How to buy health insurance

Shopping for health insurance probably is more difficult than buying a car or a house because you have to be very good at finding a reliable agent, comparing plans and reading the fine print, which can be a challenge for lawyers.

About 202 million Americans have private health insurance. By 2010 about 20 million people will buy health insurance through insurance agents and insurers rather than through their employers. In 2007, according to the Census Bureau, 177.4 million people were covered by employment-based insurance. Please note that Census Bureau figures are very questionable, but these are the best figures I can find at the moment.

In the June 24, 2009, edition of The Wall Street Journal, Anna Wilde Mathews’ article, Going it alone when buying a health policy, explains how to research the health insurance markets.

Since you may spend $5,000 to $20,000 a year, or $25,000 to $100,000 over five years, on health insurance, it pays to learn how to play the health insurance markets. Nobody will look after you, your family and your money as carefully as you will, especially if you know what you’re doing.

Simply put, the first step is to read her article and the some 55 comments on the article. (Paid subscription required, and it’s worth it if you’re about to spend $10,000 to $20,000 for a year’s worth of health insurance.)

The second step is to talk to, say, half a dozen insurance agents. Get names of agents and brokers from friends. The more agents you visit with, the more you’ll learn about the agents and about your options. Look for an agent who represents several insurers and works for you as well as for commissions. Those commissions range from 3% to 20%, Mathews reports. So, be careful.

Mathews recommends that you talk to agents who specialize in health insurance, not new agents nor agents who also sell property and casualty or life insurance. Understanding and keeping up with health insurance is a full time job.

Third, visit online insurance sites and brokers. Web-based brokers suggested by Mathews include:

www.eHealthInsurance.com
http://www.HealthPlanOne.com
http://www.HealthInsurance.com
http://www.InsureMonkey.com

Other resources include:

www.healthinsuranceinfo.net
http://www.familiesusa.org
http://www.healthcarecoach.com

Impact graphs from Mathews:

Some consumers choose plans based solely on online research. But without guidance, it can be tough to fully understand the nuances of a plan and how it compares to other options. First, make sure you’re actually buying insurance, not some other product such as a discount card. Don’t just look at premiums. Figure in other fees you will face, such as a percentage of the cost of doctor visits. Make sure you understand the policy’s annual out-of-pocket maximum, meaning the most you might have to spend in a year, since certain charges might not count toward the total.

Also, watch out for benefit limits or exclusions. If you focus just on price, “on the back end, you’re going to get stung,” says Ida Schnipper, founder of patient-advocacy firm Health Champion LLC.

Before making a final decision to purchase a policy, closely review the full plan explanation, sometimes called the certificate of coverage or the evidence of coverage, and seek help from the Web brokerage’s agents or other experts if you don’t understand it. Insurers may let you review this document only after you tentatively choose a plan.

If buying health insurance looks like a lot of work, it is.

We’ve been buying health insurance for ourselves and employees since 1986. And despite our expertise in insurance and health care, we always depend on our health insurance broker for information and guidance. But it helps to know what questions to ask, and you can save a lot of money and grief by asking good questions.

Do your home work.

Commenting is not available in this channel entry.

<< Back to main