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Life and Health


By May 1, 2012No Comments

While shopping for Health insurance, consumers everywhere should beware of disguised benefit plans. They are often called limited medical benefits or mini-med plans. Although they appear to offer comprehensive coverage, these plans actually might provide very inadequate compensation in the event of illness or injury.

The benefits provided by these plans are not nearly the same as major medical insurance or comprehensive health coverage. Mini-med plans and limited medical benefit insurance policies are usually advertised as inexpensive alternatives to major medical plans. The level of coverage offered by both options can be very low. With major medical plans, there are limits placed on how much a consumer must pay for specific treatments or incidents. However, there are no limits with mini-med plans. In addition to this, there is a cap amount allowed each year. Plan members are responsible for any expenses incurred beyond that amount.

Since health plans with limited benefits come in many forms, consumers must be careful while comparing options. If an individual signs for one of these plans experiences a major illness or injury, inadequate benefits can put that consumer in a difficult financial situation. While the benefits of these plans are not comparable to comprehensive coverage, they are often advertised as such. The following are signs of a limited plan or mini-med plan:

  • There are annual limits for what the policy covers.
  • The plans require association memberships.
  • They are often described as innovative or cost effective.
  • The premium offers are only available during the period of open enrollment.
  • There are no pre-existing condition exclusions.
  • Pharmacy and medical discount cards are often sold as insurance.
  • The companies usually make unsolicited calls or send frequent emails.

When shopping for Medical insurance, consumers should always ask questions. It is important to know exactly what a plan offers before agreeing to the terms. To avoid the costly effects of signing up for an inadequate plan, be sure to ask an agent for the following information:

  • A detailed explanation of all benefits, exclusions and limits.
  • The full address and name of the insurance company’s underwriter.
  • A detailed outline of coverage provisions.
  • The agent’s full name, address and National Producer Number. Agents should be licensed in the states they operate in.
  • An explanation of what percentage of the monthly payment goes toward the premium and how much goes toward other fees.