Physician Malpractice Insurance Rates

Physician Malpractice Insurance Rates

Physician Malpractice Insurance Rates

Buying health insurance ranks up there with buying a house as one of the most important financial decisions you will ever make in your life. The wrong choice can bankrupt you. There are a lot of shady people marketing what might seem like insurance policies but that are actually discount plans rather than major medical coverage. Even if the plan offers major medical coverage, buying a policy from a company not licensed to do business in your state can ruin your dreams of college for your children and a secure retirement if that company goes out of business.

To protect yourself while buying insurance, take the following steps:

  1. Verify that the company you are considering is licensed to do business in your state by contacting the government agency that regulates insurance companies. Different states give different names to these agencies but if you type the words "insurance regulation" and the name of your state into a search engine, you should get results. Often, they will be able to tell you if there have been significant legal issues with this company, too.
  2. Check on the ratings of the company or companies you are considering. Several organizations rate the financial stability, how the company is managed, and its history. These organizations include A.M. Best Company, Standard & Poor’s, Weiss Ratings Inc., Moody’s Investors Service and Duff & Phelps. Many of the rankings are available online. If not, the information should be in the local library.
  3. If you have a regular physician, ask to speak to the person in the office who handles insurance billing and ask for her opinion about the various insurance companies. Because she deals with them every day for a living, she will have a good idea about which companies pay promptly and which don't. (Thanks to Barbara McDonald, a woman who ran her own insurance agency for decades, for this piece of advice.) An all-too-common problem with many insurance companies is that they don't pay well and your doctor, who becomes understandably frustrated with not getting paid, stops accepting that insurance. You then have the choice of leaving a good doctor that you like or paying out of pocket. Talking to the person who handles your doctor's insurance billing reduces the odds of that happening.
  4. Working with an agent is often helpful. Check with the state agency regulating insurance to find out if the agent is licensed to do business in your state. Also ask for recommendations from friends.
  5. Remember that good insurance policies are not cheap.
  6. Determine the amount of risk you can bear and buy enough insurance to cover the risk you can't bear. For example, if you are young, healthy, and have a good job, you may be able to accept a $5000 deductible. In that case, it might make sense to choose a high-deductible insurance policy and pay lower premiums. Of course, if you break your foot one year, you will regret having such a high deductible but, over time, the choice may work in your favor.
  7. Don't just look at the premiums. Look at the total out-of-pocket costs. Many, but not all, health insurance policies will have a maximum yearly amount that you are responsible for. After that, the company steps in to cover everything. This cap is different from the deductible. For example, suppose you have a $5,000 deductible. After the deductible is met, the company may pay 80% of everything below $20,000, but after you have incurred $20,000 in expenses, the company may cover everything more than that.
  8. Read the details of the policy. A good analogy is learning how to use a new appliance. No matter how good it is, it is useless if you don't know how it works. It is the same with insurance policies. Knowing your benefits will help you make more informed medical choices.