How to Buy Health Insurance

Fran
Fran Majidi
July 9, 2020

Are you new to buying health insurance? Many people who’ve lost their jobs since the coronavirus pandemic started are considering buying private health insurance that is not tied to their employer. You may even save money if you’re on Cobra by switching to a commercial insurance plan during Open Enrollment. Cobra is convenient but it’s not cheap.

You may be paying more for health insurance than you need to, if you’re not comparing rates. You may also be on the wrong plan and paying too much if you’re not considering all the out-of-pocket expenses you’ve had over the past year. Several factors affect how much you spend on a quality health plan. For instance, you may currently have a high deductible plan and end up paying all your own medical costs. Maybe you will save if you switch to plan with a higher premium and lower deductible. It’s important to do the math and see if you save more money over the course of the year by paying a little more each month. Or vice versa.

No one said that it’s easy to figure out which plan works best for you, but we can help. Once you’ve gotten everything you need in order to start making important health insurance buying decisions, compare rates on health plans here. Let’s take a look at how to buy health insurance.

Should I Buy Health Insurance at Work or Buy Private Health Insurance?

This is a very common question and difficult to answer. One obvious benefit to buying health insurance through an employer is the shared cost of group plans. Your employer would pay part of your premium each month. In some companies, your entire health insurance premium is paid for, though this is rare. Yes, chances are that you’d save quite a bit of money if you buy insurance through work. But not always. Find out exactly what percentage of your healthcare costs the employer will provide.

Another advantage of buying a group health plan vs an individual health plan is that your health insurance premiums are deducted from your paychecks pre-tax and therefore save you some money.

If you want to buy your own individual health plan, however, you can negotiate a higher salary, expressing that you do not require health insurance through your job. Now, why would you do that, you’re asking? Here are some reasons people buy individual medical insurance for themselves and/or their families.

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Reasons to Buy an Individual Health Plan

It’s Not Tied to Your Job. And neither are you! Some people don’t want to have to keep switching plans and doctors each time they bounce jobs. If you change jobs every few years, you may have to change your network of providers too, based on the health plan you buy. If you’re the drifter type or your industry has a high turnover, buying a private individual health plan may be right for you.

Even if you stay at the same company for years, they may offer different health plans the next year. You will most likely pay a little more for health insurance if you buy an individual health plan, but you may be able to negotiate more pay from your employer. Maybe the cost is worth it to maintain a never-changing health plan you’re comfortable with and don’t want to change.

You Can Choose. You can choose the insurance company or the plan that meets your specific needs. You may be aware of the cost-saving potential of a specific plan that a friend or acquaintance has. Or, maybe you want to stay with the insurance company you’re currently with but plan to switch jobs. Yes, you can keep your plan!

You can also choose a plan or insurer based on your doctors. If there are certain providers that you want to keep, find out which insurance plans they accept before you compare health insurance quotes.

You can also choose how much coverage you want to buy. If you’re in your 20s and have had no health issues in the past couple of years and see no reason to see any specialists in the near future, you don’t need expensive insurance, just something in case the unforeseen happens so that you’re not left picking up the whole tab. With that said, healthy young people often go without any health insurance at all and find themselves medically bankrupt after sustaining injuries in accidents or sudden onset of an illness.

If we’ve learned anything from the coronavirus, it’s that we all need health insurance, just in case.

If you’re 55, you may save money by buying a silver or gold plan because you may see one or two specialists at the very least and you may have an existing condition that requires several provider visits a year.

Here’s more information about the health insurance tier-system so you can make the best decisions about your health care.

If you’re 65 or older, consider your Medicare options by entering your zip code.

You May Save. There are affordable individual health plans out there, and if you negotiate for more pay from your employer in exchange for buying your own health insurance, you may be ahead.

Also, some people qualify for a subsidy from the federal government because they are low-income, disabled or unemployed. It’s important to find out what you’re eligible for, based on your annual earnings. The Affordable Care Act-compliant individual plans are designed to help you save money based on eligibility. The requirement for subsidized health care is that your household income cannot exceed 400% of the federal poverty level. For an individual the federal poverty level is $12,760 and less; for 2 people it’s $17,240 or less; and for 3 people it’s $21,720.

You can save the most if you compare affordable health insurance plans. As mentioned earlier, there are many factors that determine the price of an individual or family plan, one of them being where you live. Health insurance costs vary from state to state. The U.S. average cost of buying your own health insurance is roughly $4,700 a year. But the price differs dramatically from one area to another. An employer sponsored plan averages at about $6,500 a year. You may be thinking that the employer group plan costs much more, but remember that you do not shoulder the entire cost.

What Else You Need to Understand About Health Insurance

You will be required to pay a monthly premium, much like car insurance. However, depending on the type of insurance you have (HMO, PPO, etcetera), you will either pay for doctors visits out-of-pocket until you reach the deductible amount or you must pay a co-pay for each visit.

Every plan is different so it’s important to work with a trustworthy agent who will help you avoid comparing apples to oranges when comparing health plans. What’s the cheapest monthly premium may not be the most cost-effective solution for you in the long-term so be careful and be prepared so you know how you will be paying doctors beginning January. Whatever you do, get insured!

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