Questions to Ask When Buying Health Insurance

Health insurance is one of the most important types of personal insurance you can carry. Not everyone owns a car or home that must be insured, but almost everyone will at some time be in need of health care. Ask health insurance companies several important questions when shopping for the right policy.

What Are the Monthly Premiums?

• Health insurance can be very costly, even if you are young, healthy and have no preexisting conditions. One of the most important questions is how much the health care policy will cost each month or each year. Depending on your income level, you may have to scale back health care coverage if premiums are too expensive.

What Are the Deductibles?

• In insurance, a deductible is an upfront cost that the insured party must pay before the insurance company will cover costs. Health care plans typically have deductibles on certain types of coverage; for instance, if you need major surgery, your insurance plan might cover the surgery, but if you have a $1000 deductible on surgical operating, you must pay the first $1000 toward the cost. Higher deductibles typically result in lower monthly premiums since it means you are taking on greater risk. Ask what the deductibles are for all points of health care covered by the plan.

Do I Have to Pay Coinsurance?

• Coinsurance means that you split health care costs with the insurance company, even after the deductible is met. Many health care plans cover 100 percent of expenses once the deductible is met, but some require coinsurance, commonly called the copays. For instance, a health plan might require you to pay 10 percent of the costs that exceed the deductible while the health insurance company will cover the remaining 90 percent. Coinsurance of 10 percent or 20 percent might not seem like much, but it can amount to tens of thousands of dollars in the event of a serious medical condition like cancer. Also ask about co-pays on prescription drugs; some health care plans vary as to how much you must pay for prescription drugs.

What Is My Maximum Benefit?

• Health care plans are typically limited to a preset annual and lifetime maximum benefit. If your health care costs exceed the maximum, the company will no longer pay for health care. For instance, if your plan has a low maximum benefit such as $50,000 a year, your health care costs might exceed that amount and leave you unable to pay.

Can I Choose My Own Provider?

• Some health insurance plans are rigid about what doctors and facilities are covered by the plan. One of the first questions should ask is whether you can keep your current doctor or clinic. Oftentimes using health care providers within a certain "network" set out by the health insurance company will be required or be much cheaper than using providers outside the network. Some insurance plans may require you to get a referral from your doctor before you can see a specialist.