Purchasing health insurance is a personal decision, one that should take into account your budget as well as your current and potential health care needs. However, many individuals make major mistakes when choosing a plan, which can result in higher costs, less coverage, and even the risk of a financial crisis should a critical illness occur. Avoid these three mistakes when buying health insurance.
Choosing a Plan on Price Alone
In the insurance industry, like many others, you get what you pay for. If you choose the most inexpensive insurance plan, you’re likely not receiving the coverage that you need. Choosing a plan based on price alone overlooks your unique health care needs. Failing to choose a plan that doesn’t consider precisely what you need for health coverage means that when a health incident occurs, you could be footing the bill. While price can certainly be one factor in your health insurance shopping decision, you should consider price only within the context of your health care needs. There is a new breed of innovative companies that are changing the way health insurance is purchased.
One such company uses this survey to is matching individuals with health plans based on their unique needs
Avoiding High Deductibles
Insurance shoppers might be scared off by high deductibles, but choosing the plan with the lowest deductible isn’t always the smartest choice. A National Bureau of Economic Research working paper revealed that while many individuals opt for higher monthly premiums to secure lower deductibles, doing so might not be the best financial move. Paper co-author Saurabh Bhargava, assistant professor of economics at Carnegie Mellon University indicated that the additional payment in monthly premiums surpasses any savings created by the lower deductive. As a result, higher monthly premiums result in higher healthcare costs overall, even if the deductible is lower.
Skipping Critical Illness Insurance
Just because you’re healthy today doesn’t mean a critical illness can’t impact you in the future. Rather than purchasing health insurance that covers everyday illness and well checks, you should shop with potential critical illnesses in mind. Critical illness are inevitably a part of many Americans lives. One in every three deaths in America is caused by heart disease, stroke, and other cardiovascular diseases. In 2011 alone, nearly 787,000 people died of these causes, according to the American Heart Association. The incidence of cancer in the U.S. is equally alarming. In 2015, the American Cancer Society projects more than 1.6 million new diagnosed cases of cancer, as well as almost 590,000 cancer deaths in the U.S.
Coverage for these critical illnesses can result in significant savings should you be affected by one of these conditions. Critical illness coverage guarantees you anywhere from $25,000 to $200,000 should you suffer from a heart attack or stroke or face a cancer diagnosis. Without this important insurance coverage, you may be left facing high medical bills and loss of wages, which can have a profound impact on your overall financial situation. As a result, critical illness coverage is imperative to ensure you are well protected should the unthinkable strike.
Smart shopping can lead to a better insurance plan.
By avoiding these mistakes, you’ll find a health insurance plan that is best suited to your needs, and you might save some money along the way.