Affordable health insurance plans are available, but sorting through the many insurance quotes and plans offered by a wide range of companies can be confusing if you don’t know exactly what kind of coverage you want and what you can afford. Rather than looking at every health insurance plan and quote from every insurance company, it is less time-consuming to create some basic criteria about what you want in a health insurance plan and only look at those plans which meet your criteria. This criteria is based on two very simple things: what you need and what you can afford.
What Kind of Coverage Do You Need?
The first point to consider when evaluating health insurance plans is what kind of coverage you and your family require. There are two levels of coverage: basic and major (or catastrophic) coverage. Generally speaking, it isn’t the run-of-the-mill doctor bills that could eat up your life savings, but a serious accident or illness. Therefore, most insurance agents recommend that you make sure your health insurance policy incorporates both basic and major coverage.
Basic medical insurance coverage includes: normal doctor’s expenses, basic hospital and basic surgical expenses.
Major medical insurance coverage includes: surgery, anesthesiology, ambulance fees, radiology fees, x-rays, blood/plasma work, oxygen, prescription drugs, nurse services, home care, therapy and much more in addition to the basic coverage listed above.
NOTE: The most important service to be covered is hospitalization. If you are not covered for hospital care, then one sickness could cost you thousands of dollars, even hundreds of thousands of dollars and drain your family’s savings.
You should also think about what type of managed healthcare system you prefer. The three main types offered by insurance companies are: Fee-for-Service, HMOs (Health Maintenance Organizations) and PPOs (Preferred Provider Organizations). Each offers different levels of doctor availability, affordability and amount of paperwork. Read our section on types of health insurance to learn more about each type and determine which is best for you and your family.
Some questions to ask yourself to determine your needs:
- Which services are most important to you?
- Hospital care and doctor visits should always be covered, but what about maternity care, immunizations, mammograms, medical tests, surgery (inpatient and outpatient), x-rays, mental health care, etc.?
- How old are the members of your family? Will any older members of the family be needing nursing home care?
- Are you planning to get pregnant in the near future? What kind of coverage does your plan offer for children?
- Does anyone have special health care needs?
- Do you want a plan that offers dental care or vision care also?
- What kind of prescription drug coverage do you need?
- Rank the issues are most important to you out of the following: choice of doctors, location of doctors and hospitals, availability of doctors, amount of paperwork and waiting period before coverage begins. Use these rankings to determine which type of medical insurance to get.
What Can You Afford?
The second most important issue regarding a health insurance coverage policy is cost. Premiums and deductibles will determine the level of coverage you can afford, and depending on your health status and finances, it may save you money to pay a lower premium/higher deductible. Co-payments, out-of-pocket maximums and lifetime benefit ceilings should also play an important role in your insurance decision, as they can affect your assets should a catastrophic event occur. Before committing to any health insurance policy, be sure to research thoroughly and ask questions before signing anything. And remember: if a deal looks too good to be true, it probably is.
Some questions to consider when evaluating the cost of a health insurance plan:
- What is your monthly premium?
- What is your deductible?
- What is your coinsurance rate or copayment, if there is one? (Note if there is a higher rate for special services, such as outpatient mental health care.)
- Are there any annual limits for days or services covered and the amount spent on you?
- What is the maximum you will have to pay out-of-pocket each year?
- What is the lifetime limit, if any, that you will be reimbursed?