Guide to Selecting Health Care Insurance

Without health insurance, you could easily go bankrupt if you have a health emergency. Unfortunately, the maze of options can be confusing at best. It's important to find the insurance program that offers the highest benefits for the lowest cost, and to get that, you'll have to compare all of your options carefully.

Types of Insurance

• The two basic types of insurance offerings are group and individual insurance plans. If you're getting health insurance through an employer, it's considered a group plan. If you have to buy it on your own, it's an individual plan. Occasionally, an individual can join a professional organization in order to be eligible for a group plan. In general, the costs of group plans are lower. In terms of coverage, there are two types: indemnity and managed care plans. In an indemnity care plan, you can choose any provider you want, and the insurance company pays a pre-determined percentage of the cost of care. In a managed care plan -- such as a Health Maintenance Organization, Preferred Provider Organization or Point of Service plan -- you pay less money, but you have fewer choices. You have to see a doctor that's in a certain network of providers in order to qualify for the lowest costs. The government also offers health insurance plans. Medicare is for Americans 65 years of age and older as well as those with qualifying medical conditions while Medicaid is for citizens who meet certain low-income qualifications.

Financial Factors

• Start by comparing the costs of your insurance options. Your monthly premium is the amount that you must pay for the coverage, which may be free through your employer or over a thousand dollars for an individual family plan. It isn't the only cost, though. Many insurance plans only pay a certain percentage of the cost of services and have deductibles that you must meet before the payments will start. In general, plans with higher deductibles have lower monthly premiums; but if you know that you will need medical services in the near future -- such as a planned future pregnancy or knee surgery -- they you may be better off paying the higher premium.

Other Factors

• If you choose a managed care plan, you need to make sure that your favorite doctors are covered by that insurance plan. At the very least, you want options that are close to your home or place of work. Additionally, prescription drug coverage can vary widely between plans. Choosing a plan without prescription coverage can save money on your monthly premiums -- many pharmacies offer low costs on medications you may need, such as antibiotics. If you take a lot of medications, however, you must pay special attention to prescription drug coverage options.

Warning

• Some programs market themselves as health insurance but are really "discount savings plans." For a small monthly fee, you receive a list of doctors who will offer you their services at a reduced rate. This can be fine for someone who doesn't need medical services often but can make things financially tight should there be a major medical issue.