Health Insurance and You!

Photo by Alexander Boden

Buying health insurance can be a complicated mission. Depending on your age and health status, there may be more or fewer options available to you. This year’s health care reform legislation—the Affordable Care Act—aims to reduce the confusion and streamline the process. However, it does not become fully effective until 2014. Even then, you will still have to play a significant role in shopping around for coverage.

It is essential that your health insurance purchase is not based solely on the monthly premium quote. For one thing, that dollar figure does not include the out-of-pocket costs associated with the coverage. An extremely low premium is often correlated with high co-payments and co-insurance percentages after the deductible is met. Co-payments are fixed amounts that you must pay per service (e.g. $10 per prescription filled or $30 per doctor’s visit), while co-insurance is a percentage based on the fee doctors, specialists, and hospitals charge your insurer. Those amounts can add up fast.

Such plans can be ideal for individuals who almost never get sick. If you are younger and have no pre-existing conditions, an option that limits, for example, the number of primary care physician visits per year may be sufficient. It provides catastrophic medical coverage that those starting their careers on smaller salaries can afford. This is also due to high annual deductibles, which must be paid out-of-pocket before the insurance plan kicks in and starts paying.

The same health insurance plans that work for one group can be disastrous for another. In the previous case, an older person with a pre-existing condition would be out of luck. Financial burdens would befall you if your policy excludes a condition that you either suffer from or are likely to develop in the future. All of these elements should be researched beforehand, including prescription drug coverage; to save money, many insurers will only pay for generics—which lead to major hassles for those on brand-name medications that are either unavailable or less effective in generic form.

Another important aspect of choosing your health insurance plan is comparing the various provider networks. Make sure that there are convenient providers in your area; the plan will be largely useless otherwise. If you have any existing physicians you want to stay with, it is best that they are in-network. That way, it will cost less to visit them. Otherwise, you may have to pay full price for out-of-network health care providers.

All of these concerns can be intimidating for the average person. Still, there are ways to get around this barrier to affordable health insurance. The Associated Press recommends that you use a licensed health insurance broker: their experience and education will prevent them from becoming lost in the confusion of coverage options. Make sure that he or she is licensed in your state of residence.

According to the Associated Press, insurance brokers can be most helpful if you have a pre-existing condition. They know which plans are most likely to underwrite you, and will not waste your time (and money, since some health insurance companies charge nonrefundable application fees) by applying for health plans guaranteed to refuse your particular condition. Instead, they will guide you towards the options that best fit your needs.