Health care and health insurance have certainly become hot topics recently. Although there has been a lot of debate about the need to make health care available to all citizens of the US, many young people find it very daunting to get started with their own health insurance.

Despite the debate, if you are looking at purchasing health insurance for the first time, you need solid information and advice. Do not make a snap decision, as, unfortunately, this could be a costly mistake.

Firstly, you need to consider what type of health insurance you need and how much cover you can afford to pay for. It is possible to get a health insurance policy that covers you if you have to be hospitalized but offers no assistance for casual visits to the doctor. While this may be suitable for a young single person in good health, it is not suitable for someone with a young family.

This type of policy is a safety net if you have a catastrophic accident of some kind, that sees you hospitalized while you are put back together. But it is important to recognize that it will not cover out-patient care.

Also, what if you develop an illness that requires long term care and regular hospital visits? Will your policy cover this? Then there is the cost of medication: how will you afford that?

To avoid getting yourself in this situation, look for a health care package that offers you the widest range of features suitable for your age and health status at the best price. This means shopping around, asking the tough questions and making it clear you want the best deal available.

One way to minimize the cost of your heath insurance is to understand what deductibles are and how they work.

A deductible is the amount that you pay before your insurance provider starts paying. They have various names and are applied in different ways. For example, co-payment and co-insurance are also terms for deductibles. A co-payment is often a flat amount rather than a percentage that you pay before the insurance takes over the costs. So, a visit to the doctor may cost $50, but you always have to pay the first $10. If it is a flat fee, you are easily able to judge what a consultation will cost you so this is a desirable way to arrange the deductible.

However, co-insurance, although in reality the same idea as co-payment, is often set as a percentage and is frequently applied to medication. From the insurer’s point of view, this makes sense as consultations are reasonably stable costs but medication is extremely variable. If the cost of health insurance is high, one option is to set the deductibles high and the premium, the amount you pay each year for health cover, will come down.

But, as with other issues related to health insurance, the level of the deductible needs to be set with your particular medical history in mind. If you frequently consult a medical practitioner and have regular prescriptions filled, it may not be in your interests to set a high deductible. But if you seldom ever need to consult a doctor, and you are purchasing health of insurance for peace of mind, a high deductible will save you money for all the years that you maintain good health.

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Category: Finances
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