4 Critical Questions to Ask Yourself When Shopping for Health Insurance [SPONSORED]
Shopping for health insurance can be a daunting task. Before you begin your search, ask yourself a few basic questions. These questions will help save you time, money and confusion in the future. We've partnered up with Horizon Blue Cross Blue Shield of New Jersey to bring you four great tips to help you when shopping for health insurance.
What do I need from a health insurance policy?
Of course, the easy answer is that you need financial protection in the case of illness due to the high cost of health care. But there are different plans to help you get the protection you need and can afford. Keep in mind that your true out-of-pocket costs are a combination of your premium, any deductibles and co-payments under the policy, and also co-insurance required under a policy.
Co-insurance is the percentage of your medical claims you have to pay under a policy. For example, if the policy is an 80 / 20 policy your insurance company will pay 80 percent of your doctor or hospital bill and you will have to pay 20 percent. A policy with co-insurance will generally be less expensive than one without it. Because premiums reflect the claim payments made by your insurance, the more risk you accept in terms of deductibles, co-payments, and co-insurance, the lower your premiums will be; the more comprehensive your coverage, the higher your premiums.
To determine the most appropriate coverage for you, take a look at what you actually spent on health care in the last year or two. Do you need insurance to cover some of those costs or the maximum amount possible? In other words, how much can you afford to pay out of pocket, if necessary, in order to keep your premiums as low as possible?
Another consideration is whether you need coverage for specific types of expenses such as prescription drugs, dental and vision care. Some people see those expenses as routine and affordable; others with high expenses would rather pay for insurance coverage.
How much flexibility do I need when receiving health care?
Health plans typically have a network of participating health care providers and if you use these “preferred” or in-network providers, your costs will be lower. In-network providers have contracts with your insurance company that discount the price of their services. Out-of-network providers don’t have contracts with your insurer, so the cost to your insurance company, and you, are higher. These higher out-of-network costs are also passed along in higher premiums.
Some insurance plans allow you to go outside the network and others don’t. In nearly all cases, not using a preferred provider means your co-payment will be higher.
The questions you should ask the health plan are:
(1) Are all or most of the providers my family uses in the plan’s network?
(2) If not, am I willing to change doctors or pay a higher out of pocket cost?
(3) Does the plan allow me to receive care out of network?
Are there policy exclusions or limitations?
Before buying a policy, make sure you are aware of any exclusion for specific medical conditions. Are pre-existing conditions covered and if so, are their waiting periods before benefits will be paid? Is my coverage delayed if I am receiving care or confined in a hospital on the effective date? As a footnote here, pre-existing condition clauses in health insurance policies end in January, 2014 under terms of the Affordable Care Act.
How do I know where to purchase health insurance?
You will want to compare several plans before making a decision. Contact several insurers or visit their websites to get basic information or speak to an insurance agent. You can also visit the New Jersey Department of Insurance (DOBI) website and check out the Buyer’s Guide. You should confirm that a company is authorized to do business in New Jersey. Healthcare.gov also provides information on many of the plans available in your state, including cost and benefits.
When you are ready to buy
Make sure you know when your coverage begins because some policies have a waiting period. Ask if there is a “free look” clause that allows you a period of time to cancel with a premium refund if you decide the coverage is not for you.
Above all, read the information you are provided and be sure to get answers to all your questions before you make a commitment.