Health insurance can be an evolving beast that’s complicated to understand and changes with the weather. With each new administration, it seems as if the rules change, as does the coverage.
That’s not all. Each individual state and local areas have different types of insurance. Which is the right type for you and your family? What will your coverage look like? How high is the deductible?
The issue can get so complicated (and expensive) that a large portion of the population just throws their hands in the air and decided not to get coverage at all. Obamacare tried to weed those people out by fining them, but it didn’t matter. To their own detriment, many millions of Americans still do not have health insurance.
In fact, 62% of bankruptcies are because of medical bills. That’s a scary situation to put yourself in. Bad things happen all the time and it’s essential to protect yourself for when it does. Here are three things you need to know about managing your own health insurance.
1) Know Your Budget Before Going In
One of the best ways to know which coverage is best for you should be dependent on your budget. According to a Consumer Expenditure Survey, most Americans spend about 5% of their income on health insurance. That’s somewhere around the mid-tier or “Silver” plan. What you do from there is up to you.
If you make a bit more money, then the best option might be to spend a little more on the premiums so your deductibles aren’t as high if you need to use your insurance. If you can’t afford that, then understand your deductible will be higher. Whichever option you choose, knowing what you can afford beforehand is the best way to go.
2) Know Your Options and Compare
After you know what you’re able to spend on health insurance, it’s time to look at the different options and compare different plans to see what fits your needs. As of right now, there are four categories: Bronze, Silver, Gold, and Platinum. Each one has varying benefits at increasingly expensive rates.
But prices are only just the beginning. You will have to look at the doctors in your area. What insurance do they cover? What are you able to do with that insurance if you need other types of care, like dental and vision? There are a lot of network types as well, like PPO, POS, HMO, and EPO.
You might find that there’s only one type that’s universally accepted within the networks in your area. Others have limited coverage or might even charge you more money if you venture outside the network.
3) Know What Your Needs Are
The worst thing you can do is choose an insurance plan solely based on price, but then find out later it doesn’t cover nearly as much as you thought it would. Needs can come later that you weren’t prepared for. You can know the future, so it’s best to be reflect the needs you have.
For example, will your kids need braces? Glasses? Do you need to visit a chiropractor for medical reasons? Do you take a lot of expensive medications? Are you fully covered in the event you end up missing work due to an accident or prolonged illness?
Some people rarely use their healthcare and haven’t stepped into a doctor’s office in a decade. Others make sure they get monthly check-ups. What we use and what we’ll need vary from person to person. Does your employer have an FSA (or Flexible Spending Account)? Would a HAS (Health Savings Account) help you more if money is tight?
With these three steps in mind, don’t just decide one day that you need health insurance and immediately jump online to apply. Instead, take a lot of notes. Think about future needs more than financial burden, as medical bills can bankrupt you if you’re not prepared.