Are You Underinsured?

Twenty-five million Americans pay for health insurance but have inadequate coverage. There’s no magic formula for figuring out how much coverage is enough, but here are a few pitfalls to avoid:

•High deductibles. A 2007 Commonwealth Fund report found that 25% of the underinsured pay annual deductibles of $1,000 or more, a red flag for scant coverage.

•Caps or omission of services. Read your plan to check for limits on drug coverage or per-day hospital fees, which may leave you with bulging health-care bills.

•Temporary or short-term policies. Buying into these plans may disqualify you from comprehensive long-term coverage later, especially if you have a pre-existing condition.

•Serial short-term policies. Each successive policy you purchase treats you as a new beneficiary, so changes in your health may later be considered a pre-existing condition.