You know you need to shop for health insurance, but anticipating the potential cost for health coverage can be a scary experience. Rest assured, there are more resources than ever to not only inform you but help you to effectively shop for the right health insurance coverage that’s also affordable.
NetQuote can help you earn how the Internet has made researching and buying health insurance easier and more convenient for consumers, and how to receive and choose the best health insurance quote from competing insurance companies.
Whether you’re young or older, single or married, everyone needs to shop for health insurance at some point in their life. Being an informed shopper will empower you to find the right health insurance company and policy that fits your needs and budget.
Shopping for Health Insurance
It often comes as a rude awakening to look for insurance on your own, especially if you've been spoiled by years of coverage through your employer. If you work for yourself, retire before medicare kicks in, or don't have health insurance through your job, finding individual coverage that you can afford is as much a function of the state in which you live as it is the state of your health.
Some states have forbidden insurance companies from rejecting people based on the condition of their health. Others elected to go with a "community rating" system, which requires insurers to charge everyone the same rates, regardless of health. These laws are well intended but have often backfired, forcing some healthy people to pay more in insurance premiums than the monthly mortgage on a small house. And if you're in poor health, it's even tougher to find an affordable policy.
Spreading the risk
Insurance usually works because companies can spread their risk over a wide range of people. The healthy ones end up paying more in premiums than they submit in claims, and the difference helps to subsidize sicker people with more expensive claims. Healthy clients accept the situation because they usually pay lower premiums than higher-risk clients -- and they never know when they might become sick themselves.
But when insurance companies can't reject anyone or adjust rates based on risk, they end up charging everyone more. In 1993 Maine passed a guaranteed-issue law. Rates shot up dramatically because insurers could no longer price according to risk. The rising prices lead to healthy people to take their chances and drop their coverage, while sick people stayed on. To compensate, insurers then had to raise rates even higher. As the risk pools got worse, many companies decided it wasn't profitable to do business in the state and pulled out.
In New Jersey, everyone has to pay the same rate for similar coverage, whether you're a 24-year-old fitness instructor or a 60-year-old who has had quadruple-bypass surgery. That means everyone is able to buy insurance -- but hardly anyone can afford it.
A Health Insurance Shoppers Buyer's Guide
With state policies varying dramatically, there's no straight shot to finding affordable health coverage on your own. If you happen to live in Maine, Kentucky or Washington State, you'll have few choices of any kind. In rural areas, you can't always save money with an HMO because there aren't enough people to make it economical. Association plans, which sometimes offer good deals, are unavailable in several states. And your state may limit your options for raising deductibles or cutting back on coverage to lower the price.
But you have to start somewhere, so follow these steps.
- Use a health-insurance broker who knows your market. Brokers not only will help you shop for price, they'll also know if a company has a reputation for raising premiums or hassling policyholders who file claims.
- Check out prices on the Web. NetQuote.com can give you immediate quotes from several companies.
- Visit your state insurance department's Web site. You'll probably find a list of companies selling individual coverage in your state. The insurance department may provide shopping tips for your state, as well as insurance-company complaint records.
- Consider taking advantage of federal COBRA legislation if you have left a company that provided group coverage. If your previous employer has 20 or more employees, the company is required by law to let you continue your group coverage for up to 18 months. Some states have similar laws for smaller employers. You generally foot the entire bill yourself, plus up to 2% in administrative charges, which can increase your costs considerably.
COBRA coverage tends to be a good deal if you're in poor health or in a market with few choices, or you want to stick with your current doctors. But because group plans often have more bells and whistles than you'd buy yourself, you might find a better deal by shopping on your own.
- Join an association that has group coverage. Association plans tend to be more attractive in states such as New York that don't have many options for individuals. In states where there's more competition, they can end up being magnets for sick people, with spiraling prices.
If all else fails and you don't want to go without coverage, you may have to bite the bullet and get a job that offers health insurance as an employee benefit.
Learn how easy and convenient shopping for health insurance can be. Get your free health insurance online quotes today!