Finding the Right Individual Health Insurance Plan, Part 2: Assessing Your Budget Needs
Posted by Corinne M. on Thu, Mar 25, 2010 @ 04:33 PM
In my last post I gave some tips for determining what benefits you need in an individual health plan. By now you probably have an idea whether you need a plan with basic benefits, a plan with a wider range of benefits and options, or a HSA-compatible plan. Now it's time to take a look at your health care budget so you can get this coverage most affordably.
Monthly premiums are the first cost to consider. Basic benefit and HSA-qualified plans are designed to have low monthly premiums, and more comprehensive plans with richer benefits are generally going to cost more. It's a good idea to see how different coinsurance and deductible choices affect a plan's monthly cost - you can choose a higher annual deductible to reduce your monthly premium.
Next, consider your other out-of-pocket expenses. Choosing a plan with cost sharing elements may bring down your premium. (Examples of cost-sharing include doctor's office visit copays, Rx drug copays, annual deductibles, coinsurance, out-of-network or emergency room deductibles, etc.) Many people who need basic coverage appreciate their low monthly premiums and are willing to cost-share when they utilize their health plan. On the other hand, some would rather pay higher premiums for a plan that offers more first-dollar coverage.
This is why it's important to check your plan for first-dollar benefits - these are medical services your insurance policy will pay for without first requiring you to pay out-of-pocket towards your deductible and/or coinsurance. For example, your plan may pay up to a certain dollar amount for preventive care services before you participate in any cost-sharing. Or you may have a Rx drug copay with no deductible to meet.
Finding the plan with the right benefits and price takes some research and numbers-crunching, but it's a worthwhile effort to find the plan that fits best. To learn more about individual health insurance costs, see Mary K's post "Individual Health Insurance Basics Part 2" our read Celtic's Individual Health Insurance Guide Choosing the Right Individual Health Plan.