FOR IMMEDIATE RELEASE 
January 28, 2010
Contact: Jason Moon 517-335-1700

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LANSING – The Office of Financial and Insurance Regulation (OFIR) today offered tips to Michigan consumers who are living without health insurance and are considering purchasing a limited benefit health plan. Limited benefit plans are bare bones policies that cover specific expenses and have many more limitations than a comprehensive medical plan.

“It’s important for Michigan consumers to educate themselves and know the facts before purchasing a limited benefit health plan,” OFIR Commissioner Ken Ross said.

OFIR offers the following information to consumers to help them evaluate whether limited benefit health plans can provide the health insurance protection they and their family needs.

Limited Benefit Health Insurance Plans

Limited benefit health plans are insurance products with reduced benefits intended to supplement comprehensive health insurance plans, not to be an alternative to them. You may have seen these types of plans marketed as Cancer Only, Specific Disease, Hospital Cash or Indemnity plans.

Limited benefit health insurance plans are not typically required to provide the same level of coverage, so they cover fewer types of medical expenses than a comprehensive policy.
 
These plans also have higher co-insurance percentages, co-payments and deductibles than comprehensive plans.

This means a limited benefit plan will limit the amount of coverage the company will pay per episode of illness, sometimes as low as $1,500 to $5,000 (not counting co-insurance and deductibles paid out-of-pocket by you). These policies also provide limited surgical, preventative care, testing and emergency benefits. And with low maximum benefit limits called “caps,” it may be possible for you to reach your cap quickly, leaving you responsible for the balance of the bill.

What to Consider With a Limited Benefit Health Insurance Plan

Limited benefit health insurance plans are not replacements for comprehensive health insurance coverage. If you lost coverage under a comprehensive plan and are considering a limited benefit plan, there are several things you should have in mind when reviewing the coverages offered by a plan:

• Consider the current or future medical needs you or your family may have.
• Decide which medical expenses you may need covered by a limited benefit policy and which you can pay for out-of-pocket.
• If you are considering a limited benefit health plan instead of continuing existing benefits under Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) or purchasing an individual policy, figure out if the premium savings will offset the high out-of-pocket expense for medical services not covered by the limited benefit plan.

To get the most of your health care coverage, visit OFIR’s health plans resource page at http://www.michigan.gov/dleg/0,1607,7-154-10555_12902_35510---,00.html or call 877-999-6442

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