Friday, October 23, 2009

How to Shop Around for Health Insurance

Short Term Insurance
If you don’t have a job yet or won’t be starting one for several months you may want to look into short term health insurance. You can often buy insurance a month at a time for up to 6–12 month terms. A quick quote from shows plans ranging from $30–$80 a month. In some cases if you pay up front you might be able lower the premiums.

This insurance coverage is designed as a safety net against enormous medical costs. It generally does not include physical checkups, prescription medication plans, or other types of preventative care needs. Short term insurance gives you coverage in the event of emergency situations or catastrophic events. The main point of buying this insurance is so that you don’t end up with huge medical bills if you end up in the hospital with some major health issue.

Long Term Insurance
If you don’t anticipate having a job for quite a while or your employer doesn’t offer health insurance than a more permanent plan may what you need. The good news is that unlike short term insurance, regular insurance plans will include things like preventative care, prescriptions, and sometimes even dental care. The bad news is that they are also more expensive. Journalist Steven Rosen found the following quotes when searching for insurance for college graduates:

“A healthy 22-year-old male nonsmoker, for example, would pay a premium of $113 a month for a Humana individual policy with a $2,500 deductible, a prescription drug benefit and dental coverage. Three other policies I checked — from Blue Cross and Blue Shield, Aetna and Coventry — had premiums in the range of $105 to $115 a month.”

Compare those prices to the short term insurance options and you’ll see they’re considerably higher. Of course one way to reduce the premiums is to go with a higher deductible. If that’s a new term for you, the deductible is the amount of money you will need to pay for covered health care needs before your insurance company starts putting money in. In general the higher your deductible, the lower your monthly payments.

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