Ever increasing numbers of
people are buying individual health insurance for the first time. Whether you
are a recent college grad who has not yet found that first paying job, you are
temporarily between jobs, your employer is cutting back on benefits, or you
find yourself without health care coverage for any reason, getting coverage for
you and your family does not have to be a difficult or prolonged process.
Here are the top
ten steps to take to ensure that you get the plan that suits both your budget
and health care needs.
Learning
the language of health insurance
Just about every
health insurance policy comprises a few basic components. In order to make an
informed decision, you need to make sure you know the definitions of these
terms:
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Premiums
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A monthly payment you make to the insurance company in
exchange for medical coverage. Ex) If under group health insurance coverage,
the premium is paid in whole or partially by the employer on behalf of the
employee or the employee’s dependants.
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Co-pay
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A fixed fee paid by the policyholder for office visits,
emergency room visits and prescriptions due at the time of service. Ex) Your
health insurance plan requires a $15 co-pay for an office visit or brand-name
prescription drug, after which the insurance company often pays the remainder
of the charges. Instantly browse different plan options and Health Insurance Quotes, to learn more.
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Deductibles
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An amount of money that you are required to spend on your
own medical expenses before the insurer coverage begins. Note, monthly
premiums and co-pays typically don’t count towards your deductible. Ex)
Choosing a plan with a higher deductible can keep your monthly premiums lower.
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Co-insurance
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A percentage of medical expenses for which the insured is
responsible up to his or her out-of-pocket maximum. Ex) If your
insurance benefits cover 80% of x-ray charges, you would need to pay the remaining
20% (co-insurance), even if your yearly deductible has already been met.
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Out-of-Pocket Max
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AKA a stop-loss limit, this is the maximum amount of money
the insured will pay before the insurance company begins paying 100% of
expenses. Ex) If annual OOPM is met through payment of deductibles, co-pays,
and co-insurance, the insurance carrier will pay the remaining costs for that
year.
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Lifetime Max
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This is the maximum amount an insurance company will spend
on a patient in his or her lifetime. Ex) This term might be in the fine print
of the plan you’re considering, but make sure the plan’s lifetime max is at
least 2 million dollars.
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Health Saving Accounts
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To take more control over your own medical spending, you
can set up a Health Savings Account (HSA) in which you can invest pretax
income. As long as you use the money for health care expenses it will
not be taxed. These accounts are accompanied by high-deductible health
insurance plans, which ensure that you are covered for medical expenses that
exceed the money in your account.Ex) View a comprehensive Commen Sense Guide to Health Savings Accounts
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Evaluate your situation
Knowing your
priorities will help you narrow down your choices and weigh the pros and cons
of each plan. Here are some questions you should answer before you begin
shopping for a policy:
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What
monthly premium can I afford?
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Do
I want coverage for preventive care or just in case of a major illness or
accident?
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Who
has the largest or most convenient provider network for my lifestyle?
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Do
I want greater control over my medical resources?
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Am
I planning on having a child in the future?
Take advantage of free expert advice
There
are literally hundreds if not thousands of health plans from which to
choose. When you have assessed your needs, you can benefit from the help
of a health care exchange, either through online tools or a telephone
conversation. A health care exchange can quickly filter your information and
present you with a few alternatives that match your personal
requirements. Services such as GetInsured specialize
in individual insurance and are staffed by experts. They will help guide
you through the process from selecting an ideal plan to completing your
application and receiving your policy. And, because this service is free,
there is no reason to not take advantage of this unparalleled opportunity.
Honesty
is the best policy
Some people are
afraid that if they tell the truth on a health insurance application they will
be rejected. Yes, given the current laws, there is a chance that if you
have a pre-existing condition you may be turned away. However, if you lie
about such a condition, the insurance company will certainly find out can
legally cancel your policy. It is in your interest to be honest.
Even if you have a pre-existing condition you might be eligible for some amount
of catastrophic coverage. Talk honestly and confidentially with a health
insurance agent—you may be surprised by what you learn.
Buy
health insurance separately when needed
Just
because one member of a family has a pre-existing condition, doesn’t mean that
the whole family can’t be covered. The family can be covered by separate
plans. For those who are not ill, purchase an affordable, comprehensive
plan. The person who is more difficult to cover still has options.
If you can afford it, there are guaranteed issue plans. Others may choose
to be covered in the case of an accident. And still others may choose to
participate in non-insurance discount programs. Of course, combinations
of these approaches are possible too—check out our explanation of the basics of family health insurance for more information.
Only
consider plans that cover your preferred doctor and hospitals
Even if a plan
boasts an enormous provider network, take the time to check that your favorite
doctor is included. If not, you may find out too late and be forced to
make the choice between paying substantial out-of-network fees and choosing a
new doctor. The same is true of hospitals. Make sure that the
hospitals that are included in a prospective plan’s network are not only
reputed to be high quality, but also conveniently located.
Make
a side by side comparison
Once
you have narrowed down your choices, line up the final contenders and write
down the premiums, in-network deductible, co-pays for office visits, AM Best
ratings (a measure of the underwriter’s ability to pay claims), co-insurance
and any other attributes that are important to you. A simpler way is to
use GetInsured,
which automatically generates a side-by-side comparison of your best options.
Just like when buying a car, a side-by-side comparison of price and features
can be an invaluable step in evaluating health care plans.
Get
short term coverage if necessary – no lapse in coverage
The
most important principle in health care insurance is to never be without
it. If you are a recent college grad, or you’re between jobs, you may be
tempted to avoid the hassle and expense of securing temporary coverage. After
all, as soon as you get that job, you’ll be eligible for an employer-sponsored
plan. This is a dangerous gamble; if you get sick or have an
accident while not covered, the results could be financially devastating.
If the job doesn’t come through, you could be without health coverage for
longer than you planned. Short-term coverage is available for as few as
30-days and as much as a year. This varies by state. Premiums and
deductibles can be set to match your needs, and applications can be approved
very quickly. Don’t allow yourself to be at risk for even one day—learn
how you can find affordable short-term coverage here.
Don’t
wait…
Just as you should
not wait until your next job or other major life transition to provide you with
health care benefits, do not wait for government-driven health care
reform. A mandate for universal coverage, government subsidies and other
changes may benefit you directly, but these changes are still years away from
being implemented. Illness or a medical emergency can sneak up on us at
any time and being without coverage is dangerous both medically and
financially. Affordable major medical plans are available and invaluable.
…But take your time
After
all, an insurance policy is a financial agreement that should not be made
hastily or under duress. Yes, you should try to get insured right away, but
once you have selected a plan and completed your application, go back and
review the details carefully. Make sure that you understand your
responsibility as well as your benefits, and that the terms suit you. By
law there is a 10-day rescission period during which you can change your mind
about a plan without any repercussions. GetInsurance goes
further by encouraging its customers to take advantage of its 30-day ‘free
look’ policy from the time an application is submitted. Use this time to
make sure that you are comfortable with your new plan. After all, what is
the purpose of insurance, if not to provide you with peace of mind?