Health
Insurance
Things
You Need to Know Before Buying…
We recently received a question from someone looking for guidance on how to choose a health insurance plan. Whether you’re selecting a plan at work, or purchasing one on your own, wading through health insurance plans can be quite intimidating since the terminology is often unfamiliar, confusing, and the stakes are high. After all, few things are as important to us as health care when we really need it. Without health insurance, you might not have access to many non-emergency services, an emergency like getting hit by the proverbial bus can land you deep in debt (medical bills are the biggest cause of bankruptcy), and you’ll even have to pay a federal penalty (I mean…a tax) starting in 2014.
With that in mind, here are some things to know before you pick a plan:
Your employer’s plan may not be the best deal. It’s true that if you work for an employer that
offers health insurance, you may be able to get it at reduced or even no cost
to you. At the very least, it usually gives you the option of purchasing into a
group plan, which can be particularly beneficial if you’re not in good health
or have pre-existing conditions. (Keep in mind that if you recently lost your
job, you may be able to continue your group coverage under COBRA for 18-36
months.) If you’re self employed, you might also be able to access group plans
through trade associations like the Writers Guild of America and the Actors’
Equity Association.
However, if you’re paying for the insurance and
you’re in good health, you might be better off getting a policy on your own.
That’s because group plans base their premiums on the group’s average health so
you could find a lower cost plan or one with more benefits for the same price
if your health is above average. You can comparison shop at a site like
ehealthinsurance.com,healthplanone.com, healthinsurance.com,
insuremonkey.com, or healthcare.gov.
You can also search for a local health insurance
agent or broker at the National Association of Health Underwriter’s website.
An agent can help you find an insurer that will accept you and guide you
through what can be a complicated application process. Just be sure that they
have experience with health insurance (not just life or disability) and ask if
they get compensated more for selling certain plans or policies. A good
sign that they’re working in your best interest is if they ask about your
eligibility for COBRA and government programs.
Your doctor may not be covered. If you want to keep your current doctor, check to
see that they’re covered by any insurance plans you’re considering. HMOs are
the most restrictive, limiting you to doctors in their network. PPOs let you go
outside the network for a higher fee. POS plans are a hybrid, allowing you to
pay extra to go outside the network but usually only after getting a
referral from a primary care physician in the network.
Your prescription drugs might not be either. Just as not all health insurance plans cover all
doctors, not all benefits are always covered. This is especially true for
certain medications, alternative practices like chiropractic care, and “extras”
like maternity coverage (at least until the Affordable Care Act mandates that
insurers start covering it in 2014). Keep in mind that even if you’re not
planning on having children now, you probably won’t be able to add maternity
coverage to an individual policy if you change your mind later. You’ll want to
make a list of any prescription drugs you take and your other “must have”
services to make sure they’re included, and look out for dollar caps and other
limitations and exclusions.
The lowest premium plan may not be the cheapest
overall. The tendency can be to
just look at the monthly premium, but that could be the least of your costs.
Plans with lower monthly costs generally make it up in other ways. First, there
are co-pays, which are a small percentage of costs that you pay when you use a
service. Second is the annual deductible, which is the amount that you must pay
out of pocket each year before your insurance will start kicking in, especially
for major expenses. (Your co-pays may or may not be counted as part of the deductible.)
Even after you meet the deductible, you may have to pay coinsurance, which is a
percentage of the remaining costs up to an out-of-pocket maximum, if there is
one.
Let’s say that you have a policy with a $20 co-pay
for doctor visits, a $1k annual deductible, and 20% coinsurance. After going to
the doctor, you pay your $20 co-pay and then get a bill for $300, which you
have to pay yourself since it’s below your deductible. Later that year, you
have surgery for $3,000. Since you already paid $300 out of your $1k
deductible, you only need to pay another $700 to satisfy it for the year.
However, you still have to pay 20% of the remaining $2,300, or another $460. As
you can see, all those expenses can really add up. That’s why you want to make
sure you have enough savings to cover them in addition to having enough income
to pay the premiums.
Don’t necessarily avoid high-deductible plans
though.
You don’t want to err on the other side either. The idea of having to potentially shell out thousands of dollars out of pocket can be frightening, especially if you’re used to comprehensive plans with low or no deductibles, but it can also save you a lot of money if you remain in good health and have the savings to cover those expenses.
One additional benefit for a policy with a high
deductible (i.e. a deductible starting at $1,200 for an individual or $2,400
for a family) is that it might be eligible for a health savings account (HSA).
This account allows you to save money on a pre-tax basis, and then to use it
tax free to pay for qualified out-of-pocket medical expenses. If you withdraw
the money for something else, you’ll have to pay taxes and a 20% penalty on the
withdrawal, but anything you don’t use can eventually be withdrawn penalty free
after age 65. If you can afford to make contributions, this can be a great way
to save for your health expenses while lowering your taxes and even saving tax
deferred for retirement.
As you can see, there’s a lot to consider when picking a health care plan. First, start by looking at your employer’s plan (if applicable) as well as options on the individual market. Second, narrow your search by limiting your choices to the ones that include your doctor, your prescription medications, and the services you want. You can then decide which has the mix of premiums and potential out-of-pocket expenses that you’re most comfortable with based on your budget and assets. Hopefully, this process will leave you a bit more healthy, wealthy, and wise.
As you can see, there’s a lot to consider when picking a health care plan. First, start by looking at your employer’s plan (if applicable) as well as options on the individual market. Second, narrow your search by limiting your choices to the ones that include your doctor, your prescription medications, and the services you want. You can then decide which has the mix of premiums and potential out-of-pocket expenses that you’re most comfortable with based on your budget and assets. Hopefully, this process will leave you a bit more healthy, wealthy, and wise.
Why Health Insurance is Important
Majority of the population in the world belongs to the
middle and lower class. If it happens that they belong to those classes,
the first thing that they should consider is a health insurance to help
them in times of emergency. In a world where uncertainty is a major
part of life, it is expected that no matter how healthy they feel at the
moment, there will come an unexpected time when they would suddenly
feel ill. This is the reason why a health insurance is very important.
Having a health insurance is very important,
especially now that medical cost is continually rising. Apart from that,
the illness and diseases occurring today are very expensive to cure. On
the other hand, wherever you are and no matter how careful you are,
accidents may happen. If you have a health insurance, it will
automatically help you in paying a large part of your medical bills.
With all those situations mentioned
above, if even beforehand you have already started investing in a health
insurance, when accidents or emergencies happen, you will have
something to turn to and help you with your medical bills.
Other than that, when you are put in a situation which involves your
health, you no longer have to worry about where you would get the
payment for your medical bills. All you have to be concerned about is making yourself better.
With a health insurance always at your hand’s reach, you can be assured
that somehow, you and your family’s health will never be put at stake
because if anything happens, the health insurance is there to help you
with your medical expenses.
Due to the importance of health insurance, governments all over the world has included in their priority to help the community through offering health insurance. Some health insurance companies have taken advantage of the opportunity by offering affordable health insurance Alabama due to the fact that almost half of its population has no health insurance plan that would help them cover their medical expenses when the need arise.
As it was said, it is important for everyone to have their own health insurance. In some learning institutions, it is a prerequisite during enrollment that students have their own health insurance for them to use in times when they would get sick caused by their hectic life. As a solution to that, there are companies and even colleges that offer affordable health insurance for students. Also, with children having the most sensitive health, what most mothers do to ensure their child’s health is to buy an insurance plan for them. It is a good thing that there are companies that offer affordable health insurance for their children. Usually, children’s health insurance includes three check-ups and lab tests.
A health insurance is very important in today’s world. With the world’s uncertainty, you never know when misfortune would come your way. So, why don’t you make the right move now? By knowing the right insurance provider, you will be able to get the best insurance coverage and pay only a low rate.
...
