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Although many
Americans rely on their employers for health
insurance coverage, there are several
circumstances in which private health insurance
is a must. If the time has come to select your
own insurance, read on for some tips to guide
you in the process.
When You
Might Need Private Health Insurance
Private
health insurance is sometimes required if you
are:
-
A recent college graduate
- Most college students are covered under a
parent's health insurance plan or a plan
offered or required by the university and
sometimes they're covered under both. Grads
lose their college insurance and independent
status because of their age, or graduate
status, which also makes them ineligible to
be covered by their parents' policy.
-
Unemployed - If you lose
your job because of downsizing or
resignation, you are most likely eligible to
continue with your employer's health
insurance plan under COBRA except that you
will have to pay its full cost yourself -
the employer won't subsidize part of the
cost like it did when you were an employee.
Eventually, this coverage runs out, and if
you are still unemployed, you will need to
find your own insurance. If you lose your
job because you were fired rather than a
victim of a downsizing, you are not eligible
for COBRA and you'll need to find your own
insurance right away.
-
Part-time employee -
Part-time jobs rarely offer health benefits.
If you work part time, you usually have to
supply your own health insurance.
-
Self-employed - Unless you
can be covered under a spouse or partner who
is a W-2 employee, you have to provide your
own health insurance if you work for
yourself.
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Employer - If you start a
business that has employees, laws might
require that you offer them health
insurance. Even if it is not required, you
might want to offer it to be a competitive
employer who can attract qualified job
candidates. In this situation, you will have
to shop for a business health insurance
plan, also known as a group plan.
-
Retired - When you retire,
you are no longer eligible for
employer-sponsored health insurance. You'll
have to buy your own and because of your age
and possible health conditions, it can be
quite pricey.
-
Dropped by your existing
insurer - Sometimes people who need to make
extensive use of their insurance, such as
people who have serious medical problems,
are dropped by their insurance companies
even if they've been loyal customers for
years. If this happens to you, consider
seeking the guidance of an insurance agent
who can help you find a plan specifically
for someone with your medical condition.
Why You Still
Need Health Insurance
If you find
yourself in one of the above situations, don't
go without coverage for even a day. A small
emergency like a broken bone can ruin you
financially if you're uninsured. These things
are called "accidents" for a reason - in other
words, you can't predict when they will happen.
No one expects to get hit by a car while going
for a walk or fall down the basement stairs when
carrying the laundry, but these things happen
and they can be expensive without health
insurance.
If you think you can't afford your own
insurance, you might be wrong. While there is a
lot of hype in the media about the rising cost
of healthcare, health insurance plans are
available at a variety of prices. You might not
be able to afford the kind of plan an employer
would offer, but any plan is better than no
plan. At a minimum, you want to be covered in
the event of a major incident, such as an
illness or the aforementioned broken bone.
First, decide whether you want a health
maintenance organization (HMO), preferred
provider organizations(PPO), high-deductible
health plan (HDHP), consumer-driven health
plan(CHDP) or a point of service (POS) plan.
Depending on your situation, a short-term plan
might also be a good option.
After you've decided on a type of plan, you'll
need to determine a deductible you are
comfortable with. What could you afford to pay
out-of-pocket each year in a worst-case
scenario? Remember, the higher your deductible,
the lower your premium; if your monthly cash
flow is low, you might have to opt for a higher
deductible.
Next, go to the website of each of the major
health insurance companies in your area and
examine the options for the deductible you've
chosen. Plans available vary by state, and
within your state, the premiums for each plan
vary by zip code. Also, be aware that the plan
price quoted on the website is the lowest
available price for that plan and assumes that
you are in excellent health. You won't know what
you'll really pay per month until you apply and
fork over your medical history.
Price and coverage can vary significantly by
company. Often, it's difficult to make an
apples-to-apples comparison to determine which
company has the best combination of rates and
coverage. Your best bet is to limit your options
to reputable insurers, then choose the plan they
offer that provides the best combination of
features you'll use at a price you can afford.
If you're choosing a family plan or an employer
plan, you'll want to consider not just your own
needs, but also the needs of others who will be
covered under the plan.
Factors to
Weigh in Choosing the Right Plan
Health
insurance plans offer a variety of features.
It's unlikely that you'll find a plan that
offers everything you'd like, but consider the
following features you need most so you can find
the plan that offers the greatest number of
them.
-
Does the plan offer
prescription drug coverage? Does it only
cover generics? What is the co-payment
(co-pay) on generics and on name-brand
drugs?
-
What is the office visit
co-pay, and does the plan cap the number of
office visits it will cover per year?
-
What is the co-pay for
professional services, such as x-rays, lab
tests and surgery?
-
What is the co-pay for a
hospital stay? For an emergency room visit?
-
Do you want a plan that
allows you to add vision and dental coverage
at minimal cost?
-
Do you need pregnancy
benefits?
-
Do you already have a
doctor you like? If so, you might want to
find a PPO plan in which your doctor is part
of the insurance company's provider network.
-
What is the plan's
lifetime maximum payout? Try to get the
highest amount possible if you're buying a
long-term plan.
-
Does the plan offer
discounted services for preventive care,
such as a free annual check-up?
-
Do you want specialty
services like physical therapy, chiropractic
and acupuncture visits to be covered?
-
For PPOs, what is the cost
for out-of-network services, should you want
or need them? Can you afford this?
Conclusion
Getting your own health insurance policy isn't
as easy or inexpensive as getting signed up with
an employer's plan, but once you figure out what
you need and become familiar with the
terminology, it's not too intimidating. With the
number of options available, you can probably
find a plan that meets your needs - and your
budget.
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