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It's time to turn your queasiness into action, especially if you're one of the growing number of Americans without health insurance. There are options that can fit your budget and health needs. The cost depends on your circumstances, like where you live, how healthy you are and whether you're male or female. See which one of these plans fits your situation, and use the health insurance glossary below to wade through the terms.
The Just-in-case-I-get-sick Plan
aka Short-term Insurance
WHO: If you're a student who is no longer on your parents' policy or you are graduating from college, short-term insurance covers the gap. It's also helpful for those between jobs or those waiting for benefits to start on a new job.
COSTS: Depending on where you live, your monthly cost (or premium) may start at less than $50. Your deductible (or out-of-pocket costs before insurance starts to cover your expenses) could be as low as $500.
PROS: You can pay month to month.
CONS: It is only temporary. Most plans will cover you for 12 months or less. They often do not cover preventive care, such as yearly physical exams.
HOW TO GET IT: Before you graduate and go off your parents' policy, shop for student health insurance, which may be available through your college or university. If you've already graduated, you can purchase short-term policies directly through health insurance companies.
NOTE: As many as 30 states now have laws that allow young adults to stay on their parents' health insurance plans beyond age 18 or after college graduation. Most allow for coverage up to ages 25 or 26, with New Jersey even allowing coverage up to age 30, regardless of school enrollment status. To read details about each state's laws on this issue, visit the National Conference of State Legislatures website.
The I-may-get-sick-in-the-future Plan
aka Permanent Individual Insurance
WHO: If you support yourself through freelance work, temping or running your own business, look into permanent individual plans that offer long-term coverage.
COSTS: A monthly premium can begin around $100 with deductible as low as $2,000.
PROS: The variety of plans available lets you pick and choose the benefits you want, such as your doctors and hospitals.
CONS: The price of individual health insurance varies widely and can have a high deductible. Before you start your insurance search, ask yourself two questions: Do I need prescription drugs? Is there a particular doctor I want to continue seeing? Figure out what you want and need, and then shop around.
HOW TO GET IT: First, find out if your alumni association, place of worship, or a professional organization to which you belong offers access to health insurance. Your premiums and out-of-pocket costs could be lower. Then, go online to such sites as Tonik.com, Assuranthealth.com, and eHealthInsurance.com to see what plans are available in your zip code. These resources let you compare options. Make sure that you do business with a reputable, well-known company that has a strong network of doctors and hospitals.
The I-know-I’m-going-to-get-sick Plan
aka Individual Insurance
WHO: Insurance companies may do their own investigation of your health history before offering an individual health plan — a process known as medical underwriting. That means that if you have an ongoing illness or medical condition, such as asthma or diabetes, you could face a challenge finding coverage. In insurance lingo, this is known as having a pre-existing condition.
COSTS: Generally, it is difficult to estimate typical insurance costs related to pre-existing conditions.
PROS: There are insurers who will provide coverage, although there may be certain restrictions. For example, they may impose a "pre-existing condition exclusion period" in which they will not cover treatment related to your particular health issue for a certain length of time, usually 12 months.
CONS: Some insurers may reject your application or charge higher premiums.
HOW TO GET IT: Speak with a reputable insurance agent or broker to explore your options. Also, check with your state's insurance commission. Most states have high-risk insurance pools that provide coverage to individuals with pre-existing conditions.
The I-probably-won’t-get-sick Plan
aka Catastrophic Coverage
WHO: Catastrophic coverage is another name for lower-premium, higher-deductible individual plans. As the name suggests, these plans provide coverage if something happens to you that requires major medical care.
COSTS: Monthly premiums range from $30 to $175 with deductibles from $500 to $20,000.
PROS: Lower-cost coverage provides some protection if you have a serious injury or illness.
CONS: Most catastrophic plans offer bare-bones coverage and extremely high deductibles. That means higher out-of-pocket expenses for doctors' visits and prescription drugs.
HOW TO GET IT: Sort through individual policies with higher deductibles and lower premiums.
The I’ll-never-get-sick Plan
aka No Insurance
Whatever your age and health, going without coverage is a bad move, no matter how invincible you feel-period. A trip to the ER for knee surgery can quickly add up to $10,000 or even higher. A ruptured appendix or other emergency surgery can cost more than $30,000.
There's a reason why bank-breaking medical bills are the leading cause of bankruptcy in the United States. It's very expensive to get sick when you are not insured.
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Health Insurance Glossary
Co-insurance: The percentage of coverage you are expected to pay yourself. For example, if the policy's co-insurance is 80/20 and the medical bill is $100, insurance would cover $80 and you would pay $20 until you reach an out-of-pocket maximum, then the insurance pays 100%.
Co-payment or Co-pay: Usually a fixed-dollar amount that you are required to pay to receive services. Typical co-pays might be $15 for a doctor visit or prescription, and $100 for a trip to the emergency room.
Deductible or Out-of-pocket: Amount you pay toward your healthcare before insurance begins covering eligible medical costs. As a rule, the higher the deductible, the lower the plan's premium and vice versa.
Health Maintenance Organization (HMO): Insurance program that requires the use of predetermined facilities and doctors. In other words, you may have fewer doctors to choose from.
Medical Underwriting: A process in which an insurer investigates and reviews your health history when you apply for insurance. The findings help insurers figure out the future risk of you getting sick, which affects how much you'll pay in premiums.
Preferred Provider Organization (PPO): Insurance program that allows you to choose your doctors and services from an approved list.
Pre-existing Condition: A medical condition or diagnosis that existed — or was treated — before your health insurance coverage began. It may affect whether you can get coverage.
Premium: Regular payments you make in order to have insurance coverage.
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Do you Feel Sick Just Thinking About Health Insurance?
by (USAA), posted July 2010
Archives: Money/Finance-USAA
