Whether you're in the enviable position of choosing between health insurance plans at work or have the less-than-enviable task of buying your own health insurance, it can be easy to be overwhelmed by your options. Understanding how you will use your health insurance and what you need can prevent you from feeling like you've been ripped off when it comes time to use your insurance.
What Kind of Insurance Do You Need?
If there's one mistake most people make when shopping for health insurance, it's purchasing a policy that's not the right fit. Before you start comparing your options, take the time to consider how you will you use your insurance. Do you have a health condition that requires frequent doctor visits and maintenance medications? Are you generally healthy, but would like coverage in case of catastrophic illness? Knowing the answers to these questions will give you a head start. Full- or traditional-coverage health insurance plans are best if you visit the doctor even three times a year, while so-called catastrophic plans might work for those who never go to the doctor and only want coverage for serious illnesses.
How Much Do You Spend on Health Care?
Your out-of-pocket costs are a huge consideration when choosing a health insurance policy. Figure out how much you spend in a typical year before you start looking at plans. If, for instance, you spend a lot on frequent office visits to manage a health condition, then reasonable co-pays or office visit costs and out-of-pocket caps will be important to you when choosing a plan. If you rarely go to the doctor, a plan with a higher office visit cost and higher deductible might be more attractive. All health insurance plans are a dizzying combination of trade-offs, such as higher premiums for lower co-pays and higher co-insurance costs for lower premiums. So deciding the most cost-effective way to cover your health care needs before you buy can help prevent unwelcome surprises.
Is Prescription Coverage Important?
Stiff competition between pharmacies seeking your business has made steep discount plans on generic medications common, lowering the costs of maintenance prescriptions. But before you cut corners on your plan by eliminating prescription coverage, look over your prescription usage in a typical year. If you take even one medication that is not available through a discount plan, it can add hundreds or thousands of dollars to your health care costs over a year.
Are You Eligible For Special Coverage?
If you really want to feel ripped off after buying health insurance, wait until you find out that you were eligible for a program such as Medicaid or Medicare, or benefits for your children through a Child Health Insurance Program administered by your state at a lower rate than you are paying. Don't purchase health insurance without first seeing if you qualify for coverage under a program that will greatly reduce your costs.
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