Quick Insurance Tips

When evaluating health insurance plans, the best way to do so is to look at the total price that you might pay when you add the monthly premiums with the costs that you might pay in deductibles, co-pays and other cost shares.  This means that often a low cost health insurance plan is often the most economical and provides the best coverage.

It can be a lot of work but the best way to evaluate health insurance plans is looking at what you would pay using three scenarios.

The first scenario should be one in which you have no medical expenses for the year.  In that scenario you would pay your monthly premium times twelve and nothing else.  Obviously in this scenario, the health insurance with the lowest monthly premium is going to be the best plan to have.

In the second scenario, you could look at how much you would pay if you had an accident or a disease that caused you to have very high expenses in your physicians office, pharmacy and hospital.  In this scenario, you would pay your monthly premiums, plus your full deductible, coinsurance, co-pays and or other cost shares.  The winner in this situation might surprise you.  Often the winner here is a moderate or a high deductible plan.

In the third scenario, you might look at what different insurance plans would cost you in a year where you had moderate expenses.  Again, add your monthly costs for the premium times twelve plus the costs of any money you would pay towards your co-pay and other cost shares.

Only after you have seen what your total cost would be in different scenarios should you decide on a health insurance policy to purchase.  The same plan is unlikely to win all of the “face offs,” however, this will give you a good idea of how much each plan really costs.

The above assumes that you have done your homework comparing companies and have excluded the “Dewy Cheatum and Howe” insurance companies.  Getting the best price will do you no good if the insurance company isn’t stable or doesn’t pay claims like it should.

Usually a low cost or moderately expensive policy is a better buy because the money you save in premiums will go a long way toward paying any medical bills that the insurance policy won’t cover.

The above strategy is the one that will help you find the best policy for your needs.  It does take more work, but you may save thousands of dollars each by doing the math to determine your overall costs in various scenarios.  The best policy may not be the one you thought it would be.