By Art Forrest
The recent (and ongoing) health care debate has illustrated how expensive health care is, regardless of whether it?s financed by insurance premiums, higher taxes by the government, or cash out of your pocket. It?s important, then, for both individuals and small & large businesses to choose the most appropriate and cost effective coverage for their needs. Here are a few general comments and things to think about?
Health INSURANCE vs. Health Care FINANCING
Most health insurance plans are health care ?financing,? NOT health care ?insurance.? Insurance is, by definition, the pooling of risk for an unexpected financial loss–like your house catching fire or a tree falling on your car during a tornado, or, health-wise, having heart surgery for $145,000.
Question: does your auto insurance pay for oil changes, new tires, or that brake job? Of course not! Those are routine maintenance items that you pay for on your own! What if your auto insurance offered to cover them ? think your premium would go up?
The same is true with health insurance: the more comprehensive the coverage, the more expensive it is. As you consider health insurance, ask yourself a few questions:
1. How ?much? health care to you generally use? Don?t buy a Lexus if all you need is a used Toyota.
2. What?s your real risk? Big, expensive stuff (like hospital stays & surgery)? Most folks could find a way to finance $5-10k if they had to, but how about $50,000+? That?s what health insurance is for ? catastrophic protection.
3. Work with a broker. While it?s okay to shop online ?on your own,? most folks are better off dealing w/ a broker who specializes in health insurance. Find a broker near you by visiting The National Association of Health Underwriters, the professional association for brokers (full disclosure: like me) who specialize in health insurance. A broker will be able to present you with a wide range of plans and options designed to give you the best, most cost-effective coverage.
4. Don?t be discouraged if you don?t think you can get coverage. If you find it hard to get coverage, especially due to current or recent medical history, remember that there are a LOT of different plans & companies around. Frankly, there are very few people who find themselves completely out of luck. Again, deal w/ a competent broker who has a ?vested interest? in helping you (remember: if you?re not happy, he doesn?t get paid!).
5. Stick with the ?brand name? companies. This stuff is too important to ?play around? with and, sadly, there are a bunch of plans around that are not very good.
While you?re waiting for healthcare reform to take effect?
While there are certainly a lot of things that could/should be changed about our current health care & health insurance system, getting mad at your insurance company because of high prices is rather like being mad at the waiter because the food at the restaurant is too expensive.
Your premium cost reflects (1) the cost of health care (doctors, hospitals, drugs, & lots of gov?t regulations), (2) how much health care ?financing? you want or expect (i.e., routine care benefits like doctor visits and prescription co-pays, etc.), and (3) your specific ?situation? (age, sex, dependents, location, and your health. Remember, with auto insurance, if you have a bunch of tickets or accidents, you?re gonna? pay more for your auto insurance).
Regardless what you think of the health insurance industry, health care is very expensive in this country. In closing, here are some tips to help you control the cost:
- Finding a good broker (see above).
- Buy a plan with a big deductible (think ?insurance,? not ?financing?).
- Consider supplementing that big deductible plan with critical illness and accident coverage (73% of claims over $10,000 are due to either accident or the ?big things??-heart attack, stroke, cancer, etc.).
- Take better care of yourself; eat right, exercise, be smart about it.
(In addition, please see the updated 20 Part-time Jobs With Health Insurance post for the most current list of employers who offer health coverage for their part-time staff.)
Art Forrest is owner and founder of A.C Forrest insurance group, a family-run business that focuses on the needs of individuals and small businesses. With offices in suburban Atlanta and in Greenville, SC, AC Forrest serves clients in the Southeast, and maintains a referral network throughout the United States. For more information in regard to the content of this post, or for any other insurance matters, feel free to contact him via email.