Have a question

Health insurance is an important aspect of financial planning. Staying in good health and getting treated for any medical problem at affordable prices is the goal we all have. While paying on your own for simple treatments like flu or fever may be affordable, paying for heart surgery or a kidney transplant could be very expensive. It is, therefore, very important that you have a healthcare coverage that suits your needs and affordability. Clearly, if you want a coverage that pays in full for all your doctor visits and any medical needs then the premium will be high. On the other hand, if you pay for your basic medical needs and want to use health insurance after paying, say $3,000 or $5,000 from your pocket in a year, then you may get the coverage at much cheaper rates. Such plans are often called as high deductible health plans.

To get medical treatment, broadly speaking there are 2 programs: Visiting a doctor's private practice or a managed care facility. A managed care facility provides a cost effective delivery of health services. These facilities are run under two programs: HMO (Health Maintenance Organization) and PPO (Preferred Provider Organization. Many large employers offer a choice of HMOs and PPOs to their employees. ...Show details

  • Health Maintenance Organization (HMO): HMOs offer comprehensive healthcare including preventive services such as annual check-ups and mammograms. They usually require a $20- $30 copay for each visit and require you to be treated by doctors in their facility. Primary care doctors in HMOs are generally on the payroll of HMOs. Although cost efficient, HMOs limit your doctor's choice. However, some HMOs are large and have a large variety of doctors to choose from.
  • Preferred Provider Organization (PPO): PPOs differ from HMO in the sense that the doctors in this case are not on the payroll of a PPO. They also have a network of providers. But this arrangement provides a greater choice of healthcare providers including doctors outside the network. As a result of this flexibility, the cost of this insurance is higher and the coverage may be partial up to a certain limit.

Healthcare costs are rising 6 to 8% per year while people's earnings are either not going up or are going up at a much smaller pace. This is leading to a number of affordability issues. It is generally not recommended to purchase a health insurance on your own due to higher costs. Unlike an employer provided health insurance, in this case, you lose the tax benefit as the payment of health insurance premium is from after tax dollars. ...Show details

Based on the number of individuals covered, health insurance falls into 3 different categories: Single, Single +1 (for married), and Family. Note that family includes spouse and children including those legally adopted. On an average for a family in normal health, the monthly premium could cost around $1,000. Employers in general pay about 70-80% of the cost of health insurance. But high deductible health plans are significantly cheaper. Many employers have negotiated rates for their employees under the Group Health Insurance program. Most group health insurance program cover the treatment for a pre-existing (tool tip:a medical condition existing prior to purchasing an insurance e.g. a high blood pressure, diabetes, asthma etc) condition too.

  • Assess your health condition
  • If you are employed, analyze different plans offered by your employer for coverage, cost, and your needs
  • Follow the tips outlined above
  • If you are buying the insurance on your own, shop around for coverage, premium, and the record of health care provider in settling claims. Many companies offer a quote on their website.
  • Note that some states mandate having a health insurance