insurance

Life after a layoff: health insurance

Next, make a list of coverage options that are important to you. Do you want access to specific doctors or facilities? Do you need low-cost prescription refills? How much do you want to pay for a doctor visit? Are you just looking for a high-deductible policy to cover catastrophic situations? Do you want access to alternative therapies?

Now contact the companies on your first list and see how their coverage matches up with your wish list. Look at four things: how much are premiums, what will the policy cover, what will it exclude and how much is a doctor visit.

Before you sign up, research the stability and service reputation of your picks.

Several companies study the financial strength of insurance companies, HMOs or both. A few of the top ratings firms are Standard and Poor's, A.M. Best, Moody's Investor Service and Weiss Ratings.

If you want to know how a prospective company stacks up on the customer service end, check out its ranking with the four major accreditation agencies: the National Committee for Quality Assurance, the Accreditation Association for Ambulatory Health Care, the Joint Commission on Accreditation of Health Care Organizations and URAC, the American Accreditation HealthCare Commission.

They can give you the Cliff's Notes version of what to expect. For example, NCQA, an independent nonprofit agency, conducts regular member-satisfaction surveys and grades each company on service and care.

The ugly truth: You may have had group insurance through your employer for 20 years and not be able to buy an individual health insurance policy.

A recent study by the Kaiser Family Foundation found that relatively healthy people shopping individual policies are denied coverage or face exclusions for such routine conditions as hay fever or pregnancy. And while a company can't drop you if you get seriously ill, it can raise your premiums until you can't afford the policy.

The rule with individual insurance: you pay more, you get less. Conversely, group policies "tend to get more bang for the buck and avoid the problems of the individual market," says Shearer.

If you can't afford COBRA and don't have a spouse, an individual policy may be your best choice. Read the fine print, shop smart and know your state regulations.

Option 4: State-sponsored plans

What if your former company is too small to qualify under COBRA or the company's gone under? You may be eligible for a state insurance pool.

Under federal law, every state must provide this choice, sometimes called a high-risk pool. In theory, you pay the premium and, in turn, reap the reward of group coverage. You can also use a state pool if you exhaust your COBRA coverage -- usually after 18 months -- and still don't have another job. But the jury is still out on whether the plans are a hit -- or a miss.

"High-risk pools have not been a tremendous success story from our point of view," says Shearer, citing high premiums for limited coverage, waiting lists and only an estimated 100,000 people in the pools nationwide. "The picture's not pretty."

Kids only

Every state also has a low-cost health insurance plan for children. You don't necessarily have to have a low income to qualify. If you have children under 18, ask about the plan when you talk to the state insurance commissioner's office.

A national toll-free number, (877) KIDSNOW, will connect you with the children's insurance program in your state. Children are eligible up to age 19.

Option 5: No insurance

Joining the ranks of this country's 42 million uninsured is not a good option. Going without insurance puts both your physical and financial health in peril, as medical bills are the fourth-biggest reason people go into serious debt, according to statistics from the National Foundation for Credit Counseling.

If you can't afford anything else, at least pick up a catastrophic insurance policy. While it won't cover every doctor visit -- or be as cheap as you might expect -- at least you won't be wiped out if you or a family member become seriously ill.

Before you make any decisions, evaluate your financial and health situation, do the research and see what coverage choices are available.

"You have to take your time to understand what you are buying," says Fronstin. "It's not hard to do if people are willing to make the investment."

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