1. Affordability. Price is the last thing the insurance companies typically discuss, but it should be the first thing you consider. The most comprehensive plan is not going to do you much good if it drives you into debt. You need to be realistic about what you can afford, and work from there. Compare monthly premiums, but also factor in the annual deductible amount and co-payments for office visits, emergency room treatment, and preventative care such as mammograms and pap smears.
2. Continuity. If you want to continue going to your current doctor, your choice of an individual health insurance plan could be affected. All managed care plans HMOs (Health Maintenance Organizations), PPOs (Preferred Provider Organizations), IPAs (Individual Practice Associations), and POS (Point of Service) use a network of doctors. If your doctor is not in any network, your only option is an indemnity or fee-for-service plan. With an indemnity plan, you go to whatever doctor or hospital you want. For this flexibility, you pay a higher deductible amount and higher co-payments. In addition, the indemnity plan will only pay the usual and customary rates for various services and procedures. If your doctor charges more than those rates, you are responsible for making up the difference.
3. Health. If you are in good health, your insurance options remain open. If you have been diagnosed or treated for a medical condition, your choices may be limited. Insurance companies call such conditions pre-existing. The insurance company might decline to cover you altogether or choose not to cover the condition during a waiting period. Some states, such as New York and New Jersey, have laws requiring insurance companies to make coverage available to higher risk people, a practice known as guaranteed issue. Other states have created insurance pools to provide coverage to high-risk individuals who were denied coverage in the individual health insurance market.
4. Medication. If you are on prescription medications, you should compare the drug benefits of different plans. Some plans require you to meet the annual deductible before paying for prescription drugs. Others treat drugs separately. Almost all plans require a co-payment for medication, but the amounts of the co-payment vary from plan to plan. Some plans cap the amount they will spend for prescription drugs in one year. Insurance companies also create formularies of approved drugs. Some insurers offer different rates of coverage, or tiers, depending on whether you use generic drugs, preferred brand-name drugs, and non-preferred name brand drugs.
5. Health Savings Accounts. You might be able to reduce the cost of your health care by taking advantage of a Health Savings Account, a federal program that allows you to use pre-tax dollars to pay out-of-pocket medical expenses. This program increases the buying power of your medical dollars by up to 45%, depending on where you live and on your tax bracket. For example, if you live in California, you could be paying 9.3% in state income tax, 28% in federal income tax, and 7.65% in Federal Insurance Contributions Act (FICA) tax. Your annual contributions to an HSA account up to $2,850 for an individual and up to $5,650 for a family are sheltered from these taxes as long as you spend them on medical expenses or withdraw them after retirement. The HSA funds can be invested, and the earnings are tax-deferred, just like an IRA. To qualify for an HSA, you must enroll in a qualified High Deductible Health Plan (HDHP). This is health insurance with high deductible amounts. The minimum deductible in a HDHP plan is $1,100 for an individual and $2,200 for a family. Because the deductible is high, the monthly premiums are low. When you combine the low premiums with the increased buying power of the HSA funds used to pay out-of-pocket expenses, an HDHP plan could give you the best value for the money.
By focusing on these five areas, you should be able to narrow down your choices and quickly find the plan that is best for you.
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