Many South Carolinians are underinsured
Tips for buying health insurance
1. Call the S.C. Department of Insurance at 1-800-768-3467 to find out whether the agent and company are licensed.
2. Learn what kinds of policies will provide what you need. Shop around and ask a lot of questions.
3. Answer the application questions completely and accurately.
4. Make sure that the word "insurance" is used and that there is no disclaimer stating, "This product is not insurance, nor is it intended to replace insurance."
5. Make check payable to the company, not the agent. Always pay by check or money order and write your policy number on the payment.
6. Do not give the agent your bank account number until you have verified the agent and company.
7. Ask for a receipt for all payments. The receipt should include your policy number, date of payment and the name of the insurance company.
8. Fraudulent plans often are sold through direct mail or over the Internet.
9. If a policy costs far less than what other companies are charging, this could be a warning sign.
10. Beware of an agent or company that states this is a "one-time deal" or your "last chance for special savings," or boasts that the coverage is available to anyone.
About 400,000 South Carolinians lack adequate health insurance. That's nearly 10 percent of the population living one accident or major illness away from financial hardship.
Lyn Mettler is self-employed and owns a public relations company in Mount Pleasant. Responsible for shopping for her family's insurance, she's been through three plans in six years.
"I have not done a good job of reading all the fine print and picking the right plan for my family," Mettler said.
Before her current Blue Cross Blue Shield plan, she bought insurance from Mid-West National Life Insurance Co. of Tennessee. The agent told her that her children's well and sick visits were covered, she said, but in reality, only $100 per child per year for wellness care was covered.
"Not much help when you have a baby who has to go in for well visits every couple of months," she said.
Mid-West National Life is a subsidiary of HealthMarkets, which agreed July 21 to pay $20 million to settle with 36 state regulators, including South Carolina, regarding complaints of sales agents not fully disclosing policy limits and the timeliness of paying claims.
HealthMarkets said that the company has made changes since 2005, including calling new policyholders to verify they understand their benefits.
The number of underinsured in the U.S. rose 60 percent from 2003 to 2007, the Commonwealth Fund reported in June. The fund is a private health policy reform foundation. An estimated 14 percent of all nonelderly adults were underinsured in 2007.
The fund defined an underinsured person as one who spends 10 percent or more of their income on out-of-pocket medical expenses, or has a deductible that equaled 5 percent or more of their income.
Extrapolating the fund's data would mean that about 400,000 South Carolinians lack full coverage, said Lynn Bailey, a Columbia-based health care consultant.
"The underinsured are folks who make the decision to have a bare-bones policy or do a high-deductible plan without the accompanying health savings account," Bailey said. "People think they have health insurance, but they really don't. You're really no worse off to be uninsured."
The National Transplant Assistance Fund & Catastrophic Injury Program is a nonprofit that assists families in raising funds through online campaigns that accept tax-free donations.
"People just don't know how close they live to the edge," Executive Director Lynne C. Samson said. Hundreds of Web pages describe people who have catastrophic health issues and cannot pay their bills.
In the past four years, the program has seen a 50 percent increase in people seeking funds, Samson said. Nearly 360 patients from South Carolina have contacted the national nonprofit, and 77 launched fundraising campaigns.
Steve Skardon Jr., executive director of the Palmetto Project, a nonprofit that has spawned a number of social initiatives, said, "Underinsured means you're not protected from emergencies and catastrophic illnesses." And for day-to-day care, when gaps arise in coverage, people suffer when they lack having a provider who treats them consistently.
The S.C. Healthcare Information and Referral Network, a Palmetto Project program, is a database for patients to find providers who deliver care for reduced fees or on sliding scales, Skardon said.
This year, the South Carolina Legislature considered a number of proposals intended to expand health insurance coverage to more residents. Two of the three high-profile attempts failed, including an effort to use an increase in the cigarette tax to offset the cost of providing more people with Medicaid.
Another bill would have allowed young adults to stay on their parents' insurance plans longer. The bill cleared the Senate but died in the House.
The third bill became law. It allows small-business owners to join together in groups to buy health care coverage for their workers.
Ultimately, Mettler decided to treat her health insurance like her taxes and get professional help. Health insurance broker Reese McFaddin, who is based on Daniel Island, helped Mettler craft a plan for her and her husband and to create separate, more inclusive coverage for their children.
"A lot of people get roped into a fly-by-night policy that is cheap but has certain limitations on hospitalization," said McFaddin, who sells plans from six companies. "You may have a $1,000 deductible, but insurance only pays up to $25,000."
She tries to educate her clients on what and when they can expect to pay. Even with comprehensive plans, people can get sticker shock.
"Folks don't really understand," she said.
Yvonne Wenger contributed to this report. Reach Jill Coley at 937-5719 or jcoley@postandcourier.com.
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