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Tips on Buying Health Insurance

By Jeff Brown
Everyone knows that getting health insurance on your own, without an employer’s help, is next to impossible. And if you can actually find a policy, it might just bankrupt you.

Well, as the old song says, “it ain’t necessarily so.” Millions of people who are self-employed or aren’t covered at work get insurance privately, as plenty of insurance companies offer health insurance for individuals and families.

If you’ve ever had a good policy at work, you’ve probably been told it costs a fortune, maybe $15,000 or more per year for a small family. And many of us assume the same policy would cost even more to get on our own.

But the priciest work-based policies tend to be deluxe versions that pay for just about everything.

If you think you won’t need much medical care and are willing to risk large out-of-pocket expenses, you can trim the cost substantially. In this case, the policy mainly protects against catastrophic expenses, like a battle against cancer, while you essentially pay for routine care yourself.

Some of the big-name health insurers include Aetna Inc. (Stock Quote: AET), UnitedHealth Group (Stock Quote: UNH) and Humana Inc. (Stock Quote: HUM).

The Insurance Center has information about three insurance-shopping services. One of them, eHealthInsurance, recently found 10 plans to cover a three-person family, with two, 50-something parents and a teenage son. Monthly premiums ranged from $331 to $953.

The difference involved out-of-pocket expenses. One of the big costs was the “deductible,” or a set amount of healthcare costs that you, the insured, are required to pay each year before the insurance takes over. Others include “co-payments” and “co-insurance,” which are amounts you might have to pay even after the insurance kicks in -- though there also may be a maximum out-of-pocket limit you’ll never be required to exceed.

The $331 policy has a $5,000 deductible. Coinsurance is 20 percent, meaning that after paying the first $5000 for annual medical expenses, you would still have to pay 20 percent of any covered costs, while the insurer would pay 80 percent. The policy does not pay for routine visits to the doctor’s office.

In comparison, the $953-per-month plan has no deductible, though co-insurance is slightly higher at 35 percent. Your share of office visits would be capped at $35.

In the end, a family that expects good health could save money by selecting the first policy, and paying about $600 less per month. Because you could end up paying more than $5,000 a year, the cheaper policy’s main purpose would be protection from catastrophic expenses, rather than savings on run-of-the-mill illnesses and injuries.

The more expensive policy might be better if you are worried about facing big medical bills every year.

As with any financial product, it pays to read a health insurance contract very carefully, and to not rely on any oral statements from an agent or salesperson.

Among the key questions: If a family member contracts an expensive, long-term illness, will the insurer be able to cancel your coverage? With the best policies, continued coverage is guaranteed so long as you keep paying your premiums. But you also need to be sure the premium cannot skyrocket.

For some additional tips on minimizing costs and getting insurance for a gap between jobs, check out’s Insurance Center.

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