Merritt Personal Lines Manual: Chapter 2 Choosing the Right Plan
What kind of plan is right for you or your family? Only you know for sure. You will need to choose which style plan to purchase. And, if you opt for a Medical Expense plan, you'll also have to choose a deductible. As with other types of insurance, the higher your deductible, the lower your premium.
For most people, a deductible in the $100 to $250 range is the most manageable. But compare other deductibles, too. If your family has been healthy for a number of years, you may want to switch to a deductible of $500 or $1,000. You'll notice a sizable reduction in premiums. (Just remember that you'll have to pay the bills out-of-pocket until you satisfy the deductible.)
Some people even choose a deductible in the thousands of dollars making theirs, in essence, a catastrophic insurance policy. In this case, you'd absorb all the everyday costs of medical care, from doctors visits to prescriptions. But if you got seriously ill, you'd be covered after you satisfied the deductible. (Medical Savings Accounts or MSAs, are designed for this very reason and discussed later.) If you are healthy, this could wind up saving you money.
When comparing coverage, it is vital to look into a plan's limitations and exclusions to determine which expenses are not covered and which are restricted. For instance, many policies will pay only for treatment that is deemed "medically necessary" to restore you to good health. These policies often will not cover routine physical examinations or cosmetic procedures.
You'll also want to investigate what the insurance company considers usual, reasonable and customary charges, if at all possible. That's because the charges a company considers normal for a particular medical procedure in a specific geographic area are the maximum it will pay. If the charges are higher (and they often are), you'll be stuck paying the difference.
Also, find out if the plans you are looking into exclude coverage for pre-existing conditions (more on them in a moment). Unless you want to pay for your own medical expenses, it's best to avoid these policies if you can. If not, try to find one that excludes coverage for a limited period of time only.
Another way you can save money on your premiums, if you can afford to do it, is by paying them annually. It's worth looking into how much the service fee is for monthly payments and inquiring about a discount for prepayment.
Even if you already have health insurance, you'll want to review your policy once a year to be sure it still matches your needs. As the health care system continues to change, your health insurance should change with it.
