1. Be Realistic
What gets a lot of people in trouble when looking for their own health insurance is they often will only consider plans that are similar to what they had with a previous employer. A majority of the those plans are unaffordable for the average individual.
You need to treat buying health insurance like everything else you buy, meaning you buy a model or version of a product you can afford.
You don’t walk into an electronics store looking for a new TV and head straight for the 65 inch flat screen TV with every imaginable bell and whistle, do you? OK, so maybe you do. But after you enjoy your moment of entertainment bliss your haze of love lifts to reveal a hefty price tag. As a result you quickly shuffle down the line to find a more modestly priced option. You need a TV so you find one you can afford. The same rule should apply to health insurance.
2. Deductible means if you really have to.
The most common mistake people make when searching for their own health insurance is trying to purchase a plan with an unnecessarily low deductible. You do not want to look at your deductible as an amount of money that is easily achieved. It should be high enough that you are a little uncomfortable coming up with that amount on short notice, but not too high that you have no chance of realistically covering it if the worst were to happen.
3. Know your out-of-pocket maximum.
This is a number that is just as important as your monthly premium and yearly deductible. Your annual out-of-pocket maximum is the total amount of money you are potentially responsible to pay for in a calendar year. While most of people's attention is focused on the deductible and how low it may or may not be. If you don’t know what the bottom line is you could be unprepared for a catastrophic medical procedure.
4. Do you really need copays?
Contrary to popular belief, the only time it’s cost effective to consider a plan with a copay is if you expect to see a doctor in excess of four or five times a year or are currently taking several brand name medications that don’t offer a generic alternative. Otherwise, you’re spending extra money each month in your premium (monthly insurance payment) for a benefit you aren't using. It’s like paying extra each month for HBO and only watching it two or three times a year. The cable company isn’t going to give that money back because you didn’t watch, just like the insurance company won’t if you don’t go to the doctor.
5. Something is Better Than Nothing
This tip may contradict everything I just said, but ultimately, any insurance plan is better than nothing. Of course, there is always a few exceptions to the rule, but a majority of the plans you can purchase will greatly protect you from a catastrophic financial loss as a result of medical treatment. Even if you have an extremely high deductible of $10,000 dollars, some medical procedures can cost hundreds of thousands of dollars. While $10,000 might seem like $100,000 too some people, always remember that if you have a health insurance plan with a $10,000 deductible and needed $100,000 of treatment, your insurance company will have already paid the doctors and hospital $90,000 dollars. That hospital will be much easier to deal with settling up on your deductible under those circumstance then if you had nothing and still owed them the full $100,000.
6. Talk to an Agent or Broker
At the end of the day it doesn’t matter how many buying tips I write. Talking to a licensed insurance professional will give the best opportunity to find adequate coverage. Since you are going to pay the same price if you buy directly from XYZ insurance company or if you work with an independent agent, there is really no reason not to have a 15-20 minute conversation with someone who deals with health insurance every day.