What To Do If Your Job Doesn't Offer Health Insurance : Anna Vander Broek

Thursday, August 20, 2009

How to find the insurance policy that's right for you.

Whether they like it or not, a growing number of Americans will be taking into their own hands the task of insuring their health. That's the gist of a survey showing that nearly one in five employers plan to stop offering health benefits over the next three to five years, according Hewitt Associates ( HEW - news - people ), a global human resources consulting firm. Among employers who continue to offer benefits, doing so will mean grappling with a 9% increase in medical costs next year alone, as forecast by PricewaterhouseCoopers.

Whether it's now or some time in the future, there's a good chance that at some point you will face the need to insure yourself. Yet one-fourth of adults between the ages of 25 and 34 go without health insurance, because of costs or the sense that they don't need it.

No matter how young and healthy you are, consider health insurance a must. A single visit to a hospital can cost thousands of dollars and have dire consequences for your financial health. "You could potentially run up a huge debt that could take years to pay off," says Devon Herrick, a health care economist and senior fellow at the National Center for Policy Analysis in Dallas.

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The lack of insurance will affect the quality of care you receive if you do have to go to the doctor. Emergency rooms are legally required to provide you with "stabilizing care," but if you're not in a life-threatening situation, the hospital doesn't have to take you in as a patient. Even if it does, those without health insurance are often charged far more than insurance company patients pay for the same treatments.

"These are often double or triple what insurers would pay," says Herrick.

What's more, if you are uninsured and your ailment is not life-threatening, you may be told to take your chances at a free health clinic or be stuck waiting for treatment until you can pay for it yourself.

If your employer doesn't offer health benefits, consider the insurance options available to individuals.

Premium vs. Deductible
Premium and deductible are two important words to understand when reviewing health insurance plans. Your premium is how much you pay the insurance company each month. Your deductible is the amount of money you have to pay on your own before your insurance company begins covering your costs.

Say you pay $60 a month for a policy with a $5,000 deductible. You break your leg skiing, resulting in $10,000 worth of bills. You will be on the hook for the first $5,000 and then your insurance will kick in and pay the balance.

There is a direct relationship between premium and how well you're covered: you pay less money if the insurer accepts less monetary responsibility for your medical costs, and vice versa. When you're young and healthy (and broke), consider paying less each month for a higher deductible.

When making a decision about what kind of insurance plan to buy, think about your lifestyle and medical history. If you have no serious health issues that you're aware of, and do not partake in a lot of risky pursuits, consider paying something along the lines of $60 a month for a policy that only kicks in after you've paid several thousand dollars yourself out-of-pocket. If you are an avid rock climber, have a family history of medical problems or couldn't shoulder the financial burden of big medical bills all at once, consider paying a higher premium for a lower deductible.

You're Only Young Once
Health insurers consider several risk factors in determining how risky it is to cover you. That includes the state you live in, your gender, medical history, current health (for example, if you're a smoker), and your age.

"The good thing about being a new graduate is you tend to be very healthy, so your costs tend to be pretty low," says Herrick.

The time to buy insurance is before you get sick. If you're uninsured and have a medical problem, insurance companies will most likely declare it a "preexisting condition" and refuse to pay for any treatment related to it. Once you have insurance, however, there are legal limits that prevent insurers from suddenly canceling your coverage.

Shopping Around
A great place to begin is online. Check out insurance-comparison sites like EasyToInsureME.com which offer quotes for competing plans.

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