The Healthy Choice for Health Insurance

Premiums rising, benefits declining? Thinking about switching health insurance carriers? You may want to think twice and double check the figures before making a change.

For starters, why do you need health insurance? Surprisingly, you don't need it for everyday colds and rashes, aches and pains. Though health insurance is convenient in such cases, putting your monthly premium in the bank and paying for occasional doctor visits and a couple weeks worth of antibiotics yourself is usually cheaper.

Instead, you're paying for future health care you hope never to use. According to the National Cancer Institute, 26% of Americans will get some form of cancer. Many of us will need surgery for heart disease, back injuries or other conditions. As we age, risk for diabetes, stroke and other debilitating illnesses increases. Paying for coverage now protects your ability to afford extensive care later.

Generally, the best options are work-sponsored programs which are employer-subsidized and benefit from group rates normally lower than individual rates. Also, if you leave your job, you have several months under the federal COBRA (Consolidated Omnibus Budget Reconciliation Act) law to pay the full premium to continue coverage until you enter another program.

Why not risk going without coverage for a while? The key concerns here are pre-existing conditions. In most cases, maintaining your health coverage under COBRA insures coverage for any ongoing illness or reoccurrences of old illnesses. If you allow coverage to lapse, your next insurance carrier can exclude medical conditions for which you are already receiving care. For example, if you have arthritis and take daily medication, the new health plan may not cover medical visits or medicines related to arthritis.

Still, shopping around is never a bad idea, especially if you are not part of an employee program. Talk to your independent agent. He or she can direct you to group programs available to individuals working in a particular field, like plumbers, or to individuals with shared interests like sky diving. If you have to go it alone, your agent can provide quotes from a number of providers and will know best which insurance carriers work with the greatest number of doctors, hospitals and medical facilities in your area. A reputable agent will even tell you which carriers have programs for individuals which bypass the agent (saving you money on commissions - the catch, with no agent protecting your interests, benefits are often limited).

Now, time to compare. First, determine how you use your existing policy. How often do you go to a doctor for preventive care - for example, an annual physical, gynecologist/proctologist exam, etc.? How often do you go for general well-being - colds, sprains, poison ivy? How often do you go for specific care - diabetes, migraines, eczema? Usually a quick glance at your checkbook or medicine cabinet can help remind you of visits and help you determine your personal pattern. Don't forget to include medicines you take regularly.

Second, compare premiums of the programs you are considering. Then, based on your personal pattern, compare how much extra you will have to pay in co-payments for visits and medicines. Don't forget lab work - for example, your doctor may be monitoring your cholesterol level or family history may require yearly mamograms. Add these amounts to the premium.

Third, compare deductibles - the amount you pay out of pocket before the insurance company picks up the tab. Read the fine print and ask questions. For example, some deductibles only apply to certain types of care (to encourage health maintenance, a company may only require a co-pay for preventive care).

Below is a sample comparison for a 35-year-old, currently with Company A, taking medication for allergies:

At a glance, Company B looks like the better option, saving $996 per year. However, small changes such as an increase in medicine costs, an increase in number of visits or a rider or exclusion for a recurring medical condition can easily make the difference minimal. If you are unsure, speak to your agent.

Choosing the right health insurance can be a bit confusing. However, with a little number-crunching and a sound knowledge of your own medical history, you can make the least expensive choice for today and the best protection for tomorrow.