in advertisements
No pre-existing condition exclusions
Premium offers only good for limited open enrollment period
Unsolicited calls or emails
Hamm encourages consumers to ask the agent about the benefits the plan offers. Ask the agent:
For the full name and address of the insurance company underwriting the coverage.
For his/her full name, address and National Producer Number. Be sure the agent is licensed in North Dakota and appointed by the insurance company.
For a written outline of coverage.
To explain how much of the monthly cost is actual insurance premium vs. other fees and charges.
To fully explain all insurance benefits, limits and exclusions.
Consumers are welcome to contact the Insurance Department at 1-800-247-0560 with questions or concerns.