Replacing Health Coverage

Ten Tips for Replacing Health Coverage
by Tony Novak

Changing health insurance is a ritual part of changing jobs, graduating from school or starting your own business. Fortunately it is now a lot easier and less expensive than in the past. Medsave.com is the nation’s largest online benefits enrollment service that offers this type of fast, affordable and reliable coverage nationally with policies issued within one business day. These tips will help you find the best value:

1. Do not try to your change insurance plan if you have a serious medical condition. Instead, contact your current insurer directly to ask about continuation of coverage options. Insurance services like Medsave.com are designed to provide insurance only for unknown future medical problems. These services do not help people with current medical problems. If you have medical conditions and absolutely must change health plans, switch to an HMO (these are not handled by Medsave.com).
2. Think short term. Most people who buy their own health insurance change their coverage in less than a year. Buy the plan that offers you the best deal now without concern for whether it will be available in a year. Next year an entirely new generation of health plans will be available. A plan that you bought more than a year ago would not likely represent the best value for you today. Use short-term medical insurance plans, student medical plans or foreign travel insurance plans if you qualify. These offer better deals if you qualify.
   
3. Choose a higher deductible. By taking a $1000 deductible, you will save more than $1000 in premium payments over a year's time. This should be an easy decision from a mathematical viewpoint. Some young people can buy a high deductible insurance plan for less than $30 per month to cover any serious medical issues.
   
4. Use free enrollment offers. With an increasing number of plans now charging an up-front enrollment fee, look for deals to save the enrollment fee whenever possible. Medsave.com pays the enrollment fee for anyone switching from a short term to a permanent insurance plan.
   
5. Choose indemnity type coverage and avoid HMOs whenever possible. This lets you and your doctor maintain control of your medical care. There are no “networks”; you choose your own doctor and hospital and are free to switch at any time. There are no limits on travel, since this type of coverage is equally valid everywhere in the country.
   
6. Take a separate plan if you travel outside the U.S. Most U.S. plans provide weak foreign travel benefits and most worldwide plans provide weak coverage in the U.S. SO it is best to carry separate plans tailored to your travel schedule.
   
7. Be aware of state issues. Each state controls its own health insurance laws. Four states – MA, NJ, NY and VT – make it nearly impossible for its individual citizens to buy affordable health insurance. The only legal way around this problem is to take out coverage while living temporarily outside these states.
   
8. Pay for 3 months of longer. You can save money by paying for more than one month at a time. Since most plans accept credit cards, it even makes financial sense to “charge it” at a lower premium rate and then pay off your own credit card over a few months. The premium discount will usually be lower than the credit card finance charges.
   
9. Avoid the lesser-known insurance plans. Health insurance premium rates are based directly on the benefits that the insurer pays out to policyholders. It makes no sense to enroll into a plan where there is a known issue of claims problems in order to find lower premium rates. Fortunately, the market share leaders maintain an excellent reputation for claims handling. Stick to these market share leaders.
   
10. Use a medical savings account. If you could benefit from making your medical expenses fully tax-deductible, open a medical savings account. There are no account fees or charges for those who qualify for this plan.

About the author:
Tony Novak, MBA, MT is a writer and financial adviser in Narberth, PA. His businesses MedSave.com and Freedom Benefits Association provide online benefits enrollment to individuals and businesses in 47 states. He is a frequent author lecturer on tax planning and employee benefit plan topics.

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