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Eric2000 said:IT'S A nice-sounding idea: Ban health insurance that lacks comprehensive coverage. Defined-benefit plans, one activist says, should "never hit the market" ("Low-cost insurer leaves some with bills and a bitter taste," Business, Oct. 31).
That's like requiring everybody to drive a Lexus. Trouble is, not everyone can afford Lexus-style health insurance. More than 1 million insurance customers choose HealthMarkets companies because we offer value, flexibility, and affordable rates.
The fundamental problem is that when I was with NASE, we were trained to leave the clients with the impression that this coverage was more than adequate for most situations (and were new to the business and actually believed it). In the spring of 1998, we were told that room & board charges were about $180 per day, total maternity charges were often around $3500 (I think that one was addressed a few posts ago), and that miscellaneous expenses are usually the smallest portion of a hospital bill. It's amazing how blind I was. I don't know why I didn't say "Hey, why not just charge a little more and take away the limitations, so they're not even an issue?" Well, MEGA had it's reasons.
Aside for clients believing that they had far better coverage than they did, most would never realize just how much out-of-pocket liability they have until it's too late. Take the maternity example. MEGA paid $4100 and the client was left with $24,000. Know where managers that teach rookie salesman to say maternity is around $3500 should be? In prison.
Here is how MEGA makes its profits. They walk-in with a five-year old Kia, look at your Lexus, and convince you that you're paying too much and that you can actually get better quality by buying the Kia. And, as John mentioned, in some cases they'll actually charge more for the junked Kia. It sounds laughable that anybody would do such things, as nobody would ditch the Lexus for a used Kia...but the prospect doesn't know any better.
We work to ensure our customers fully understand the products they buy. We contact every new customer who purchases a defined-benefit policy to review selections. We have made approximately 160,000 benefit confirmation calls since 2005.
Things weren't that way when I was with them.
Because of the high cost of comprehensive insurance, many people face the difficult choice between limited coverage and no coverage at all.
Only a colossal dumbass would replace a major medical policy with a policy that might not pay 1/4 of the bill at times, to save let's say 25% on their premium. Again, the scheme works because the public doesn't know any better.