Consumer Information On Selecting Health Insurance

If you are unemployed, self-employed or working for a company that does not offer health insurance, you may find yourself navigating the market for a health plan of your own. About 10 percent of people in the United States covered by private insurance in 2009 had an individual plan, according to the Employee Benefits Research Institute. To get a plan that works for you and your family, it is important to be a smart shopper.

Types

The insurance industry is full of acronyms, many of which describe plan types. A health maintenance organization (HMO) requires that you go to certain doctors, hospitals and other providers for the costs to be covered. A preferred provider organization (PPO) has a "network" of providers like that of an HMO, but also allows you to see out-of-network providers--at a higher cost. A high-deductible health plan (HDHP) offers full services with a relatively low premium, but a relatively high deductible.

Terminology

To shop effectively for health insurance, you need to be familiar with the most commonly used terms. Your premium is the fixed amount you pay each month to maintain your coverage. A co-pay is a set amount you pay, from your own pocket, for each visit to a doctor, hospital or other health care provider. A deductible is the total you must pay out-of-pocket before your insurance ever kicks in. And co-insurance is the percentage of any medical bills that you must pay--for example, after deductibles and co-pays are met, your insurance may pay 80 percent of charges, leaving you with the other 20 percent.

Warnings

When selecting a health plan, be on guard for red flags that make a plan less attractive. For example, check to see if any conditions such as cancer, heart disease or even pregnancy are excluded. See if the policy mentions maximum coverage amounts; if you are in the hospital and reach the policy maximum before you are discharged, you may rack up huge charges that you will have to pay from your own funds. Look not only for what is there, but also for what is not; if prescription drug coverage is not specified, for example, it is probably not included.

Considerations

Depending on your health status, age and general station in life, one of several specialized types of insurance policy may be appropriate for you. A catastrophic health coverage plan is for hospital and major medical expenses only; they are for people who have a tight budget, but want to be protected just in case something tragic happens. An HDHP (high-deductible health plan) can be good for a relatively young person who rarely uses health care services. Short-term insurance, which provides a safety net for a low cost, lasts for one to six months and is good for people between jobs.

Insurance Broker

If sorting through the options for health insurance seems too daunting, you can work with an independent insurance broker. You don't have to pay the broker; the insurance companies do. It is best to use a broker who works with many insurance companies and can help you find and apply for a policy well-suited to your needs. The National Association of Health Underwriters, at nahu.org, lists brokers across the country.