5 Factors to Consider Before Buying Health Insurance
Any purchase needs to be carefully considered along with the factors related to it. If you’re planning on buying a house, you first have to check your finances, its location, and its condition. If you’re purchasing a car, you have to check its payment scheme, fuel usage, and if it fits your lifestyle.
The same thing goes for buying health insurance plans. If you’re a first-timer, it can be intimidating wading through the different terminologies in the industry. With the stakes high- given that it’s your health you’re talking about – it’s important to consider all factors.
Here are some things you need to know before you pick a plan.
1.Your employer’s plan may not be the best deal.
Employers that provide health insurance to their employees are great. You can get it at a discounted price or even for free. It can also provide you the option of buying into a group health insurance plan, which is usually beneficial for employees of advanced age with pre-existing conditions.
However, if you’re paying for the insurance and you’re in good health, you might want to consider buying a policy of your own. Group insurance plans base their premium on the group’s average health. This means if most of the group have pre-existing conditions and you don’t, you’re still going to pay a higher premium.
2.Your doctor may not be covered.
If you have a current doctor and you’re looking to purchase health insurance, check your choices if they cover your doctor. Some insurance plans like HMOs are restrictive, limiting you to doctors in their network. This means if your doctor is not covered, you’re going to be doubling your expenses if you still prefer their service even after you avail of your policy.
PPOs, on the other hand, allows you to visit doctors outside your network but for a higher fee. POS plan also does this but you can only proceed after getting a referral from a primary care physician included in their network.
3.Your prescription drugs may not be covered as well.
Similar to the case with doctors and their networks, certain medications, alternative practices, and “extras” may not also be included in your health insurance. This includes chiropractic care and things like maternity coverage.
Make sure to read the inclusions carefully when going over your health insurance choices. Write down the list of prescription drugs you need and make sure they’re included. Also, look out for dollar caps and other exclusions.
4.The lowest premium plan may have hidden costs.
It can be tempting to just go with the plan that has the lowest monthly premium. However, plans like these usually make up for it in other ways, through co-pays and annual deductibles.
What are these?
Co-pays are a small percentage of costs that you need to pay when you avail of a service like check-ups and the like. The annual deductible is an amount you pay out of pocket each year before your insurance starts kicking in, especially for major expenses. Even after paying the annual deductible, you may have to pay for coinsurance still. Coinsurance is a percentage of the remaining costs up to an out-of-pocket maximum.
5.Still, consider high-deductible plans.
It’s understandable if you’re intimidated by high-deductible plans. After all, you pay it out of your own pocket. However, these types of health insurance provide one additional benefit – they can be eligible for a health savings account.
The HAS allows you to save money on a pre-tax basis, then use it tax-free to pay for qualified out-of-pocket medical expenses. If you withdraw it after age 65, there will be no penalty fee and you can use it however you want.
In conclusion, choosing a health insurance plan comes with a lot of factors to consider and fine print to read through. It’s an investment for your future self and your family, so be careful in choosing your plan. Consider all factors written above and you’ll be fine, armed with wisdom and knowledge in your choice.
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