With the rising cost of health care, it's becoming increasingly common for employers to discontinue coverage. In fact, at least 400,000 Michigan residents will purchase their own insurance this year. Two short years from now, this number is expected to surpass the one million mark, as an estimated 30 percent of small businesses cease coverage due to health care reform.
If you're like most working adults, you're entering uncharted territory. The majority of us have never had to worry about finding and funding our own health insurance, and the impending reality is daunting. The key is to be a savvy shopper when it comes to individual health insurance. I assure you, with some guidance, you can take guess work and stress out of the process.
Analyze your health and habits
Before you can determine the type of coverage you need, analyze your health care habits. Write down how many doctors' visits you typically have a year and factor in whether you see any specialists. If you're buying for your family, account for their visits as well. You can't predict the future, but you can plan based on history.
It's quite common to scale back coverage when you're paying for it yourself. Someone who selected the most comprehensive employer-funded plan may re-evaluate their individual selection based on true needs.
Research and select wisely
Once you know your habits, it's time to find a plan that fits. Most health plans outline their options and let you apply online. If you are more comfortable speaking with someone directly, call customer service or work with an agent.
Most agents work with a variety of health plans so they can easily review the pros and cons of each, facilitate the selection and application process, and serve as a liaison between you and your health plan. Plus, your health plan pays the agent's fee, so there's no need to worry about cost for this service.
When you evaluate health plans, keep the following in mind:
n Ensure your plan includes the basic benefits, including prescription drug coverage and preventive care.
n Decide how you want to handle co-pays and deductibles, and request a clear cost breakdown for each.
n Make sure your physicians are in-network. Coverage for an out-of-network physician is typically 60 percent, versus 80 percent for an in-network physician.
n Evaluate the strength of the health plan. Is the company financially stable? Does it have a good reputation?
n Ask about service. Do members frequently have trouble processing claims? Is customer service helpful?
n Request a list of value-added programs and services available to members. Special classes and online tools are a nice supplement.
n It isn't uncommon for some health plans to lure you with a temporarily low premium, then raise it the following year. Ask for the company's rates over the past five years and look for sharp spikes.
The National Committee for Quality Assurance (NCQA) ranks and accredits Michigan health plans. To see how each plan stacks up, visit ncqa.org.
About the author: Ray Sohn is director of individual markets for Grand Rapids-based Priority Health and is responsible for product development, business analysis, sales and underwriting related to the health plan's individual market segment.
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