Health insurance is a necessary purchase. Living through the global pandemic, we have all seen the urgency of access to proper health care. This access has already proven to be a genuine lifesaver for many of those we know and love.
There are so many things to consider before you commit to insurance. For example, do you need a unique cover based on your occupation? Also, what are the options for health insurance for US citizens living abroad? Today we invite you to join us to explore the eight factors to consider when choosing health insurance.
8 Factors to Consider for Health Insurance
Drug Coverage
Different health insurance plans focus on various consumer needs. By limiting certain benefits, these plans can offer those not in need of said benefits better rates. You will find that this introduces a problem when choosing a health insurance plan, though.
When shopping for plans, don’t only take the cost into account. Take a closer look at what the plan really offers you. For example, one of the first benefits that health insurance plans usually sacrifice is comprehensive drug cover.
While limited drug cover may work for some, you need to decide based on your needs. Opting for a more expensive plan that does offer you adequate drug cover could save you thousands of dollars in the long run.
In-Network Providers
Health insurance providers use a network of medical care professionals to save costs. At first, this may seem frustrating, but it is sensible that it does benefit you, the consumer. By using in-network providers, insurance companies can arrange for lower prices.
This is a primary function of economic buying power. As a result, you, the consumer, benefit from a lower insurance plan fee. The caveat is that you have limited options in choosing your medical care providers.
Before committing to a health insurance plan, make sure that you are comfortable using the in-network medical care providers covered by your plan. These include doctors and specialists, pharmacies, as well as hospitals.
Is it Deductible?
This is not so much a matter of deciding on which health insurance provider you plan to use. Instead, the IRS offers tax-deductible incentives to specific income groups to help make health insurance affordable.
The amount that you can deduct depends on your income. Those with a lower income may be able to deduct a more significant percentage of their health insurance premiums from their taxes. To find out more about the deductibility of your health insurance and whether or not you qualify, visit the IRS website.
Excess Payments
Excess payments are one of the more divisive practices in the health insurance industry. You may feel that it is a bit of a scam, given the fees you already have to pay on your monthly premium. However, there are two primary, less advertised reasons that health insurance companies charge these excess fees.
One is that the procedures and treatments you need may exceed the budget of your health care plan. The other is that these excess payments are meant to decrease the number of frivolous claims. In other words, if you have to pay for a medical service, you are less likely to do so unless it’s indispensable.
However you feel about excess payments, be sure and enquire what you stand to pay in excess fees before committing to a health insurance plan.
Perks
Health insurance plans are a consumer product when you get down to it. While they provide an essential service, they still operate as a product within a free market system. Because of this, you may find that certain providers offer consumer incentives or ‘perks’.
These perks serve a secondary function. The healthier you are, the less likely you are to cost your health insurance provider money. Hence, the majority of these perks are centered around health and well-being. They include things like gym memberships and free counseling.
Look into HSAs
HSAs or health savings accounts are a kind of rainy day savings account for medical emergencies. They sound a little silly at first. Why use a dedicated account when you could just keep the money in an easily accessible savings account?
Well, that is because it is so easy for you to access money in a savings account. In a non-medical emergency, you may be forced to use money from a general savings account to cover various expenses.
A dedicated HSA can only be used for medical care. This is a sort of nest egg for your health, and as it grows, you have surety and peace of mind that should you have to pay any hefty excess fees, the money is available to you.
Ratios
You may be thinking, ‘that sounds a bit out of place, ratios?’ However, understanding specific statistics can help you better grasp the kind of experiences you may have with a particular health insurance provider.
The most important are claim ratios and solvency ratios. These two metrics tell you how often claims are submitted to the provider and how frequently claims are paid out. The closer these to statistics, the better.
Premiums
We have gone into a couple of the factors that contribute to premiums. We have also touched on a few factors to consider before accepting a premium. Finally, let’s look at deciding on a premium.
At the End
Before you make any decisions, you want to ensure that the health insurance plan covers all your needs. The tighter your budget, the pickier you will want to be. Choose the basics, the things that would be hard to cover otherwise.
Remember that it can be better to pay a bit extra and have the peace of mind to know that you are covered for specific medical concerns.