When shopping for health insurance, there are a few things to keep in mind that will make the process as smooth as possible. To begin, make sure you do not have any serious medical conditions that will prevent you for obtaining coverage from major medical companies.
What are some serious major medical conditions that will prevent you from obtaining coverage? Diabetes, Heart Attack, Stroke, Cancer, etc are the major conditions which will prevent you from getting a policy. If you currently have these conditions, please do not waste your time applying for a major medical policy because you will not be approved. Instead you should visit the website healthcare.gov. This website will provide you state specific information for individuals who cannot obtain coverage because of major conditions.
What if you don’t have any major medical conditions and you and your family are relatively healthy? Well, in that case you can start shopping for health insurance. The internet is a great place to start. Why? Because you are able to compare the rates and coverage of all the top rated health insurance providers in your area to find the best rate possible. When searching, make sure to only focus on the top rated providers like United Health Care, Humana, Aetna, Assurant, Blue Cross etc. These are companies you have heard about, companies that maintain top ratings, have competitive rates, and have great coverage. Compare them side by side and find who has the best rates in your particular area.
Now that you have an idea of where to begin your search and what companies to focus on, you must decide what type of plan will work best for you and your family. To understand this, let’s spend a little time talking about the basic structure of a major medical policy. A typical major medical insurance plan with have a Deductible, Copay, and Co-insurance. A deductible is the amount that you would be responsible before your health insurance policy will go into effect. Common deductibles are $10K, $5K, $1K.
A copay is a flat fee that is charged when you visit a doctor or get prescriptions. A common copay is typically $25-$35 dollars per doctor office visit. Make sure to find a plan that includes unlimited doctor visits with a copay. The reason for this one can never predict exactly how many times you may have to go to the doctor in a given year. Why take the chance? You will get more piece of mind knowing that you and your family cause visit doctors as many times as you like and you are only paying $35 per visit. Copay will also kick in with prescriptions. Usually for generics, your best bet is going to Wallmart or Target as most of their generics are $4. For brand names, a typical copay is usually $35 per prescription after a small deductible of around $200, and this depends on the provider you select so make sure to read the plan details very carefully before you make a purchase.
Co-insurance is another important aspect of a major medical insurance policy. You will typically find co-insurance in three different forms. 70/30, 80/20, and 100%. Co-insurance is the percentage amount that you will be responsible for after the deductible. If you have 70/30 co-insurance, that means that you will be responsible for a max out of pocket of $5,000 after the deductible. If you have 80/20 co-insurance that means that you will be responsible for a max out of pocket of $3,000 after the deductible. If you have 100% co-insurance, that means that you will be responsible for 0 out of pocket after the deductible.
To sum up, knowing what your deductible and co-insurance is will give you the MAX OUT OF POCKET total on the policy. This is one of the most important factors when choosing your insurance. You have to know exactly what the worst case scenario maximum amount you would ever be responsible for. Let’s go over some examples to show you how this would work.
Let’s say that you were hospitalized and you incurred medical bills totaling $100,000. Let’s also say that you have a $5K deductible with 70/30 co-insurance. What is your max out of pocket on this plan? Or in other words, what is the total amount that you will be responsible for with a hospital bill of $100K? In this particular example, your max out of pocket would be $10K. How did we arrive at this total? It’s simple. Just take the $5K deductible and add it to $5K for the 70/30 insurance for a total max out of pocket of $10K.
What happens if that $100K hospital bill turned to a $500K hospital bill because you needed more surgery or had to stay another month in the hospital? How much would you be responsible for then if you had the same $5K deductible and 70/30 co-insurance? Your maximum out of pocket responsibility would still be a total of $10K!
This is one of the greatest features of a major medical insurance plan. Once you meet your max out of pocket total, that is all you would ever be responsible for even if your hospital bill is millions of dollars. A major medical insurance policy gives you UNLIMITED coverage once you meet your maximum out of pocket expense. That is why it is so important to understand your deductible and co-insurance before you make a purchasing decision.