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7 ways to avoid "going naked" on health insurance

The headlines are scary. One American in six has no health insurance, and the numbers are rising.

Employers are dropping or reducing coverage for workers and their families, laid-off workers can't afford to continue paying premiums and young people go without any cover at all.

But the absence of a fully paid employer health plan does not mean you can't protect yourself against financial disaster if poor health strikes you.

The first lesson: Do not try to save by having no coverage at all, a condition called "going bare" or "going naked." A staggering 44 million Americans are in that situation -- uninsured and risking their health, their savings and even their lives.

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Going naked: A bad idea
Most of those forced to "go bare" are early retirees, the self-employed, workers in small companies that offer few or no benefits and people with pre-existing conditions that can't get affordable coverage.

Some people reason that "going bare" isn't such a bad idea because you save all those premiums. But it's really bad medicine.

"Going bare is cost effective only if you can guarantee you'll never, ever get sick," says Gerry Goldsholle, former CEO of MetLife Marketing Co., and the founder and CEO of FreeAdvice, an Internet consultancy for consumers.

"People ask why they should bother to carry insurance, and the answer is simple: If through your whole life, you never get sick, if you never need to see a doctor, you don't need insurance.

"The fact is, nobody can guarantee they won't one day face a huge medical bill.

"My first wife didn't need a doctor except for her routine, annual checkups -- until she got terminal pancreatic cancer. In her final months, we ran up $50,000 in medical bills."

There are ways to protect yourself from crippling health care bills, but your first option should be to get some insurance -- the best coverage you can afford.

1. Get a job -- any job
Start with your employer. If you're unemployed, find a job that provides benefits -- even if it's part time. Studies show that more than 54 percent of women aged 55-64 are working full or part-time jobs because they're nearing retirement without savings or insurance; they even work at minimum-pay jobs for health benefits.

Caution: Part-time jobs that offer benefits are not always easy to find, and you have to make sure they don't interfere with your primary income.

2. Select from a cafeteria menu
If you already have a job, but it doesn't provide full benefits, find out if a lesser plan is available. Many employers negotiate basic corporate "cafeteria" plans that let you pick your own level of coverage from a menu of choices and allow you to decide just how to allocate the fixed amount of employer-paid benefit dollars.

You can opt for coverage ranging from "first dollar," meaning the plan kicks in at the first dollar of expenses and you pay out nothing out of pocket when you're sick, to having a high deductible and a high co-payment. Your employer's cost is fixed, so what you choose off the menu establishes what you pay. The bigger the premium you pay out each month, the better the coverage you get and the lower your deductible and co-pay amount.

3. Get coverage through associations
Try to get into some kind of group coverage. A trade, fraternal or professional association -- AARP, AAA, your alumni association or the local chamber of commerce -- may offer lower-cost health plans. Check with groups you're involved with or join one to take advantage of its access. Your state insurance department can help you find a plan. But be cautious -- some of these so-called associations are nothing more than scams.

The reason this can work: Doctors deeply discount their fees when they deal with a group rather than with an individual. The group hires the doctor by the year, not by the service, and costs are spread across the whole group, not carried by one individual. And, with a group policy, no underwriter checks for pre-existing conditions.


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-- Posted: Jan. 12, 2004
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See Also
Getting health insurance on your own
How to shop for an individual health plan
Worksheet for comparing health plans
Insurance glossary
More insurance stories

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