Insurance Tip #6: Choosing the right health care plan is a critical decision
Filed under: Insurance
This post is part of a series where personal finance expert Dan Solin provides 10 insurance tips no one else will tell you. See all 10, plus one bonus tip!You have many options for selecting health insurance. The one you pick may be your most important financial decision.
If you are covered at work, you may be able to select from various options. Check out the coverages and costs carefully. My advice generally is to focus on big ticket items. It may not be worth the additional premium to cover smaller costs.
If you need to purchase individual insurance, things get more complicated.
If you can afford the higher premiums, check out indemnity insurance. It lets you pick your own doctors and hospitals and to consult with specialists without being referred by your primary care physician.
Since indemnity policies often have a limit on lifetime benefits, be sure the cap is realistic. Personally, I would want a $2 million cap, but many experts believe $1 million is sufficient.
Most Americans have "managed care" plans. These plans are more cost effective, but they require you to see providers who are part of the plan network.
There are various kinds of managed care plans, including HMOs, preferred provider organizations and point-of-service plans.
As a general rule, HMOs are the least expensive option.
Finally, you need to be aware of coverage that you can direct yourself. These plans include:
For an excellent discussion of your health care options, check out this article.
I told you it was a mess!
See 10 more insurance tips from Dan.
Dan Solin is the author of The Smartest Investment Book You'll Ever Read (Perigee Books, 2006) and The Smartest 401(k) Book You'll Ever Read (Perigee Books, 2008).
Reader Comments (Page 1 of 1)
9-10-2008 @ 4:45PM
Anne said...
Personally, I would like to see ANY health care plan have a MANDATORY requirement to explain in CLEAR AND PLAIN LANGUAGE, what it covers, and doesn't cover, how much the cost will be for PREMIMUMS and for each COVERED item. Maybe a grid- like list of all PROVIDERS, and a comparison of what they each offer and the benefits of each over the other for the different age groups of consumers. It would look something like the CONSUMERS guide uses to compare consumer items.
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10-10-2008 @ 8:26AM
Ed Curtis said...
As an agent...I provide exactly that information and do not sell anyone that is not truly interested in the value and benefits they are buying.
9-08-2008 @ 2:07AM
whodatman said...
Well, you know... I read through a lot of this stuff and I realize that many of the options viewed have not relevance to the vast majority of average, working Americans.
"Health Savings Account"
"Flexible spending arrangement"
"medical savings accounts"
ad infinitum, yada yada...
What percentage of the actual workforce can realistically consider these options?
As a long-time Reagan Republican and Conservative, I have finally come to the conclusion that we must have universal health care.
Yes, I know all about the treats against universal health care, and how dire examples are drawn using the worst parts of the Canadian, or a western European county's health care system. I am aware that many say the quality of health care will drastically diminish, even to the point of doctors going out on strike.
Well, listen. We can make it work. We're Americans, and we have to make it work. The American model of a social security system has been an amazing success - a fact which would be abundantly self-evident had our seemingly self-annointed and "guardians of the public trust" elected legislators, and the robber-baron lobbyists/special interests not been trying to invent every loophole to justify illegal incursions into the program's trust fund over past decades.
Even if such a program would last during only 2 or 3 generations, the time has come for a universal health care plan. We have far too many uninsured and under-insured, and we are a caring, compassionate nation. How can we be blind-sighted to the critical urgency of this need?
Like millions of conservatives, I have been sorely disappointed in the performance of this present administration. I have seen how our national debt has gone to the outer-reaches of the stratosphere, too many families who have lost their homes, and people in the prime of life dying because of the lack of money for catastrophic health care costs - yet giant corporate interests attain higher and higher levels of profit.
Something is way off balance, here.
So, this year, the candidates of my both parties had better quickly commence with a clear and concise plan for addressing the lack of quality and affordable health care to every American, instead of trying to demean the motives or the qualifications of the opponent.
WPA, CCC, TVA, Social Security, etc. We did it before, and we can do it again.
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10-10-2008 @ 8:26AM
ejonah1 said...
He is wrong in at least one case...if you have kids that earn no income, you are still responbile for all the costs of final arrangments if something happens. If they are traveling, the cost can run as high as $25000 and a 100,000 poliyc is probably only $8 per month.
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