Choosing the Right Health Insurance for You
There's a good reason why you're procrastinating. "Insurance has its own language and it's complicated to translate that into real language," says Kimberly Lankford, author of The Insurance Maze: How You Can Save Money on Insurance and Still Get the Coverage You Need. To stay motivated, it helps to remember that insurance protects not only your health but your entire financial plan. Nothing is more devastating to your bank account than a stack of uncovered hospital and doctor bills.
And even if you have insurance, healthcare bills can pop up everywhere—from services that aren't covered to doctor and hospital co-pays to prescription drug fees. That's why it's so important for every woman to become a savvy health consumer.
Two vital things to keep in mind:
- Don't be afraid to negotiate with your doctor when you're paying out-of-pocket. In a recent Harris Interactive poll, three out of five people who did so received a discount. With the cost of a single office visit often costing more than $200, it's definitely worth a try.
- Shop for the best prescription prices. Even people with employer coverage have to be smart shoppers for prescription drugs, especially if they have a regular medication that is expensive, says Lankford. Keep your costs low by shopping around (prices can vary among pharmacies—your best bet is a discount store or price club), using less expensive mail-order services where possible, and asking for generics whenever available.
- Do you currently have health insurance?
- Do you know how your insurance policy works? What are the deductibles? What about co-pays and lifetime caps?
- Do you ever worry that if you were to get hurt or become ill, you wouldn't be able to pay your medical bills? (Jean's take: This is no idle question. Roughly half of all bankruptcies filed in the United States are caused by illness and medical bills. Young people, especially, are tempted to "fly solo" because they are relatively healthy and feel they can't afford high premiums. In addition, people with coverage often find they're "underinsured" in the face of a major catastrophe. As difficult and expensive as buying the right health insurance can be, it can stave off even more financial disaster in the future. Plus, you'll sleep better at night.)
- Are you in the midst of a major life change? Getting married, pregnant, retiring? All of these life events may mean you need a change in your insurance.
- If you're insured by your employer, do you know all the plan options your company provides? Are you sure you have the right one for you? (Jean's take: It's important to make a list of the top five things that are important to you. That way you can choose a policy based on your needs, whether that means low premiums, good baby care or sticking with the doctor you've been seeing since college. Now is a great time to do this exercise if you're insured through your employer. This month, November, is often the open enrollment period at many companies—the once-a-year window when you can change your health benefits.
- Do you have a preexisting condition? (Jean's take: That can make it extremely difficult to get new coverage on your own, but many states offer coverage for high-risk consumers. Go to your state's insurance website for more information.)
- What do you (or a family member) need in the way of prescription drugs?
- Do you let insurance paperwork such as filing claims, appealing payment decisions, etc. pile up? Why?
- In your opinion, what's the most intimidating thing about dealing with health insurance?
- Who can help you understand the insurance maze? A trusted nurse or doctor friend? Your company's benefits department?
- Use the Web. Kick-off your shopping by heading to your state's insurance website. (Go to the National Association of Insurance Commissioner's website, www.naic.org, for a list of state sites.) Many will list companies available in your area, prices for both individual and family plans, any lower cost options your state offers if you meet certain income requirements, and tips on the latest scams and rip-offs to avoid.
Then, head to some privately run sites to get an idea of prices out there. For example, according to comparison from eHealth Insurance.com, the online market leader, a healthy family of four (30-something parents and school-age kids) can get a major medical plan—with a $1,000 annual deductible, $30 co-pay per doctor visit and $10 co-pay for generic drugs—for about $400 a month. (Note: Quoted rates are just a guide to help you shop. To actually get the rates you find, you'll have to answer several health questions and open up your medical records. Depending on your medical history, an insurer may want to charge a higher rate or exclude existing conditions.)
- Then, take your Web information to a pro. An insurance broker can be a huge help. They can do the legwork to find a well-suited insurance company (some insurers aren't in online databases), help you shop and negotiate for the best rates, and explain the ins and outs of your plan. To find a reputable broker, check credentials with either the National Association of Insurance Underwriters (www.nahu.org) or the National Association of Insurance Commissioners (www.naic.org). You also want to make sure your broker has a large "book," the industry term for the network of providers he or she works with. More options mean a better deal and a better fit.
Before signing up with any company, however, see for yourself whether its customers have lodged a lot of complaints at the Consumer Information Source section on www.naic.org. You can also check quality ratings at www.ncqa.org, the National Committee for Quality Assurance site.
- Consider the alternatives. A health savings account is a great option for people who don't need much healthcare. It goes hand-in-hand with an insurance policy that has a high deductible ($1,100 for individuals; $2,200 for families), but low premiums. The money you save on premiums each month can be deposited into the HSA Account pre-tax, where it grows tax-deferred. You then use it to pay for any unexpected medical expenses. The bonus? Once you turn 65, you can withdraw any money you didn't use and spend it on anything you want, including funding your retirement.
If you're self-employed, be sure to check with professional groups, your alumni association and even your local chamber of commerce to find less expensive group coverage. Or you can check out the group purchasing alliances that business owners in several areas have created to purchase health insurance at more reasonable rates. To find one of these coalitions, visit your state department of insurance website.
- Health Insurance 101
- Six strategies for finding affordable health insurance
- Health insurance Q&A with the American Cancer Society's Dr. Richard Wender
- How to pay for healthcare
- Cut your healthcare costs
- Navigating the insurance maze
- Open enrollment basics
- Insure your well-being
- The issue of uninsured 20-somethings
- Do you need long-term care insurance?
- Michael Moore debates the healthcare industry
How much do you know about health insurance? Take the quiz!