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Top 3 Tips for Buying Health Insurance

Top 3 Tips for Buying Health Insurance

Posted Jan 10, 2013 by Author

Shopping for health insurance can be a daunting task. Many push it to the bottom of their to-do list even though securing an affordable, reliable medical plan is important to financial and physical health.

We’d like to offer these three tips to help make buying health insurance less overwhelming:

1. Decide if you want to stick with your current clinic or physician.

When choosing a health insurance plan, start by asking yourself a couple of questions:

  • Are you happy with your current clinic and physician’s services?
  • Is it important to stay with your current clinic or physician?

If you answer “yes,” find out what network you preferred doctor and clinic belong to. Make sure that the health insurance providers you are comparing include them. If you are looking at high-deductible or short-term medical insurance plan options with up-front out-of-pocket expenses, you should be able to remain with your current provider.

Can’t find the network your local clinic participates in? When in doubt, contact your healthcare provider.

Read the U.S. Department of Health and Human Services’ “Guide to Health Care Quality: Know It when You See It

2. Consider the total annual cost of health care for you and your family.

Think beyond your monthly premium. Make sure you understand the total cost you may have to pay for health services, treatment and prescriptions throughout the year.

  • How much can you afford to pay for out-of-pocket expenses?
  • Do the health insurance plans you are comparing include deductibles, copays, and/or coinsurance?
  • How often did you and your family members see the doctor in the past year? Did you see any specialists? What about previous years?
  • Do you or your family members need any ongoing treatments or take any long-term medications?

Start by calculating your family’s medical needs and expenses for the past year—go back a few years if possible. Figure out what you have spent on average for health insurance premiums and out-of-pocket-expenses including prescription drugs as well as deductibles, copays, and coinsurance. Are you able to pay a similar amount in the future, or do you need to lower costs?

Determining how much are you willing and able to afford for out-of-pocket expenses each year is important when selecting a health insurance plan. Think about the type of deductible you can afford. Your deductible is the amount of money you pay each year for medical services before the health insurance company begins to pay the remainder of your insurance claims. Your copays—payment to your doctor each time you visit—go toward your annual deductible. Once you’ve met your deductible, you’ll continue to pay a percentage of each bill, known as coinsurance, until you meet your annual out-of-pocket maximum.

A low deductible generally means higher premiums and copayments. A higher deductible generally means lower premiums and copayments. Consider high-deductible health plans if you are looking for lower monthly premium costs. Coupled with a health savings account (HSA), it can provide affordable coverage while offering a pre-tax dollar savings account.

Use Money-Zine’s Health Care Insurance Cost Calculator to compare plan options

3. Analyze health insurance plans further than premiums and deductibles.

Be a wise consumer. Make sure you are choosing a health insurance plan that fits both your family’s physical and financial needs. Look beyond the first things that come to mind—monthly premium, deductible, copay, coinsurance.

  • Does the plan cover prescription drugs and other services?
  • What additional services does the policy cover?
  • Are there limits on the number of days the insurance company will pay for services?

Make a list of things that are important to you and your family’s wellness—immunizations, surgery, prescription drugs, maternity, mental health benefits, and well-baby programs.

Look at what each plan offers and compare them. Factor in what you considered in tips 1 and 2, and you should be able to determine which health insurance option covers most of your needs at the rate you can afford.

Read Kiplinger’s “What to Consider when Picking a Plan” for additional guidance