Did you buy 'junk insurance?'

April 6, 2009 3:28:57 PM PDT
An estimated 40 million Americans have no health insurance. Many who buy their own insurance think they are covered, but actually they're not. If you purchase your own health insurance, Consumer Reports found you may not be as protected as you think.

Find yourself in an emergency room and you might find out you have 'junk insurance.' Consumer Reports finds all too many people are falling victim to hazardous health plans.

It's not until people get sick that they discover the problem. That's what happened to Gina Eaton. Her policy has such a high deductible that she says she opted not to get medical treatment after a miscarriage.

"I just kind of went to bed for about three or four days and tried not to walk around or do anything," she said. "I just stood real still and hoped that it would heal itself."

"The policies are like Swiss cheese," said Nancy Metcalf with Consumer Reports. "And the way they're written, it's really hard to spot the gaps. Even the insurance expert we hired to help us with this project had a hard time deciphering some of them."

Metcalf says the buzzword on many junk policies is 'affordable.'

"Many big-name insurance companies are offering these," she said. "They look like a good deal because the premiums are low, but they're low for a reason. They are so riddled with loopholes, limits, and exclusions that they will not come close to covering your expenses if you ever fall seriously ill."

Consumer Reports says here's how to avoid junk health insurance policies.

1) Never buy a policy labeled "limited benefit" or "not major medical insurance"
2) Don't leave out a category of care because you "never use it." You may not use it now, but you could desperately need it in six months.
3) Don't take a salesperson's word for anything. Always read the fine print, which will help you avoid low-cost coverage that comes with a high price tag.

Another problem with these low cost health care plans is that most people have no idea just how expensive major health care can be. For instance, treating cancer can reach into six figures. And that far outreaches the coverage many policies offer.

If you fear you have purchased bad insurance, you can call the Texas Department of Insurance at 1-800-252-3439 to find out more about the company.

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