| Finding an individual health insurance policy that's right | | | | a waiting period on coverage related to the condition, |
| for you is no easy task. Here are five questions that | | | | or it can decline to cover you outright. Five |
| will point your search in the right direction. | | | | states-Massachusetts, Maine, New Jersey, New York |
| Whatever else might be said about individual health | | | | and Vermont-require insurance companies to make |
| insurance, it is not easy to buy. You have to decide | | | | health insurance available to all people regardless of |
| between companies, plans, deductibles. The choices | | | | their health (guaranteed issue). Some other states |
| are bewildering. Here are five questions to make the | | | | offer high-risk individuals the opportunity to participate in |
| process simpler: | | | | insurance pools that provide coverage to people who |
| 1. What can you afford? Insurance companies want | | | | have been denied insurance based on pre-existing |
| you to make all your other choices first, and then | | | | conditions. |
| consider cost, but it has to be the other way around. | | | | 4. Do you take prescription drugs? If so, you will want |
| Health insurance should not put you into debt. To | | | | to compare the drug benefits of the different plans. |
| control costs, you can select a plan with a higher | | | | Some plans require you to meet the annual deductible |
| deductible-the amount you have to pay before the | | | | before covering prescription drugs. Other plans do not |
| insurance takes over-higher co-payments, or fewer | | | | require a deductible for medication. Most plans require |
| benefits. Make sure the risks you assume are limited, | | | | you to pay part of the drug cost, known as a |
| however. For example, agreeing to pay $2,000 in | | | | co-payment, or co-pay. The amounts of the co-pay |
| deductibles is a limited risk; it cannot exceed $2000. | | | | can vary widely from plan to plan. Some plans place |
| Accepting a limit on hospitalization and outpatient care | | | | annual limits on their drug benefits; others do not. Most |
| is an unlimited risk, because the costs resulting from a | | | | plans adjust the co-pay amounts, depending on |
| serious illness or accident could far exceed insurance | | | | whether you use generic drugs, brand-name drugs that |
| company's limits. | | | | are preferred by the plan, and name brand drugs that |
| 2. Do you want to keep your doctor? If you have a | | | | are not preferred. |
| doctor and/or a specialist you want to continue seeing, | | | | 5. Can you use a tax break? Health insurance |
| your choice of plans may be limited. With a managed | | | | premiums are not tax deductible, but the money you |
| care plan such as an HMO (Health Maintenance | | | | spend to meet your deductible can be sheltered not |
| Organization), PPO (Preferred Provider Organization), | | | | only from income taxes, but also from Federal |
| POS (Point of Service), or IPA (Individual Practice | | | | Insurance Contributions Act (FICA) tax. You can |
| Association), your doctor would have to be part of the | | | | deposit up to $2,850 for an individual and up to $5,650 |
| network. If he or she is not in any network, you would | | | | for a family per year into a tax-free federal Health |
| have to consider an indemnity plan, sometimes called a | | | | Savings Account (HSA). Since contributions to an HSA |
| "fee-for-service" plan. This type of plan allows you to | | | | are exempt from withholding taxes (as high as 9.3% |
| go to any doctor, hospital, and specialist, but it has a | | | | for state income tax, 28% for federal income tax, |
| high annual deductible. After the deductible is met, the | | | | 7.65% for FICA tax), HSA dollars have up to 44.95% |
| individual health insurance plan will pay about 80 | | | | more buying power than after-tax dollars do. |
| percent of the bill. You are responsible for the other 20 | | | | Medication that would cost $1000 in after-tax dollars |
| percent. In addition, indemnity plans set "usual and | | | | could cost as little as $550.50 in HSA dollars. HSA |
| customary" rates for treatment. If your doctor charges | | | | contributions roll over from year to year, and the funds |
| more than the usual and customary rate, you pay the | | | | remain untaxed as long as they are used for medical |
| difference. | | | | expenses or are withdrawn for any purpose after age |
| 3. What medical conditions do you have? If you have | | | | 65. HSA funds can be invested, and the earnings are |
| a chronic medical condition such as asthma or | | | | tax-deferred. To open an HSA, a person must enroll in |
| diabetes, you will want to compare coverage to see | | | | a High Deductible Health Plan (HDHP). An HDHP |
| how the insurance company will handle your condition. | | | | requires a minimum deductible of $1,100 for an individual |
| If your condition has been diagnosed or treated before | | | | and $2,200 for a family. The high deductible keeps the |
| joining a new plan, it will be considered "pre-existing." | | | | monthly premiums low. The lower monthly costs and |
| Under the Health Insurance Portability and | | | | the tax-sheltered out-of-pocket expenses combine to |
| Accountability Act (HIPAA), a pre-existing condition | | | | make an HDHP plan the best option for many people. |
| must be covered without a waiting period when you | | | | By asking these five questions, you will be able to |
| join group plan, provided you have been insured during | | | | narrow down your choices, making the selection of a |
| the last twelve months. When buying individual | | | | plan much simpler. |
| insurance, however, the insurance company can place | | | | |