Let's get this out of the way: Shopping for health insurance could hardly be considered the top of anyone's list of favorite activities. It's more often likened to the misery of a root canal without anesthesia, a blind date with a man who gets salad dressing all over his face, or that dream where you have to give a presentation but you've forgotten both your notes and your clothing. Shopping for shoes, books and private yachts is fun; shopping for health insurance is not.
But don't despair. The good news about shopping for health insurance is that it's getting much, much easier. And while we can't promise that investigating premiums and comparing networks of doctors will ever be as much fun as a barrel full of monkeys, we can say that putting in the work of buying insurance is far preferable to dealing with sky-high medical bills. It's also a task worth getting used to; in 2014, carrying health insurance becomes a requirement, thanks to the Affordable Care Act. At that point, though, there will be exchanges set up where you can do one-stop comparison shopping. Until then, the process will take a few more steps, which we'll walk through in this article.
Now, let me show you something that will prove just how easy shopping for health insurance has become, a trick that will no doubt compel you to read further. When using the Google search engine, I learn that "buy health insurance" yields more than 35 million results. That's enough to make you retire the dream of getting health coverage. However, by completing another search on a different site, I find that for a person like me, living in Atlanta, Ga., there are precisely 47 private insurance plans operating in my area, in addition to a handful of federal and state programs. Suddenly, choosing a health insurance plan doesn't seem so daunting. Want to know the secret of my searching success? It's on the next page.
Must-haves and Might-needs: Setting Your Health Insurance Priorities
In 2010, the White House unveiled HealthCare.gov. The Web site is an easy-to-use resource that provides a great deal of information about buying health insurance. The site features a database of all the insurance plans that are out there, and by answering just a few questions about your age, location and health status, you can learn which ones you might be eligible for. The search results include both public and private options, so you'll be reminded that you might be eligible for the new governmental health plans for people with pre-existing conditions, or that your children might be eligible for the Children's Health Insurance Program (CHIP).
When it comes to health insurance, you may want to spend as little as possible, particularly if you're in good health. Resist this instinct and compare the plans available on more than just price points. A cheap insurance plan tends to offer bare-bones benefits, which could cause trouble down the line should you get in an accident or get really sick. If HealthCare.gov turns up 50 plans, then, it's good to consider each one's benefits. But how?
As with most shopping tasks, it's good to make a list of the things you want from your health insurance so you won't forget anything. If you're a young, healthy individual, you may need a few check-ups per year, but if you're starting a family, you'll want to look for a policy with maternity care and well-baby visits. Perhaps you're already on a few medications -- you'll need help paying for those. Maybe you see certain doctors or specialists, and you don't want to switch physicians. Take a moment to list the kind of coverage you'd need at this exact moment; let's call these conditions your "must-haves."
Then, you'll have to indulge your darkest fears, if ever so briefly. You need to consider what kind of care you'd need in a worst-case scenario. Do you want the ability to visit an urgent care center? If you're at risk for a heart attack, you'd need to consider surgery and hospitalization. If you were injured in a car accident, wouldn't you want access to diagnostic testing like an X-ray? Add some of these procedures, which we'll call your "might-needs," to the list you started of must-haves.
Got your list? Head on to the next page, where we're going to turn it into a full-fledged chart.
Comparing Health Insurance Plans
On the last page, we talked about making a wish list of the health insurance benefits that you'd like to have in an insurance plan. With this list in hand, we can check which of the plans in HealthCare.gov's database fits these needs. HealthCare.gov provides links to each insurer's Web site, where you can find the list of benefits and services covered by a given plan. If you put your wish list items on separate lines down a piece of paper, you can then put the plans that you're investigating across the top -- voila! Instant comparison check list. Making charts and keeping detailed notes -- whatever methods that make it easy to evaluate the various plans -- may seem tedious, but it will save you time in the long run.
As you compare the coverage offered by different plans, you'll probably be able to eliminate the ones that aren't right for you. Perhaps your favorite doctor isn't in one company's network of preferred providers, while a single male may be able to eliminate options that offer extensive maternity care he doesn't need. It's also important to consider any caps on coverage, such as the number of appointments or medical procedures you can have.
Now, the element you've been dreading -- price. Eventually, HealthCare.gov will feature pricing information, but for now you can find pricing on a company's Web site or call them to obtain a quote. There are a few numbers to consider. First, there's the premium, or the fee that you pay for coverage. Once you've secured coverage, there are a few more costs you'll have to absorb out-of-pocket before the insurance company picks up the tab. For example, a visit to a doctor's office for a check-up may require a co-pay, such as $20, while other plans use a coinsurance method. That same visit may be split 80/20 between the insurance company and the patient, so that you'd pay 20 percent out of pocket to see the doctor. Take note on how these fees increase if you need care outside your service area; out-of-network fees are usually tremendously high and should be avoided if possible.
Lastly, you'll also carry a deductible, which is the amount of money you have to pay for service before your insurer will pick up the rest. Deductibles can range from a few hundred to a few thousand dollars. The higher your deductible, the lower your premium, but selecting a very high deductible is a bit of a gamble. After all, you could get into a car accident tomorrow and be on the hook for several thousand dollars before your insurance company pays a dime. For that reason, you don't want to select a deductible that's more than you can pay out. You should also check that a plan has an annual out-of-pocket limit; a cap on these out-of-pocket costs will be vital should you get very ill or injured.
Ultimately, we can't tell you what you should pay, because that depends on your budget, but your completed checklist should provide a good guide of what you'll get for the money that you'd be paying.
Sealing the Deal and Buying Health Insurance
You've done a lot of comparison shopping, and you're ready to seal the deal. Make one last research effort -- check the ratings of the insurance company that you've chosen with the Better Business Bureau and with A.M. Best, a financial services rating company. Since we've focused primarily on buying insurance online, you'll want to double-check that you won't fall victim to a scam.
When you're satisfied, you can contact the company and begin the process of applying for insurance. Be honest and accurate about your medical history when filling out the application. The insurance company will complete a process called underwriting; once you've been approved, carefully check all documents that are sent to you. Your chart will come in handy for this, because you'll be able to ascertain that you'll receive the benefits you want for the price you agreed to.
Once you've purchased your health insurance plan, don't forget about all of the hard work you did to get there. During the research process, we looked in to what doctors were in a provider's network and which services were eligible for coverage. In order to get the best value for your money, you'll want to heed these findings. If you use the doctors, hospitals and pharmacies that have contracts with your insurer, you won't be subject to additional out-of-network costs.
Though we focused on "must-haves" and "might-needs" when shopping for a health insurance plan, you can also consider the "special bonuses" that come with your insurance plan. These might include things like discounts for health clubs, counseling to draw up a nutritional plan or incentives for quitting smoking. While these services may not have been paramount during your insurance search, using them if you do have them can help to keep you healthy, hopefully avoiding those scary "might-needs" of surgery and hospitalization.
Want to learn more about health insurance? See the links on the next page.
- Bittner, Sylvia. "How to shop for health insurance." Michigan Farm Bureau. (July 22, 2010)http://www.michfb.com/files/benefits/health_insurance/3.%20How%20to%20shop%20for%20health%20insurance.pdf
- Cohen, Elizabeth. "How to shop for health insurance." CNN. March 12, 2009. (July 22, 2010)http://www.cnn.com/2009/HEALTH/03/12/choosing.private.insurance/index.html
- Dratch, Dana. "Buying Private Health Insurance." Bankrate.com. Dec. 30, 2008. (July 22, 2010)http://www.bankrate.com/finance/insurance/buying-private-health-insurance-1.aspx
- Ehrenfeld, Temma. "How to Shop for Health Insurance." CBS MoneyWatch. June 29, 2010. (July 22, 2010)http://moneywatch.bnet.com/saving-money/article/buy-health-insurance-how-to-shop-for-a-plan/439890/
- HealthCare.gov Web site. U.S. Department of Health and Human Services. (July 22, 2010)http://www.healthcare.gov/
- "How to Shop for Health Insurance." Blue Cross Blue Shield of Illinois. (July 22, 2010)http://www.bcbsil.com/getting_started/how_to_shop/index.html
- "How to Shop for Health Insurance." Wall Street Journal. (July 22, 2010)http://guides.wsj.com/personal-finance/insurance/how-to-shop-for-health-insurance/
- Konrad, Walecia. "When Choosing Health Care, Know What You'll Owe." New York Times. July 9, 2010. (July 22, 2010)http://www.nytimes.com/2010/07/10/health/10patient.html
- Robertson, Christopher Tarver, Richard Egelhof and Michael Hoke. "Get Sick, Get Out: The Medical Causes of Home Mortgage Foreclosures." Health Matrix. 2008. (July 28, 2010)http://law.case.edu/student_life/organizations/healthmatrix/files/Robertson%20Final%20Article.pdf
- "Shopping for health insurance work sheet." Bankrate.com. 2007. (July 22, 2010)http://www.bankrate.com/brm/news/Financial_Literacy/pdf/Aug07_work_sheet_health_a1.pdf
- "Smart Tips for Buying Health Insurance Online." U.S. News and World Report. Feb. 24, 2009. (July 22, 2010)http://health.usnews.com/health-news/articles/2009/02/24/smart-tips-for-buying-health-insurance-online.html