Financial Literacy - Families and Finance
insurance
Keep kids covered -- with health insurance

Individual or family policies with high deductibles -- the annual amount you must pay out-of-pocket before benefits kick in -- are often cheapest and come with tax benefits. The IRS lets you invest money on a pre-tax basis in a health savings account that can be used to defray health care costs. To be eligible for an HSA, the deductible for individual plans must be at least $1,150 and no higher than $5,800; the deductible range for family coverage is $2,300 to $11,600.

As a stopgap measure, parents might consider getting coverage only for the kids. After all, if they're not insured, it may not be wise to let them participate in school sports or even play outside, lest they get an injury that requires an emergency room visit or worse. On the other hand, restraining their physical activities could also adversely affect their health.

"For a family and people in good health, and you can even get plans for just children or young adults, they can even be more affordable as long as there are no health issues. In fact, plans for young children can be as little as $40 a month," says Baker.

"And there are quite a few that are under $100 a month. That is important to get some coverage, certainly for their children. Take the time to look at individual health insurance," she says.

When evaluating individual or family health plans, parents should take cost into consideration, but they shouldn't rule out policies that may be slightly more expensive since they may offer many more benefits. That's where a health insurance agent that specializes in individual policies can be very helpful.

For starters, check out the "Consumer Guides for Getting and Keeping Health Insurance," written for each state by the Georgetown University Health Policy Institute.

The individual policy world has been mostly taken over by Web sites, according to Baker. As an example, InsureMe, a Bankrate company, offers online leads to health insurance brokers.

Newly jobless

For parents who just lost their jobs and with it, their health insurance, COBRA may be an option to explore.

Typically COBRA coverage is very expensive -- it's an extension of the coverage you had with your employer and is priced at that group rate. Because there are usually some less healthy workers thrown into the bunch, group coverage can be more expensive than an individual policy would be for healthy people.

However, as part of the stimulus bill signed earlier this year, COBRA was temporarily made more affordable.

Workers laid off between Sept. 1, 2008 and Dec. 31, 2009 who are eligible for COBRA will not have to pay the full premium for their first nine months on COBRA.

COBRA can be the best choice for individuals or family members of the insured who have pre-existing health conditions, particularly if they're expensive conditions.

But if all your family members are healthy, it may be worthwhile looking into purchasing a health insurance policy on your own. A high-deductible individual or family plan coupled with a health savings account may serve as a temporary solution -- at least until universal coverage becomes a reality.

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