How to Compare Private Health Insurance Plans
Private health insurance plans are generally more expensive than group health insurance. However, if you need health insurance and a group health plan isn't available, you'll need to know how to compare individual or private health insurance plans. Depending on where you live, your choices may be limited, and your premiums may be anywhere from two to five times the cost of group health insurance.
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Instructions
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Check coverage and assess your needs. Make sure that you are very thorough in terms of what you need and what you do not need for coverage. Make a list of all of the types of care that you use or would use under your health insurance plan. Then compare this with the coverage that's available from various insurance companies. It's a good idea to know what is covered and what is not. For example, if you use or expect to use a prescription drug plan frequently, you will want a plan with good prescription drug coverage where out-of-pocket costs will be affordable over time.
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Check out-of-pocket costs. The total out-of-pocket costs can make a huge impact on how affordable your health insurance ultimately is. A high-deductible plan, for example, will have low out-of-pocket costs if you don't use your insurance very much. But it can become quite costly if you see a doctor on a regular basis—and if you never meet your deductible or doctor's visits are excluded from the deductible. Co-insurance can also drive up out-of-pocket costs while making the premium payment look lower than premiums for other plans. Calculate what the maximum out-of-pocket costs are for your plan, and think about the worst possible cost scenario.
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Check the availability of providers and services in your ZIP code. Not all insurance companies have good coverage in every area. For example, there are some areas of the country where Aetna coverage is stronger (more doctors accept it) than Blue Cross. Some smaller insurance providers may have little or no market penetration. Even if you find an inexpensive policy, it won't mean anything if your insurance isn't accepted where you live.
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Check the quality of providers and services. Insurers can have inconsistent reliability across the country when it comes to service. The same can be true of hospitals. Make sure you ask around so you get a good idea of who provides the best service, or service that's acceptable to you.
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Check the strength of the insurer. Rating agencies like A.M. Best rate an insurer's overall financial strength, debt and credit. If your insurance company is struggling to pay claims, you may find the process of filing a claim difficult. Or you may have problems getting the company to approve your claim.
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