Guide For Buying
The Right Health Insurance,
The First Time, and second.

The little things in life are bigger than they look. If it wasn't for wise old Mom and Dad most Newlyweds would put health insurance a long way down the list of “necessities” and probably all the way over into the luxury category. No wonder then that many people don't realize they are “under-insured” until an emergency happens. Only then do they realize that the insurance coverage they bought on a whim just ten years ago is woefully inadequate for their current needs. Worse yet, any plan on the market is only as good as the company that underwrites and stands behind it.

The very first thing you want to discover is WHICH COMPANIES are permitted to provide you with health insurance in your state of residence. 

There is really no excuse for not buying good health insurance to start with since IRS Publication 502 says that up to 7.5 percent of your adjusted gross income medical insurance premiums are a medical expense eligible for deduction. Admittedly that rule won't work if your “premiums” are your share of the health insurance plan provided by one of your employers.

So, consider these steps as you buy into health insurance

Interview A LOCAL Agent.

A licensed, independent insurance agent is a goldmine of information, not to mention industry gossip.  But, before you go interviewing a local agent, bear in mind that agents can only represent insurance carriers they are personally appointed to represent IN YOUR STATE.  It costs money to secure an appointment and in many instances agents can not be appointed to a specific company for love or money.  Asking them for an unbiased opinion of some carrier that won't let them represent them is really out of the question.  However, your local agent will be able to share feedback received from other clients about any given health insurance company, customer service, or insurance products. 

Since you may have to live with the health plan of your choosing, you need to have some idea of what your future will be like. Think through your wants and needs when it comes to coverage. For example, how important is it to you to pick your own doctors? If it does not really matter, then an HMO may be a terrific cost-saving choice. On the other hand, if you have a favorite doctor that listens to your problems first and leaps to intelligent decisions second and you wish to continue consulting this physician rather than picking someone else, you may wish to consider the pricier PPO.

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Add-Ons

Some companies will bundle their products with other coverages, such as short- and long-term disability, prescription drug coverage, dental and vision coverage. Again, if these are important to you, make sure the insurance company you wish to do business with will offer them.

Ask About Out Of Pocket Expenses

Take the time to study the fine print. For example, how much are the co-pays? Is there an annual cap on the co-pays? Do these caps pertain to a calendar year, or do they apply to ANY 365-day period? In addition to the amounts you are responsible for co-pays, what is the percentage of coverage?

What Does The Future Hold?

When picking an insurance company it is imperative that its products and coverages can grow with you and your changing needs. Thus, a company that specializes only in catastrophic coverage only will be of little use once you have children in the house.

Accessibility

An insurance company should be easy to get a hold of, should have extended office hours, and naturally also a toll-free number. Before you sign on the dotted line, give your selected company a call and get a feel for average hold times, times of operation, and also services offered via telephone.

Full Disclosure

When purchasing an individual health insurance policy, the underwriter will look at your medical history. Prior to comparing rates, be sure to write down the highlights so you will be able to compare apples to apples. Discussing these will give you a feel for what kind of information raises red flags for each insurance company. Make sure the rates don’t suddenly change after you sign on.

Pre-Existing Conditions

Most companies will not insure pre-existing conditions; others will do so only after a lengthy waiting period. Still others are legally mandated to carry "guaranteed issue" policies. Prior to signing on with a company, get a detailed list of what is considered a pre-existing condition, how long the exclusionary period will be, and also what kind of coverage will be provided once the exclusion ends.

Rate Increases

Talk to friends and neighbors who are insured with the company you are choosing, or if you are working with an agent, seek to find out how often the insurance company has raised its rates in the last 10 years.  With the value of the American dollar falling almost every day it is only natural for rates to be moving upwards.  By studying a 10 year history you will have a fair measure of the possible rate changes that will await you once you sign on!  There's the convenient fiction that some companies have that says: "You can never be singled out for a rate increase."  Inquire just what is meant by that statement?  The whole company? The whole state? The whole county? The whole city?  There have indeed been times when whole states were singled out for rate increases, and times too when whole states were dropped.   

Company Rating

There are 3 ways to check out an insurance company’s rating.  Most people never think of anything except the Better Business Bureau, and then only after it's too late. Ideally you should check out any company only after you have just about decided it is THE one for you.  The first place to check is with your State Insurance Board.  Ask how many unanswered complaints that company has on file.  If the answer sounds like a whole herd for the size of your state, ask for clarification on how that fares across the board.

Almost every insurance company will tell you in advance of your questions what its NATIONAL ratings are, and try to make it sound wonderful.  A+ sounds great until you check the rating system and find out that's actually about third place.  Then there's the B ratings, and finally the C ratings.  If it gets any lower than that you have cause to wonder just long this company will last.