There are about 40 health insurance companies in the United States. When I saw the list I recognized about 10 of them. A few years ago I was researching options for prescription drugs under the new Medicare D plan. I examined the plans from several different companies (only ones that I recognized). Do they have generics? What are the prices and how do they compare? Do they have all the prescriptions that I need in their formulary? What is the structure of the plan? I developed an Excel spreadsheet to compare and contrast these plans. I worked on this for hours (days?) and in the end I still wasn’t sure I made the right decision.

But here’s the saving factor. Since I’ve been in the health care field for over 30 years I knew who the good companies were and I limited my research to three of them. The process was an exhausting one and I was fortunate to have experience in the subject matter.

In the process of preparing for the research I happened upon the following advice: “You will need to make sure that you do business with a good company so that you actually have the coverage you need in times of poor health. First, the most important thing a person can do is make sure that they fully understand what their policy consists of. To do this you will need to read everything, including that fine print. Identify the policy limits, what type of coverage and treatment qualifies, and the doctors associated with the plan. Coverage for a certain ailment will be no good if there are too many restrictions placed on how a person can receive that specific treatment.”

I’m going to be very liberal here and state that 80% (using the 80/20 rule) of the population will not read the policy. They will succumb to the marketing glitz and buy the one with the cheapest price. And then they will say “I’m covered”. Covered for what? They don’t have the slightest idea what they’re covered for, or more importantly, what they’re not covered for. They usually find out too late what that is.

The majority of Americans don’t know what they’re buying when they buy health insurance. It’s too complicated and there are too many companies. We need to standardize the plans and make what is covered and not covered ultra transparent. We need to treat health insurance as a commodity and let the companies compete on service and price.

There have been too many horror stories about bad plans from bad companies. If we standardize the plans and make them transparent many of the companies presently selling bad plans at a cheap price won’t be able to compete. Then the 80% mentioned above will have an excellent chance at truly “being covered”.

Categories: Tom Gledhill


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