Determining which plan from among all the options companies are offering these days can be a bit overwhelming. If you have looked online at the different choices you can relate. As in anything if you break these plans down, it all starts to bring clarity to what might be important for you or your family. Here are some basic nuts and bolts to look for in a health plan.
Why do I need an Individual or Family Health Insurance Plan?
The bottom line as in all insurance plans is to protect you and or your family from devastating expense should there be an illness or accident requiring medical expense. Many consumers are able to obtain health insurance through employer sponsored group plans and in many instances this may be the best route. However not all employer plans are ideal and as such many are to comprehensive for your entire family making the premiums much higher. Unless the employer covers the entire cost for you and your family you actually be paying a higher premium than you could obtain buying individual health insurance on your own. In other words suppose that you have a fully comprehensive corporate sponsored health plan that is fully funded by your employer. If you then chose to add a family member to that same health insurance plan your employer may not cover any of the cost for those members and in turn you may be grossly overpaying for family health insurance, and should at least do some shopping and compare plans from outside of the corporate sponsored plan to see if you could obtain sufficient coverage for your family for less.
Additionally self employed workers should consider an individual health insurance plans or a family health insurance plan. In recent months many people have lost their jobs, and experienced transitions in the workforce causing many to lose their employer sponsored health insurance leaving both them and their families without crucial coverage. Many cannot afford at the exorbitant cost of a COBRA plan they are offered when the leave an employer and may go unprotected for a few or many months while seeking employment.
Most insurance companies now offer Short Term Medical Insurance also know as Temporary Insurance as an alternative to COBRA these plans can be purchase from 1 to 12 months to cover the in between employment transition time.
How Can I Determine What I Want in a Health Insurance Plan?
There are a few variables to consider when determining what plan will work best to suit your needs. You must determine what features are important and how comprehensive you want your plan to be. Would you prefer a plan that includes co-pays for doctor visits and medications? Would you prefer a plan that pays everything from day one, or a plan that has coverage for a major medical expense but offers low premiums and tax advantages. Let’s break this down a little further.
Fully Comprehensive Plans – These plans usually have a choice of deductibles once they are met the insurer will cover the first dollar of all medical expenses these plans are usually considered the Cadillac and will have the most protection for you and your family from day one but will also be reflected in the premium cost.
Co-Pay Insurance Plans – A insurance plan that will pay just a fixed amount of the cost of prescriptions drugs and Doctor Office visits. Some insurance carriers provide a discounted co-pay plan that limits the plan to two Dr office visits per year.
Coinsurance Plans/ Major Medical Insurance – This is a middle of the road plan that typically has a higher deductible of your choice ranging from $1000-$5000 that requires you to pay for all medical expenses until the deductible is met then pay 20% of all treatment and the insurer pay 80%. These plans are only a good choice for those who prefer to exchange a lower premium for covering more of the initial cost of routine medical expenses (co-pays, Dr. Visits) and just want the coverage for any major medical issues or accidents.
Health Savings Accounts (HSA’s) – This plan is like a self managed insurance that offers low premiums combined with high deductibles, the insurer pays 100% of expenses after the deductible is met . The insurer sets up a tax sheltered savings account for you where the money can grow tax deferred to use for covering your deductible. The account comes with a debit card to use for office visits and prescriptions. This plan goes with you wherever you go and is owned by you. The premium savings can be huge but it is important to contribute to the plan consistently in order to cover your deductible in the event of a major medical expense. These plans are gaining popularity with self employed and even corporations as an alternative to high insurance cost. The benefits are one deductible per family per year, low premiums, tax savings, and more control over insurance expenditures.
Keep in mind that insurance companies will combine different features of the plans above to offer different ranges of premiums. Most plans will allow for you to choose a coinsurance amount from 0 to 50% where you choose the portion of all medical expenses you will pay after you pay the deductible. Other options are deductibles themselves which range anywhere from $500 to $5000 dollars before the insurance coverage kicks in. Many rider options may be available as well such as a maternity rider, dental, life insurance and the Health Savings Account also offers an Indemnity rider should you have a major medical expense before you have accumulated enough cash in the HSA to cover the deductible.
Where Should I Purchase Health Insurance?
Most any reputable Licensed Agent can help you, most people research rates and options online these days and can run a spreadsheet from most agents’ website. You can usually choose what features you want on the plan such as deductibles, co-pays, coinsurance, and plan type this will help you narrow down the options presented to you then work backwards from there.
Regardless of what any agent may tell you the rates are set by the carriers.
You will find the same rates with the same providers everywhere and in fact when you apply online you are actually going direct to the carrier. You should stick with carriers that have a high Rating with A.M. Best or Standard and Poors which rate Insurance companies on the financial strength and ability to pay claims. Avoid companies that offer plans with rates that seem to low compared to other health plans, plans that accept you even if you have serious preexisting conditions or major illnesses, plans that claim to not be regulated by the state and plans that avoid calling the plan insurance. Most importantly do your homework and speak with an agent if you are unsure what plan suits you best.
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