For all you first-time healthcare insurance buyers don’t let
your inexperience keep you from getting the coverage you need at a price you
can afford. While facing a myriad of insurance
decisions can be intimidating, if you’ve prepared yourself well, you should be
able to make smart insurance choices like a pro!
To get you started, here are some terms, explanations, and
guides that will help you on your way!
First of all, you’ve got to be able to speak the insurance language.
After all, before you can make any decisions, you have to know what
deals you are making. The following are
some of the most common health insurance terms and what they mean:
is the monthly payment you pay to the insurance company to keep your insurance
coverage. Think of a premium as rent on
an apartment. You pay a set amount every
month to keep your apartment (insurance coverage).
This is a fee you pay up front each time you use a certain service. Usually, it is fairly inexpensive and
consistent. Think of this as the
apartment complex’s laundry machines.
You pay a small, consistent fee each time you use a machine (visit a
doctor, order prescription medicine, etc.).
An annual deductible is a certain amount of money that you will have to pay
out-of-pocket before your insurance kicks in.
Think of a deductible as maintenance in your apartment. Typically, you are responsible for cleaning
and minor upkeep. But past a certain
point, your landlord will be responsible for more major maintenance
issues/expenses (you pay $1000 in medical expenses per year, and then your
insurance covers anything beyond that).
This is a certain percentage of the expense that you share with your
insurance. For example, your insurance
may be responsible for 80% of a doctor’s visit, and you are responsible for the
remaining 20% (even if your deductible is met).
Think of coinsurance as utilities in your apartment. If you consider all utilities as one expense,
your landlord may pay for 80% (electricity, water, gas) and you pay 20% (phone
out-of-pocket Costs: To protect you from unmanageable out-of-pocket
expenses, this feature sets a maximum limit on how much you have to pay each
year (including copayments, deductibles, and coinsurance – but not
premiums). Sorry, no apartment analogy.
It is also important to know how interrelated these things
are. For example, the higher deductible you have, the cheaper your premium will be
(or vice-a-versa). Some plans may not
have a deducible at all, and coinsurance percentages can differ extremely. As you start to consider your options, keep
in mind how these features affect each other.
Now that you know what kind of payments you will be dealing
with, it’s time to assess your needs. The
coverage that is right for you depends on your life situation.
For example, young, healthy, single people usually don’t
face many medical issues (unless they are daredevils) and probably won’t visit
the doctor often, need prescriptions, or frequent hospital stays. However, a middle aged married couple with a
few kids (and more on the way) will need coverage for several doctor check-ups,
a few trips to the emergency room, and maternity coverage.
Consider your life situation, your risks, medical history,
and other factors that could affect the coverage you need. In order to forecast your insurance needs,
look into the past: how much medical assistance did you require last year? Are you extremely active/prone to
injuries? What is your family’s medical
Once you’ve got a good idea of what kind of medical expenses
you may face in the future, you can move on to selecting a plan.
Finding the Right Plan
Of the many types of health insurance plans out there, each
has their own strengths, benefits, and features that suit the needs of different
demographics. As you start to search,
look for policies that fit your budget and your needs.
If you need help choosing a plan or negotiating costs and
coverage, one of our independent insurance agents here at CSP Insurance
Services can help you work out a plan suited for you. Get help today by calling our office or
submitting a request for a FREE