Reform is well underway, which means that more individuals are forced to search for, and purchase, their own individual health insurance. In an effort to equip our customers with the most information possible, we are sharing what we are finding to be the 5 most common mistakes people make when buying individual health insurance.
5 Mistakes to Avoid When Buying Individual Health Insurance
- Not buying health insurance or postponing your plan
Never go without health insurance. Granted we now have badger care - for those that meet the income requirements. But for individuals who are self-employed, retired or in between careers, taking a gamble on your health is a huge risk - one that can devastate you financially for the rest of your life - and ruin your credit too boot. Even a simple catastrophic illness plan is better than nothing - make sure your agent covers all of the options within your budgetary constraints.
- Deductible - too low if you are young and healthy - too high if you are in need of care
The number one mistake people make is not choosing the deductible that is right for your health and age. If you are young, healthy and only see the doctor once a year for preventive care - then take that gamble! Go with a high deductible ($1,200 or more a year for individual and $2,400 a year for families is considered high). High deductibles will cost you less on a monthly basis. If on the other hand you are in poor health or climbing in years and you find yourself using more medical care that you used to, then go with a lower deductible - but weigh the overall yearly cost of the plan. That will help you determine how low to go on the deductible.
- Out-Of-Pocket Max Not Understood
Outside of your monthly payment, this is the single most important thing you want to concern yourself with when buying health insurance. There is nothing more important than knowing how much money you could potentially have to pay for a serious medical procedure. Make sure your agent goes over several scenarios with you so that you fully understand what your out-of-pocket expenses will be should something major occur. A lot of plans will not include the plans deductible in consideration of out-of-pocket max. This is a very important coverage topic to fully understand!
- Pre-existing Conditions
After 2014, insurance carrier can no longer deny insurance to anyone based on a pre-existing condition. Great! That means if you do have a pre-existing condition, you'll be able to get coverage - whereas you most likely couldn't before reform. The misconception is that this insurance is "free", or even "affordable". Don't think for one minute that insurance companies are not going to take into consideration your "insurability". They will and it will be reflected in your monthly payment - and it will be expensive! They can't turn you away - but they can make you pay! For previously uninsurable risks (pre-existing), we are seeing 40%-400% increases in rates. There is a high risk pool for Wisconsin that can be considered if this option is too costly.
- Not working with an independent agent
Yes, you can go through the on-line quoting process, fill out all the forms, submit your email address and then within 24 hours you'll be bombarded via email and phone calls with companies and agents trying to collect even more information on you - they all work for someone different. Quoting sites conglomerate your information and feed it to paying agencies as a "lead". Why would anyone want to go through that hassle? Contact R&R Insurance - or if you are in a state other than Wisconsin, contact an independent insurance agency that will be your one main contact. We shop it for you. We collect your information, always with the utmost respect for your privacy and protection of your personal identifiable information - and we field the quotes coming in. You'll receive valuable insight, have your pick between all the major companies and be reassured each year you are paying the best rate, all for no extra charge.
Your insurance agent does not get paid until you purchase a plan, at which point they are paid a commission directly from the insurance company. Health insurance prices are fixed by law, that means you will pay the same rate for that health insurance no matter where or who you buy it from.
Related articles: 7 Tips on How To Pick The Best Individual Health Insurance Coverage