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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

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Rating health insurance companies

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If in doubt, please send a new question or ask for an update.

Q: I am searching for a quality insurance company for my individual coverage once my Cobra ins ends on Mar. 31. I have no major illnesses and don't anticipate needing a low deductible to cover doctors' visits. I am primarily concerned with coverage to guard against a catastrophic medical event - (sure hope I don't have one!) . I would like to know a little about the rating service your company lists - A.M. Best Ratings.

A: There are three sources of independent rating information most commonly cited by consumers who buy their own health insurance. OnlineAdviser service uses all three of the common methods plus one additional rating criteria that is more subjective but is also more discriminating. The oldest rating criteria is A.M. Best Company which assigns a letter grade rating of the financial strength of an insurance company. A good health insurer achieves a rating of B+ or better. Because of the inherent risks and instability of the health insurance business, it is almost impossible for a health insurer to achieve a rating higher than an A, so a rating of A- is considered excellent. The second source is the National Association of Insurance Commissioners at This Web site provides a great deal of raw data about consumer complaints against insurers, it is difficult to evaluate the data without having an in-depth understanding of the business, trends, procedures and meanings of the terminology in the reports. We look for companies to have improving customer complaint ratio trends over the past several years in a specific market niche. The third source is Consumer Reports magazine with its own unique rating methods. This source is easy to understand, but the publication skips most of the health insurance plans used by individuals who buy their own insurance. The magazine primarily covers health insurance plans used by larger employers. All of the health plans supported by OnlineAdviser service must pass a subjective but very strict quality criteria that basically boils down to: "Based on all the collective knowledge, experience and reports from other members, would I (the adviser) rely on this health insurance for my own family?". OnlineAdviser has the advantage of having received comments and questions from tens of thousands of individual health insurance consumers over a period of more than two decades. That personal feedback from health plan members can be far more valuable than published statistics for evaluating the quality of a health insurance company. It is fair to say that while no health insurance plans are free of faults, the ones listed at enjoy a better than average consumer reputation. Those health plans listed that do not continue to maintain this reputation are removed from the listings and OnlineAdviser support.


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