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How to Choose Private Health Insurance

How to Choose Private Health Insurance Posted on August 23, 2018Leave a comment

Research the different types of plans and decide which one best suits your needs. There are several main categories of health insurance plans: health maintenance organizations (HMO), preferred provider organizations (PPO), high deductible health plans (HDHP) that can be used in conjunction with health savings accounts (HSA), and point-of-service plans (POS).

HMOs can be the least expensive, but have lots of rules and restrictions; PPOs tend to be more expensive, but offer greater flexibility; POS fall somewhere in between the two; and HDHP combined with HSA can help you reduce both your monthly premiums and your income tax bills if you’re willing to take on more risk.

Choose an insurer. Depending on your medical situation, you may find that just about any insurer works for you, or you may find that you have a special need (a preexisting condition such as diabetes, for example) that only certain insurers are willing to deal with. Also when choosing an insurance company, you should choose one that is highly rated for financial strength by a company such as A.M. Best because if the company is weak financially, they may not be there for you when you need to use your coverage. You should also ask around to see if any of your friends or family have particularly strong positive or negative feelings about their health insurance companies.

Choose a deductible. Health insurance plans come with a range of deductibles to meet all budgets. Your options might be $500, $1000, $1500, $2000, $2500, $3000 or $3500. The lower your deductible, the less you will pay out of pocket in the event of an emergency, serious illness, or other expensive procedure, but the more you will pay monthly for coverage. The reverse is also true: a higher deductible equals lower monthly premiums. Depending on what you can afford monthly and what you could afford in an emergency, you’ll want to choose the deductible (and corresponding premium) that makes you the most financially comfortable.

Select a specific plan. Once you know what company or companies you’re interested in being a customer of and how much you can afford to spend, you can examine that company’s plans to see which one best fits your needs. For example, do you need prescription drug coverage? Do the drugs have to be brand name? Do you need maternity benefits?

Evaluate the plan’s shortcomings. Most plans are missing something you wish they had. The plans may only cover a certain number of office visits per year, or the office visit copay may be higher than you’d like. Some plans only cover generic drugs. Most plans do not cover things people would really like them to, like massages and cosmetic surgery. Decide what you can live without and what you really have to have. If you get sick a lot, for example, you probably shouldn’t choose a plan that only pays for two doctor visits a year.

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