Need some health insurance?

Health insurance is a must-have for everyone. Even if you get the cheapest policy, it will protect you from devastating bills resulting from serious injuries. However, some policies will cover much more.  When looking for a policy, here’s what to consider:

Components of an Insurance Policy

There are four basic components to a policy: a premium, a deductible, a co-pay, and a limit.

• Premium – the premium is what you pay to be covered.  It’s usually a monthly payment, but you can save some money by paying in a lump sum.
• Deductible – a deductible is an amount of money you need to pay on your own before your policy kicks in.  So, if you have a $1,000 deductible for a year, you will have to pay $1,000 out of pocket before you can start billing your insurance company.
• Co-Pay – a co-pay is the percentage of the bill that you will have to cover yourself.  So, if you have a 80/20 co-pay, you will pay 20% of any bill.
• Limits – all policies will have a limit, after which you will have to cover your own expenses.  However, if the limit is too low, you can get an umbrella policy for fairly cheap.

What coverage types are there?

You can get health insurance on your own or through your employer. Either way, the same rules apply. The two most widely-used policies are HMO and PPO.

• HMO: This stands for Health Maintenance Organization. This is a group of doctors and hospitals that have grouped together under an insurance company. HMOs can be restrictive since you have to have a primary doctor in the group to oversee all your medical needs. The benefit of an HMO is the price. It is usually much more affordable than other types of coverage.
• PPO: This stands for Preferred Provider Organization. A PPO closely resembles the HMO setup but is less restrictive. You don’t have to be tied to one primary doctor. Rather, you have the freedom to choose whichever doctor you want at any time, with no referral needed. This plan is usually more expensive than an HMO, but it allows you more control over your health care in general.
• Fee for Service – under these plans, you get to bill your insurance company for services no matter where you receive aid. They are generally the most expensive option.

How much is this going to cost?

The premium price for health insurance depends on a number of factors.  Here are a few of them to keep in mind when searching:

• Employer policies – if you’re getting insurance through your employer, it will almost certainly be far cheaper than getting it on your own. Employer plans are cheaper because they involve a lot of individuals.
• Age/Health – as you age, the cost of health insurance will rise.  It will also rise if you have certain health issues.  It’s important to note, also, that some health issues may prevent you from getting a policy.
• Location – a policy rate might be affected by the state or specific place where you live.
• Policy details – if you want a low deductible and/or a low co-pay, you can expect to pay a significantly higher premium, and vice versa.

Of course, the only time you will actually know how much your policy cost is after it ends.  Only then will you be able to look back and count how much you spent vs. saved in coverage of bills and injuries.

Health insurance works much the same as car insurance, which you should also have.