A How To Guide to Buying Health Insurance

Buying health insurance on your own can be confusing. There are hundreds of plans, of many different types, by different insurers, with different levels of coverage. Perhaps one of the biggest “benefits” of a work plan is that you don’t have to learn about the different types of health insurance. Complicated or not, millions of people are buying private health insurance today, so it can be done. This article is going to walk you through some of the basics.

There are many types of health insurance. Some people need coverage between jobs, others need it for their employees at work. This article is going to focus on long term health insurance for individuals. This type of insurance is for people who don’t have a plan at work, or who wisely believe they can get insurance cheaper then what they are offered at work.

When considering what type of plan to buy, the first thing you should consider is what combination of premium and deductible you are most comfortable with. Health plans fall along a continuum from high deductible with no additional costs to a very low deductible with high out of pocket costs for medical care. While there are plans at every point along this continuum, most people will choose either a low premium, high deductible plan, or a plan with a low deductible but a high premium.

There is no “right’ decision here. Whatever you choose will provide you with medical coverage. With a high premium plan you pay more every month in exchange for paying less when you need medical care. For instance, your premium may be $400 a month, but your deductible – the amount you pay before the insurance kicks in – may only be $500. Whereas a plan with a low premium – say $175 a month may have a deductible of $5,000. By paying less every month, you are agreeing to pay a larger portion of your health care costs out of pocket before the insurance kicks in.

If you choose a low premium plan, it is important that you start saving towards your deductible, in case something happens. Even though most people will not use enough medical care to fully satisfy their deductible, its still wise to be prepared. If you use a low premium plan, consider getting an HSA, which allows you to save for the deductible with pretax dollars, reducing your health care costs.

Once you decide what type of financial structure you would like for the plan consider how important the choice of doctor is to you. If you have a physician that you frequently use and want to continue to do so, call their office and ask them what health insurance companies they accept. This will narrow down what plans are available to you.

At this point you are ready to start comparing plans. You can get quotes for plans through an insurance agent or you can do it online. If you go through an agent, make sure you are clear about what you want. While most agents are honest and put your interest first, some will push a plan they get a high commission on.