Before making any decisions about paying for your loved one’s care, make sure you understand his or her insurance coverage, and any other benefits that he or she may be entitled to.

Review Your Loved One’s Insurance Coverage And Other Benefits.

A disability insurance policy may cover more than just wages; it also could pay for physical therapy or other services. Similarly, a life insurance policy might have cash value or—in dire situations—an option to receive an advance payment of some of the policy’s death benefit. You should also examine your loved one’s rights and benefits under Social Security, Medicare, Medicaid, private insurance, and other employee benefits. One excellent source for help is the bookkeeper at your loved one’s doctor’s office. He or she should know the insurance companies and rules, and can spot mistakes your loved one may be making.

Group Insurance

Like many Americans, your loved one may be covered by a group insurance policy offered by his or her employer. Group policies are generally the least expensive type of private health insurance, and the employer usually pays part of the cost. Some employers offer only one health insurance plan, while others offer a choice of plans: a fee-for-service plan, a health maintenance organization (HMO), or a preferred provider organization (PPO), for example.

If your loved one is no longer employed, or if his or her employer doesn’t offer health insurance, your loved one might be able to get group insurance through membership in a labor union, professional association, alumni association, club, or other organization. Many organizations offer health insurance plans to members.

Individual Insurance

If your loved one cannot obtain a group policy, you may have to consider individual insurance. Compare your loved one’s options and shop carefully because coverage and costs vary from company to company. Individual plans may not offer benefits as broad as those in group plans.

If your loved one gets a noncancellable policy (also called a guaranteed renewable policy), then he or she will receive individual insurance under that policy as long as he or she keeps paying the monthly premium. The insurance company can raise the cost, but cannot cancel coverage. Many companies now offer a conditionally renewable policy. This means that the insurance company can cancel all policies that are like your loved one’s, but not only your loved one’s. This protects your loved one from being singled out, but it doesn’t protect him or her from losing coverage.

Before your loved one buys any health insurance policy, make sure he or she knows what it will pay for and what it won’t. To find out about individual health insurance plans, call insurance companies, HMOs, and PPOs in your community, or speak to the agent who handles your loved one’s car or homeowner’s insurance.

Tips When Shopping For Individual Insurance:

• Shop carefully. Policies differ widely in coverage and cost. Your loved one will want to contact different insurance companies, or ask his or agent to provide policies from several insurers for comparison.
• Make sure the policy protects your loved one from large medical costs.
• Make sure the policy provides the kind of coverage that’s right for your loved one. He or she doesn’t want unpleasant surprises if he or she becomes ill or has to go to the hospital.
• Check to see that the policy clearly states the date that coverage will begin (some require a waiting period) and what procedures are excluded from coverage.
• Make sure that the policy has a “free look” clause. Most companies give at least 10 days to review a policy. If your loved one changes his or her mind, he or she can cancel the policy and have the premium refunded.
• Beware of single-disease insurance policies. Some polices offer protection for only one disease, such as cancer. If your loved one already has health insurance, his or her regular plan probably provides the necessary coverage. It is wise to check existing policies before buying more insurance.

Managed Care

Almost all plans have some sort of managed care program to help control costs. For example, if your loved one needs to go to the hospital, one form of managed care requires that he or she receive approval from the insurance company before being admitted. If your loved one goes to the hospital without approval, he or she may not be covered for the hospital bill.

If you have any doubts about your loved one’s insurance coverage, try to get a second opinion from a financial planner or an insurance agent you trust.

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Adapted from Checkup on Health Insurance Choices developed by the Agency for Health Care Policy and Research.