Ten years or so ago if you wanted to purchase, or even learn, about Medical Insurance, you would call an insurance carrier or an insurance broker.  They would send a licensed agent to come out to your house with lots of brochures. The agent would take a couple of hours going over the health plans with you. He would explain what a High Deductible Health Plan was and how it worked.  He would show you how to compare the monthly health insurance premiums with the out of pocket expenses.  After about 15 minutes or so your eyes would start to glaze over and even though you probably would not say anything, because who wants to be rude, you would simply stop paying attention.  Watching the grass grow can be more entertaining than looking at insurance statistics. To get the insurance person out of the house you would probably pick a health premium that looked affordable, write a check and, thankfully, say good-bye to the agent having no clue as to what you just bought.  You would not be able to answer the question, “how much would it cost you if you went to the hospital?”

Now, in 2011, most health insurance is sold over the internet via the telephone.  There are no brochures to look at except electronically.  Agents in large national call centers are encouraged to sell, not to educate and just spit out Health Insurance Quotes.  The consumer is probably left with still not knowing what he/she will pay if he/she goes to the hospital.There are entire books written about health plans and how to purchase them correctly.  I’d rather go to the dentist than read one.  Here are some simple, easy to understand things you should understand to intelligently buy medical insurance.

1.  Money.  To calculate the annual costs of an insurance plan add up the monthly premiums for the year, the deductible and any co-insurance.  Example: a plan that has a $200 monthly premium, a $1500 deductible and $3000 in co-insurance would cost $2400 a year in premiums and another $4500 if you had to have surgery or go to the hospital and ended up with a large bill.  A plan that cost $225 a month in premium and had a $250 deductible and $2500 in co-insurance would cost $2700 a year in premium and another $2750 if you had to have surgery or go to the hospital.  The $225 monthly premium plan actually saves you $1450 if you become ill.  You have to pay attention to the major medical out of pocket costs because thats where the big money you could owe will show up.

2.  Risks. Are you young, healthy and counting every penny?  If you got sick without health insurance it could force you into bankruptcy.  Consider getting a high deductible health plan (say $5000 to $10000).  The premiums will be very low and you may pay off the deductible over time if you became sick.  HSA’s are also a great choice for young and healthy people.  Folks with young families should shop for the lowest deductible with as many benefits as they can afford.

3.  Carriers.  Insurance carriers are rated by Standard and Poor’s.  You can never go wrong with an “A” rated insurance carrier.  It’s always a good idea to stick with a nationally known company.  They will have larger networks and be accepted all over the country should you become sick while traveling.

4.  Reasonable Expectations.  Take prescription medication?  You will pay a deductible for brand name drugs and a pretty hefty co-pay.  Try to get generics.  Most carriers are now charging a facility fee if you go to the emergency room and are not admitted.  Only go to the ER if you need to have surgery or are really, really sick.  You can save money with a plan that does not offer doctor co-pays.  Only go to see the doctor a couple times a year?  It doesn’t make sense to pay an extra $100 a month to pay $35 to see a doctor twice a year.

5.  Health Care Reform Well care visits are free and there are no longer annual or lifetime limits to major medical coverage. Visits to mental health professionals are now available for the same as a doctor co-pay if you have a policy with doctor co-pays.

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