How to Select a Good Health Insurance Plan
Health insurance is more important today than it has been in the past. Although it is difficult to make your budget stretch to cover savings, mortgage/rent, food, utilities, transportation, car insurance/maintenance, entertainment or eating out and extras, it is vital to do so.How would you cover all of these expenses if you were out of work–due to extended illness or serious injuries–and you exhausted your sick and annual leave?Health insurance provides a safety net which could help you recover more quickly should something unforeseen take place.
Recognize the need for health insurance. Even if your current monthly budget does not allow an expensive plan, you can purchase a basic plan, then upgrade when your finances allow.Look over your budget and determine what you are spending for your mortgage/rent, utilities, food, gas, car payment, car insurance and maintenance and life insurance. Don’t forget the extras, such as entertainment, DVD rentals, health club memberships, music lessons, hair and nail care. If you routinely deposit into a savings account, include this.After you have subtracted all of your expenses from your monthly income, you will see what is left–this will become your monthly budgeted payment for a health insurance plan.
Look at your budget again and try to “find” money, if you do not have much left over. Some examples include cutting back–but not cutting out–your entertainment budget. If you visit the movie theater every weekend, try to cut back to every other weekend. If you go to the late show, visit the matinée more often. This will cost less. Perhaps you could buy fewer CDs or DVDs. One good area in your budget is prescription medications. If you take name-brand medicine, ask your doctor if a generic formulation would work just as well. If so, visit a store such as Walgreens or Wal-Mart and buy your medications for much less than you have been accustomed to doing in the past. Steps such as these may help you increase the cash in your budget so you can afford a health plan with more coverage.
Research the different insurance companies. There are many very good companies with good health plans out there. This article is not an endorsement of any company or plan. Call insurance companies such as Blue Cross/Blue Shield, Aetna, Liberty, United American, United Healthcare and Aflac. If your employer does not provide health insurance or if you choose to buy your own insurance, this research is vital.You can also conduct your research online, but please be aware that any personal information you enter into search engines will wind up being sent to different insurance companies; you may receive several phone calls.Based on what you learn from your research and what you have decided you can afford to budget, contact a company which has the plans and coverages you need.Try not to budget too much. You don’t want to buy too much insurance. If you do this, you run the risk of being unable to pay for your premiums–your plan will lapse and could be canceled.
Take a good look at your past and current health status. If you have a chronic condition, the insurance company you choose may have to “rate” your policy. That is, your policy will cost you more because of that health issue. If the issue is serious enough, the company can write an “exclusionary” rider, meaning your condition can be excluded from coverage. However, if that condition improves, you can ask your insurance provider to remove that rider. A rider is simply language in your individual policy which details what will–or will not–be covered.Be honest with field representatives about your health. If you are less than forthcoming about any conditions you may have and the insurance provider learns about these conditions, your coverage could be revoked. By openly discussing your health condition(s), the worst that could happen to you would be a rated policy or a rider which does not pay for those conditions for a period of up to one year.
You have now entered the time when you are actively interacting with various health insurance providers. You may be given several options regarding different levels of coverage you might want to buy. These different levels will cost more as you buy more. If you are a younger insurance buyer, you will pay less than if you were 40 or older. Again, if your budget does not allow for very much, opt for a more basic plan; at any time when you feel your budget has expanded and you can afford more coverage, your insurance company will be more than happy to upgrade your coverage level.
Choose the company you want to work with. The variables you feel are most important will be different from what another person may feel to be important. Look at the willingness of your chosen insurance company to answer questions and help you to find the plan most appropriate for you and your family.
Look at the plans you are the most interested in. Do a side-by-side comparison. Look at level of coverage and how much it costs. Look at what is included–inpatient, surgical, outpatient and doctor’s visits. Which plan offers the most for your desired budget? Can you have your premiums drafted out of your account or do you have to write a check and mail it? Can you make payments online? Which plan offers you a good deductible with an affordable premium? You will have a lower premium if you choose a higher deductible.Be ready to sit down in an interview with a field representative from the company you have chosen. This interview will last approximately 1 hour to 1 1/2 hours. Your agent will fill out an application, accept your first month’s premium-in a check-and issue a conditional receipt to you.
