One of the best ways to safeguard your financial health is by purchasing insurance, which can help you avoid large, unexpected costs. Perhaps the most important form of insurance for any American is health insurance. However, not all health insurance plans are created equal, and when selecting a plan, it’s easy to make a mistake that costs you considerably down the line. Never purchase a plan blind. Always do your due diligence, especially if your employer offers multiple plans, or you are purchasing a plan independently, which means you have many options.
Some points to keep in mind when it comes to vetting a health insurance plan include:
Think about the coverage you need.
Before you even start looking at the options available to you, take a few minutes to figure out the level of coverage you will need. Too often, people assume that they are healthy enough for a basic plan that only covers preventive care and then end up paying a lot of money out of pocket. These basic plans pass many costs on to you if you experience an emergency or develop a serious medical problem.
If you’re not sure what kind of coverage you need, think about your personal and family medical history. Questions to ask include:
- Do you have a disability or chronic condition, or a high risk of developing one?
- Do you have children or are you planning to have any?
- Does your spouse rely on you for health insurance?
- What prescription drugs do you take?
- Do you often need to see a specialist as opposed to a primary care physician?
- Do you have a primary care physician right now, and if so, what medical network are they associated with?
Often, the basic plan is good for people in their 20s, but even in your 30s you may need more coverage. Of course, if you have chronic conditions you manage, you will need a plan with more coverage.
Look beyond the basic premium cost.
Try to see past any sticker shock when you look at the premium costs for an insurance plan. While you need to keep your insurance costs within your budget, do not let the monthly price discourage you from looking further into a plan. After all, the premium is only part of what you will ultimately pay for your healthcare. A plan with low premiums may include higher deductibles and more copays, so you actually end up spending more in the long run than you would if you’d selected the plan with higher premiums. Think critically about how much you use your insurance coverage to figure out how much you’ll spend in copays and other fees to get a fuller sense of the cost of a particular plan.
Review all the costs involved with the plan.
Modern insurance can be extremely confusing. If you are not sure what a specific term means, be sure to look it up so that you completely understand your costs. Most plans will have deductibles, copays, and coinsurance that come into play at different times. Look closely at the details of these charges to make sure you understand exactly what you’ll need to pay and when. One of the worst feelings is getting hit with an expensive charge when you weren’t expecting it. While knowing the amount associated with these charges is important, be sure you also understand exactly when the charges come into play.
Go over the prescription coverage.
Another important part of any insurance plan is the prescription drug coverage. If you currently rely on a prescription, you need to see how much it will cost through the plan in question. Even if you do not take any medications now, it is important to understand coverage in case you need to in the future. Calculating your prescription costs is part of ascertaining the real cost of a plan. This is another situation where it may be advantageous to choose a more expensive plan that provides better prescription coverage over a less expensive one that hardly subsidizes medications at all.
Verify the coverage details.
Before you sign any paperwork, do a final pass over the details of coverage to make sure that you’re not missing anything. You do not want to purchase a plan only to find out that the coverage is not what you thought. Compare the details of the plan to the outline you made of your medical needs to make sure everything aligns. Also, you may want to spend some time exploring the provider network associated with the plan, especially if you already have a team of doctors you like. Changing to new providers because your regular ones are no longer in network can be heartbreaking, not to mention bad for your health because it can take time for the new doctors to get to know you. The other option—paying large out-of-network fees—is also not appealing.
Find some professional help.
Because insurance plans are so complicated and choosing one is something you do infrequently, it is not unreasonable to seek out some professional assistance. Insurance agents can help you figure out your needs and find plans that fit within your budget. In addition, these agents can help you compare different plans to see exactly what it would mean to choose one over the other. If you are confused at all by the process, getting a professional on board earlier can be helpful and provide a framework for working through this problem again in the future.