Health insurance is a vital necessity, as each year the cost of medical care goes up without paying any attention to the unmoving wages of the average worker. But health insurance isn’t always an affordable product either, and no matter how necessary it is—if a family or individual can’t afford it, it’s a non-issue. Many people ask how to find the best deal on health insurance, wondering if it’s even possible to find a good, affordable deal nowadays—and lucky for you, it just may be.
The Two Types of Health Insurance
There are two ways that you can buy health insurance; as an individual or as a member of a group. Here is an overview of each type.
Why Group Policies May be the Cheapest Option
Group policies are often less expensive than individual policies because insurance companies underwrite group policies based on the experience of the group as a whole rather than looking at the health history and risk brought on by each individual within the group. So instead of looking at your individual medical history, they consider how many claims were experienced by the entire group versus how much is paid in premiums by the group. This is helpful in reducing costs because if you have a larger group of people paying a premium, some of whom may get sick and need to use the policies and some of whom won’t, then the premiums paid by those who never use the policy helps to balance out the expenses of those who do.
When trying to find the best deal on health insurance, try to find out if there are any group policies that you are eligible to take part in. Look first at your employer and your spouse’s employer. Next, check out fraternal and alumni groups, union groups that you are a member of and—if you are a small business owner—your local chamber of commerce. It isn’t always easy to find group health insurance coverage outside of an employer group, but there are avenues to explore.
Finding the Best Deal on Individual Health insurance
If you are not eligible for any group policies, your next stop is to look at individual policies. With an individual policy, the insurance company underwriter is going to look into your individual health history in order to determine the cost of your policy. If you are someone with a chronic illness, this could mean that you are quoted very expensive rates as the insurance company perceives you as high risk based on your past health history and your anticipated future needs, which are likely to get more intense as you age.
The first step in making sure you find the best deal on individual health insurance is to compare the quotes of many different health insurance companies. Be sure to compare apples to apples and look at similar benefits, deductibles and limits so that you get an accurate comparison.
The next step is to consider whether or not you should consider a policy with a high deductible. Deductibles are the out-of-pocket obligations that the insured takes on. In other words, it’s the amount of money that you must pay out of your own pocket before the insurance company benefits kick in. For some individuals, those without chronic illnesses, a high deductible plan may result in lower overall expenses because they will have a lower premium and no need to pay anything out of pocket. For individuals with health concerns, it could still end up saving them money by combining a low premium with pre-negotiated treatment pricing.
Before you write off health insurance as too expensive, it is vital that you explore all your choices. Such an important coverage should be thoroughly explored so that you can hopefully find coverage that works for your health and your budget.