The price of health insurance at work is shocking people in open enrollment this year and prompting some to look elsewhere for less-expensive coverage.

Insurance professionals sometimes suggest the strategy, especially for people seeking family coverage. Some even suggest individuals might be able to save money by insuring themselves at work and buying outside insurance for the rest of the family.

But Katherine Ewers said she would not take such a chance if she could possibly help it.

When she was unemployed in 2007, Ewers bought an individual insurance policy.

Many healthy people would have skipped it and hoped for the best, "but I was prudent and cautious," she said. Now, almost two years later, that prudence has been answered with about $40,000 in medical bills for emergency gallbladder surgery.

She said her insurer rejected the expenses, claiming she didn't tell them when she applied that she had a pre-existing condition.

"It's a risk" when people buy health insurance outside the workplace, said Amir Mostafaie, consumer health adviser for eHealthInsurance.com. But he said individuals can protect themselves if they check out the insurers in advance and are careful about providing their health records.

Ewers said that when she applied for insurance, she was well, unaware of any pre-existing conditions.

Then, after bills were submitted for her emergency surgery, the insurance company brought up something she had forgotten. A few months before she obtained the policy at issue, she had a backache and asked a nurse at the school where she worked about it. The nurse suggested ibuprofen and, after taking it, she felt fine and forgot about it.

"I was flabbergasted," when the insurance company denied coverage because she hadn't reported it, she said.

That's why many people consider coverage from an employer indispensable, regardless of cost.

For people who must save money or need to go out on their own, Mostafaie suggests the following:

- When you sign up, the insurer might ask about symptoms, rather than whether you have, say, heart disease. To protect yourself against a poor memory, he said to say you recall seeing doctors but do not remember why.

- Investigate any insurer you might consider to see whether it has a history of rescinding policies. Checking with your state's insurance regulation office also will help. Some state governments post enforcement actions or complaints on the insurance commissioner's Web site.

To link to your state, go to the National Association of Insurance Commissioners map at naic.org/state - web - map.htm. Keep in mind that though an insurance company might not have had problems in your state, it might have had issues in another.

- Be careful about the agent. Mostafaie said some are "captive," working with one company and relying on commissions from it rather than comparing companies and policies. Some companies also provide agents rewards for providing a certain volume of business.
You can compare costs and coverage at eHealthInsurance.com, which includes client comments.

- Make sure the insurance company will cover the care you need - or might need. For example, people planning to have children should make sure maternity care is covered, and women should not change coverage during a pregnancy. If you lose a job, continue maternity coverage or pre-existing conditions through extending health benefits with COBRA. The federal government helps defray the cost.

Two working spouses might also be able to reduce costs by switching to one spouse's plan or dividing the family between the two plans.

For additional information, visit kff.org/consumerguide/7350.cfm.

Gail MarksJarvis is a personal finance columnist for the Chicago Tribune and author of "Saving for Retirement Without Living Like a Pauper or Winning the Lottery." Readers may send her e-mail at gmarksjarvis@tribune.com.

(c) 2009, Chicago Tribune.

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