Health Insurance Buyer’s Guide

Need to buy health insurance, but not sure where to start? This guide will help you to:

• Understand your health insurance options
• Evaluate the cost of various health insurance plans
• Choose the best plan for your needs
• Identify important benefits to consider
• Find affordable coverage

Types of Health Insurance

When purchasing health insurance, there are two types of plans to consider:

Indemnity Plans- Sometimes referred to as reimbursement plans, this option allows you to choose your own doctors, hospital and care providers, and then reimburses you for part or all of your medical expenses.

Managed Care Plans- With this option, you choose your doctors, hospital and care providers from a network of approved providers. The insurance company then pays the provider directly for its portion of your medical expenses, and the provider in turn bills you for the remaining balance.

Within the managed care umbrella there are three types of plans to consider:

Health Maintenance Organizations (HMOs)- You choose a primary care physician, and must go through him/her to get referrals to network-approved specialists.

Preferred Provider Organizations (PPOs)- You can see any doctor you’d like; but will pay less, if you choose one of the insurance company’s preferred providers. You can also see a specialist at any time – without first securing a referral.

Point of Service (POS)- You choose a primary care physician, who refers you to specialists within the network; but you may also opt to choose your own specialists from a preferred provider network or to see providers that fall outside of the network entirely. Using the specialists that your primary care physician recommends is the cheapest way to go, but the insurance company will pick up a portion of the tab no matter what.

Health Insurance Benefits

While most health insurance plans include coverage for physician, hospital, surgical and major medical expenses, there are other expenses that may not be covered.

These include (but are not limited to):

• Dental care
• Vision care
• Preventive care
• Mental health care
• Prescription drug coverage
• Maternity Care

If any of these benefits are important to you, be sure that they are included in your plan, and that the offered coverage meets your needs.

Understanding Your Out-Of-Pocket Expenses

When choosing health insurance, it’s important to consider the full cost of each plan that you’re considering. In addition to the monthly premium that you’ll be required to pay, you may also be responsible for one or more of the following:

Co-payment – How much you’ll be required to pay each time you see a doctor or any other health care provider. Co-payments are paid directly to the doctor’s office.

Deductible – How much you’ll be required to pay towards your medical expenses before your insurance company will begin to pay its share.

Co-insurance- The percentage of your medical expenses that you’ll be responsible for after your deductible has been met.

Evaluate Your Health Insurance Needs

Before you start your search for health insurance, spend some time evaluating all of the health insurance options available to you. Then, weigh those options against your specific needs. Consider the following questions:

• How much can you afford to spend on premiums?
• Do you want to be able to choose your own doctors?
• Are self-referrals preferable to you?
• Is a low deductible important to you?
• Do you mind paying co-pays? What about co-insurance?
• Are dental and vision benefits must-haves?
• What about prescription drug coverage?

Where to Buy Health Insurance

Know what you’re looking for, and ready to start shopping for it? Consider these sources for affordable health insurance:

• An insurance broker – They’ll check the rates at a number of insurance companies, so you don’t have to; and help you to understand the terms of each policy
• An insurance quote website- If you prefer a more do-it-yourself approach, use an insurance quote website. You’ll be asked to fill out a questionnaire, and then the site will return a handful of quotes for you to consider.
• Associations you belong to- Do you belong to a professional organization or civic club? If so, check to see if it offers health insurance to its members. It’s a great way to get group coverage when you aren’t able to get it through work
• Your states insurance website- Check your state’s insurance department website for a list of companies that sell individual coverage in your state, and save yourself the hassle of checking with a bunch of companies that don’t.
• The National Association of Health Underwriters website- If you prefer to deal directly with the insurance companies, check the NAHL site for a list of member-agents in your area. (with National Association of Health Underwriters linked to http://www.nahu.org/consumer/findagent.cfm)

Have you recently lost your job or will you soon be losing your job?

Consider continuing your current health benefits through COBRA. While expensive (you’ll pay both the employee’s and employer’s cost), it’s a way to keep your health insurance for up to 18 months.

Having trouble finding insurance because of a pre-existing condition?

Check to see if your state has a high-risk insurance pool that you can obtain insurance from. Like COBRA, this is an expensive option, but it’s a way to secure health insurance when you’ve been turned down everywhere else.

Not able to afford private health insurance?

Check with your state to see if you qualify for Medicaid.

Health Insurance Shopping Tips

As you narrow your search down to a few companies, be sure to:

• Verify that each company is licensed to do business in your state
• Ask for a detailed explanation of what the plan does and does not cover
• Ask if there are annual or lifetime limits on certain services
• Ask if there are yearly and lifetime maximum out-of pocket caps
• Provide a detailed medical history with your application and check for pre-existing conditions exclusions to avoid problems with the policy down the road

Found a Good Deal on Health Insurance?

Don’t make your final pick until you’ve gotten at least three insurance quotes and you’re certain that you understand all the terms of the policy. It may take some effort to find the right plan, but your health is certainly worth the effort.