"Hazardous" Health Insurance

(CBS)  As the number of unemployed Americans grows still higher, many are now choosing individual-based plans to replace the company-provided health insurance that they've lost. But a new study by Consumer Reports finds many of these plans have major coverage gaps, and could be hazardous to your health.

Early Show co-anchor Harry Smith sat down with medical correspondent Dr. Jennifer Ashton to navigate this uncertain territory.

Ashton says that this is a growing problem, because even if a company offers an individual the option to continue their former benefits through COBRA, that soon runs out and he or she will still need to find their own insurance, which can be difficult to do.

"It's expensive and the details are not easy to understand," Ashton said. "I would argue that this is actually relevant even for the people who still are employed because most people just do not understand what their health coverage entails. So this really is a very broad scope problem."

One of the pitfalls the Consumer Reports story talked about was spending limits on vital care. Ashton suggests making sure that your health plan covers everything including diagnostics, imaging tests, in-patient and outpatient care and rehabilitation. But you have to make sure to check all the details - sometimes, she says, an insurance provider will say it will cover in-patient care to the maximum amount, but for everything else you'd be on your own.

Another thing the report advised looking out for was the amount of out-of-pocket expenses. Most plans have a set amount of costs you must pay out-of-pocket, which is usually a couple of thousand dollars. Only after that minimum is met will the insurance provider cover or reimburse you for additional costs at 100 percent. But Ashton warns that all plans don't consider the same out-of-pocket expenses to be equivalent.

"For example, co-pays or prescription medication might not be considered out-of-pocket, but you're still paying for them," she tells Smith. "So you have to check that."

Ashton also advises watching out for insurance premiums that seem too good to be true.

"There's no such thing as a free lunch here, and with insurance premiums you truly get what you pay for," she said. "So if you get a deal that sounds too good to be true it's probably going to be very slim on the benefits."

Finally, people should watch out for what Smith calls the "random gotchas," such as an insurance company covering a second day in a hospital but not the first, something a patient might not realize until it's too late.

Ashton stresses that despite the difficult time these Americans are going through, they need to be thorough when choosing a health plan for them and their families.

"You have to look at the fine print," she said. "It's a contract, and it's very important."

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Visit the Consumer Reports Health Web site