Explaining Medical Costs and Policies to Insureds

Your clients buy health insurance to reduce their out‑of‑pocket healthcare costs, while improving their access to quality care. But no policy covers everything, and it’s helpful to set realistic expectations.

In other words, in order to best serve your clients, give them more than a policy. Give them strategies for getting the most from their coverage. Give them guidance for managing healthcare costs that aren’t covered under their policy.

Going the extra mile doesn’t need to substantially change your sales conversations. It can be as simple as weaving some of the following talking points into your discussions.

Most clients will appreciate your candor, while benefiting from your sound advice.

Explain Why Healthcare Costs Are Rising

Chances are, your clients know that medical costs—and insurance premiums—keep climbing. But they may not know exactly why. Enlighten them. Feel free to draw from PALIG’s recent study of rising healthcare costs in our key markets.

One reason is ever‑present medical inflation. Not only does this grow at a faster rate than overall inflation, it’s accelerated by the development of promising—but expensive—medical advances.

Another reason: increased healthcare utilization. According to PALIG claims data, a growing number of insureds are now receiving treatment for chronic conditions. More are taking prescription drugs. And still more are seeking help for mental illness.

Increased healthcare usage is a good thing. So are medical breakthroughs. But these factors do contribute to rising healthcare costs—something every healthcare consumer should know.

3 Cost‑Saving Strategies to Share with Clients

When you’re presenting health insurance to your clients, you’re undoubtedly explaining the coverage to them. That’s helpful, since the better consumers understand their benefits, the more cost‑effectively they’ll use it.

But when it comes to managing healthcare costs, certain aspects deserve more attention:

Routine vs. Emergency Care: As you know, emergency care visits are one of the more expensive forms of healthcare. Unfortunately, ER visits are trending upwards—and too often, patients are using them for non‑emergencies, such as colds and flu. That’s why it’s a good practice to encourage clients to seek routine care from their physicians instead—or if necessary, at urgent care centers. It helps keep costs down, while ensuring patients receive appropriate care.
: Not everyone really understands what a medical provider network is, so it’s helpful to explain the concept. Confirm that clients know where to find their list of local in‑network providers—and highlight the difference between in‑network and out‑of‑network healthcare costs.
Preventive Care Benefits: Many PALIG health plans include valuable preventive care benefits, such as annual physicals, screenings and vaccines. These are worth emphasizing, because not only are these cost‑effective, they help insureds maintain better health. After all, catching potential medical problems early is a win/win for everyone.

Help Clients Create a Healthcare Budget

Another valuable service you can offer your clients is to help them create a family healthcare budget—i.e., estimating expenses not covered by insurance and planning how to fund them. Healthcare budgeting includes these three steps:

Review Health Insurance Costs and Coverages: Help clients tally their known insurance costs (i.e., premiums, deductibles, etc.), anticipated out‑of‑pocket costs (i.e., coinsurance, copays, etc.) and, of course, their out‑of‑pocket maximum. Insureds should have a good handle on what is and isn’t covered under their plan.
Estimate Annual Medical Costs: Typically, the best way of estimating expenses is to look at past medical expenses. In addition to reviewing medical bills from prior years, clients should:
1. Estimate upcoming costs for routine care (checkups, dental, vision, etc. that isn’t covered by insurance
2. Factor in existing health conditions, estimating ongoing treatments and maintenance medications
3. Ballparking some extra funds for unexpected medical expenses. While this isn’t an exact science, looking at the family’s past history and general health profile will help.
Build a Funding Plan: Once your clients have a sense of what their out‑of‑pocket healthcare costs are likely to be, they can determine how to fund it. It may mean creating an emergency fund—or, if they have permanent life insurance, for this purpose. (This might lead to a conversation on the —always a valuable conversation to have.) In summary, helping your clients obtain health insurance is a great service. But helping them learn how to use it wisely is even better.

Looking for a resource you can share with your clients? Consider directing them

And for more information about health plans available in your area,