What to Discuss With Your Agent When Choosing Health Insurance

If you own your own business, are self employed or do not have insurance coverage through your employer, you might be in the market for an individual health insurance policy. Purchasing an individual health insurance policy has many advantages. You have a world of options, but sometimes these options can be overwhelming. These tips can help you find a health insurance policy that works for you.

1.  Balance your needs, wants, risks and costs.
Many people want a health insurance plan that covers 100 percent of your costs and has an extremely low prescription drug copay. A health insurance policy with 100 percent coverage has expensive monthly premiums. This may not be the best choice for someone who is rarely sick.

2.  Find out what type of agent you are dealing with.
Make sure you ask an insurance agent if they are a captive agent, independent agent or an insurance broker. Typically, you will want to be careful of dealing with a captive agent because they only represent one company which obviously limits your choices. An independent agent or an insurance broker will give you the widest range of health insurance companies to choose from.

3.  Know when you must pay your deductible.
You will definitely need to find out when the calendar year deductible is paid and if separate deductibles for each family member would ever have to be paid at the same time. Some plans say that no more than two family members pay a deductible during any calendar year. Be sure to know what your health insurance policy says about when a deductible is to be paid.

4.  Know your maximum coverage.
What are the lifetime maximum benefits and are there any caps on illnesses? This is an important aspect of your insurance coverage. Also, organ transplants may have another specific coverage maximum that you should ask about. Organ transplants can cost as much as half a million dollars, so plans with low limits on organ transplants can be very risky financially.

5.  Determine if it uses a schedule plan.
Schedule plans only pay a certain amount for procedures, regardless of what they cost.

6.  Know how often you can go to the doctor on your copay.
Many health insurance plans have unlimited doctor visits at the same copay amount. However, some plans limit the amount of times you can visit a doctor, typically as few as 2-4 times per year.

7.  Learn what coinsurance percentage and stop loss number mean.
The coinsurance percentage is how the payment gets split between you and your health insurance company. Health insurance policies with a lower stop loss number usually mean you will pay less out of pocket. Let's figure out the insured's maximum out of pocket on an 80/20 plan that has a $1,000 deductible and an 80/20 split of the first $5,000 (stop loss number).

$1,000 + 20% of $5,000 ($1,000) = A Maximum Out of Pocket of $2,000.

Now, let's figure out the insured's maximum out of pocket on an 80/20 plan that has a $250 deductible and a $10,000 stop loss number.

$250 + 20% of $10,000 ($2000) = A Maximum Out of Pocket of $2,250.

8.  Find out the plan's service deductibles and access fees.
The calculations above do not include separate service deductibles or access fees. These could be hidden costs that may surprise you when you need treatment or an extended hospital stay. Some plans can charge a hospital access fee of as much as $750 for the first three days of a hospital stay.

Any plan that seems to good to be true should always be checked out with your State department. You should never have to become a member of a union to purchase a policy. Plus, all health insurance policies have a 10-day free look period that lets you change your mind within those ten days at no cost.