How Much Health Insurance Is Recommended?

In an ideal world, everyone would have access to top-rated insurance plans with low deductibles and total coverage, but that's just not the case. The level of health insurance you need depends on your age, medical history and--unfortunately--how much you can afford to pay each month, assuming you are not getting it through an employer's plan.

Recommendations for Young People

• If you're young--say age 25 to 35--and healthy, you may want to opt for a plan with a high deductible that covers your basic needs. Look for a plan that covers co-pays for doctor visits and prescription medications, since those are two things you are likely to need. You can also save money by choosing a plan that doesn't provide total coverage for things like operations and hospital stays but look for something that covers at least a percentage of those costs. And, assuming you are unlikely to incur any major medical costs, you could choose a plan with a high deductible (say in the $3,000 to $4,000 range), which will save you a considerable amount of money on your premium. The danger is that you are assuming a greater risk if you do have a major medical problem but you have to weigh that against what you are willing - or can afford - to pay for health insurance each month.

Recommendations for Older People

• Once you hit age 40, your chances of requiring medical care will inch up each year so it's probably a good idea to pay extra money each month for better coverage if you are in this bracket. Any good plan will include low-priced co-pays for doctor visits and provide benefits for things like physicals and other preventive measures. Also look for plans that provide total coverage for things like operations and hospital stays or at least something in the 90 percent range (hospital stays are incredibly expensive and even more so if you end up in intensive care). And go for a low deductible of $1,000 or less. You will pay extra for this type of coverage but, like auto insurance, it's something you can't afford not to have.

Recommendations for People with Insurance through Employer

• If your employer provides medical insurance, take the recommendations mentioned above to the next level. You will still pay extra for the coverage, but you can get most of the extra benefits for a fraction of what you would pay on the open market since you're paying only a small portion of your premium each month. Look for a good PPO (Preferred Provider Organization) plan instead of an HMO (Health Maintenance Organization). A PPO will cost a little more put give you greater flexibility in choosing a physician. Also, look for a plan that totally covers surgeries, hospital stays, pre-natal care and rehabilitation and physical therapy. These things will probably elevate your premium, and you may have to pay completely out-of-pocket for some benefits, but they are worth it if you're older and more prone to health problems. Again, the amount of health care coverage you need is subjective and often comes down to weighing the costs against the potential benefits.