Understanding how insurance companies can limit your coverage

Health insurance is an important aspect of decreasing the cost of everything from surgeries to routine check-ups, but Americans who do not pay attention to the fine print in their plans may find themselves paying more, or with less health care alternatives, than had they taken the time to review their options or taken the advice of a professional.

Most people who have a health insurance plan, or have had coverage in the past, understand what premiums are. That is the cost that either you, or your employer, pays in order to maintain your health insurance coverage.

That number is the first number you may see, but there are many variables that can also influence what coverage you have and what providers you can see.

For those who have obtained a car insurance policy, deductibles are also familiar. You agree to pay up to a certain amount, and then the insurance agency covers the rest. What may not be immediately apparent is that those deductibles could be different between in-network and out-of-network providers, and the deductibles may change depending on whether you are visiting your family physician or in the hospital for treatment.

One issue in choosing health insurance that doesn't have an analogue in auto insurance is the idea of a pre-existing condition.

As a recent report in the Miami Herald highlighted, internal guidelines of insurance companies may lead to the exclusion of coverage for conditions that an individual may already be receiving treatment for, such as Parkinson's disease, HIV and AIDS as well as more common ailments such as diabetes and hepatitis C.

You may be able to avoid the exclusion of coverage by maintaining health insurance. If you take a new job, and there's a small gap of less than 61 days, that's alright. But insurers may require up to a 12-month period, and you will want to use your previous insurer's time covering you to complete that time requirement. If you don't have that 12-month credit by having health insurance with another provider, expect to wait up to 18 months before your current plan will start covering your medical expenses.

Although many health insurance carriers have articulated that they would be in favor of eliminating restricting coverage based on pre-existing conditions, they told Congress they would only do so if every American was required to have coverage. Ironing those terms out, along with other aspects of the new administration's health care reform initiatives, may take several months at the earliest.

For the more than 45 million Americans who were living without health insurance coverage in 2007 because they've lost their jobs or can't afford to buy it themselves, according to a Census Bureau report, a gap in coverage can be costly.

Gaps in coverage, either by choice or financial necessity, can cause major problems because insurance companies only offer a 61-day window to enroll in a new plan before a company will start looking at a patient's medical history for "pre-existing conditions."

If you have ongoing treatment for things like chiropractic care, therapy, pregnancy or other conditions, the company will not cover those conditions for up to a year if you let that 61-day window expire. It may offer coverage at a higher fee, or you may have to pay for the entire cost out of pocket, in what's known as a rider.

One option that may help you to avoid that is to consider COBRA coverage, if you were previously insured. That will allow you to maintain a plan you enrolled in, but keep in mind that if your employer paid for part of your insurance, the bill could be five times what you saw while you were employed.

Another option to consider is looking for an individual health insurance policy. While the deductibles and premiums are less expensive, potentially a fraction of your monthly COBRA bill, you may not get all of the services that your previous plan offered.

The best solution to ensure that you or your family isn't buried by high healthcare costs is to carefully review the plan you're considering purchasing. Learning the jargon used can help you make an informed decision and ensure that you select the right health insurance plan for your needs and conditions.