Tips for Buying Your Own Health Insurance

My husband just got a new job offer. It's a great job, but buying their group insurance will cost us $650 a month for a family of four! We definitely can't afford that, so I checked into other options. Here's what I learned.

Compare Rates

There is a huge difference in rates between different insurance companies and different plans. You need to figure out how much coverage you need and how much you're willing to pay. In general, a higher deductible will mean a lower monthly rate. You need to balance the rate you pay against a deductible. If you can afford to take a high deductible, it would be worth it to pay a lower rate every month. It's easy to compare insurance rates on-line. Sites like http://netquote.com/ and http://ehealthinsurance.com/ make it easy to obtain information in minutes. I used netquote, and I started getting insurance quotes within the hour. But don't buy yet.

Talk to an Insurance Broker

Different states have different insurance regulations. It's important to talk to someone who is knowledgeable about the insurance laws in your state. The broker I talked to informed me that I live in one of the most regulated states, so it would be very important to stick with insurance companies that are underwritten in my state. He said that buying an out of state plan was worthless in my state. I wouldn't have known this, had I not talked to a local broker.

Another advantage of going through a good broker, is that they can go to bat for you if you have a dispute with the insurance company. Since you're not getting a policy through your employer, you won't have a human resources person to help you out, should the need arise. A good broker will be willing to act as a go-between to deal with the insurance company, should you ever have a dispute. That's another good reason to buy an in-state policy. It's easier for a broker to work with an insurance company on your behalf if he lives near the insurance company's main offices.

Compare Insurance Companies

Once you have a couple of quotes from a reputable insurance broker, you need to compare the companies. A good source of information is your state's Department of Insurance website. I was able to look up the number and types of complaints that were filed against the companies I was considering. I was also able to look at financial statements. I relied on information from my broker as well. He refused to sell insurance from certain companies, because of their bad reputation. He sent me to the Department of Insurance website for my state to back up what he said.

You need to decide which type of plan is right for you. An HMO, PPO, or traditional plan will likely be your choices. There is no one size fits all rule here. It will depend on how often you see your doctor. If you just want catastrophic insurance, a traditional plan may be your best bet. If you have a baby and need well-baby checks, an HMO or PPO might be the way to go.

Another very important thing to check is which doctors and hospitals are part of each plan. You don't want to sign up for insurance, only to find out you have to travel to the next county just to see a doctor. If you have a doctor that you currently see, call his office to make sure he accepts this particular insurance. Each insurance company should have a list of doctors they work with, but these lists are sometimes out of date. It never hurts to double check with your physician.

Finally consider the details of each plan. Do you need vision coverage? Prescription drugs? Is alternative medicine important to you? When the choice between two companies is difficult, these are the kinds of things that can make the decision easier.

Whatever you do, make sure you do get insurance coverage. It is much better to pay $300 a month out of your pocket for coverage than to have a 10 day hospital stay with no insurance coverage. Even if you can only afford to get a policy with a $10,000 deductible, it's better than not having any insurance at all.