With insurance, everyone knows to shop deductibles. But with health insurance, you also want to look at the total payout for an illness and also for the life of the policy.
Be suspicious of premiums that seem too low. And beware of policies that give you lower premiums in exchange for limits on the number of times you can see a doctor or the number of hospital or lab-related services you're allowed.
The limited benefit plan issue "concerns me a bit, because if people aren't aware there are limits, it can end up costing them considerably more," says Praeger.
With a premium quote, "look long and hard if it looks cheap, because there is a reason," she says.
And beware of discount plans, Praeger says. Many are "out-and-out fraud."
More questions to ask when shopping
- What are all the restrictions with this policy? If you're not happy with the answers, tell your agent the type of coverage you want and have him shop it.
- Are your doctors and their hospitals included in your plan, including the closest hospital? "If they aren't, are you willing to make a change for a lower price?" says Praeger.
- Is there unnecessary coverage included in your plan? "If you're a 22-year-old male, you don't need maternity benefits," says Gibbs. "You'd be surprised" how companies bundle coverage, he says.
- Does the carrier have a policy limitation on how often it raises its rates? That low premium you're quoted "might change twice in the first year," says Flanagan.
- How long has the carrier been licensed in your state and is the license current?
Once you've narrowed your choices to a few options, check the carriers' financial solvency at A.M. Best. You also want to follow up and make sure each company has a good reputation with customers.
When you finally do select the winner, fill out the application carefully. "That application will look very different from what (an applicant) filled out for their employer" under group coverage, says Flanagan. It will be more complicated and lengthy.
"What we're seeing happening in some states is language on the forms that could mislead a person into putting in inaccurate information," says Praeger.
Since your continued coverage depends on the form, take your time and do it carefully. When you have questions, call the company and have them explain. Keep answers honest, and be prepared to produce copies of your medical records. Review any information the broker is sending on your behalf and make sure it's accurate, too.
Don't cancel any current health policies until you've been accepted into a new plan, the check's cleared, and you've reached the "effective date" (starting date), of your new policy.
Still not looking forward to the process?
"Don't be afraid of it," says Snow. "Take the opportunity to gather information. I know more now about health insurance than I ever did before."
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