Choosing An Individual Medical Plan
Choosing a medical plan is like buying a new car. We know we need a car, but deciding what kind of car to purchase and with what options can be a challenge. For many of us, what we ultimately buy is a compromise between need and budget.
The obvious starting point in the process of choosing an individual medical plan is evaluating your personal needs. Ultimately, you want to buy just the right amount of health insurance to satisfy those needs.
Here are some important questions for you to consider:
- Do you have a history of poor health?
- Do you visit a doctor more than once or twice a year?
- Do you require eyeglasses or contacts?
- Do you need a frequent supply of medication for a chronic condition such as allergies or dermatological needs?
- Do you require frequent treatments such as the services of a physical therapist or chiropractor?
- Is your current primary care doctor(s) part of the plan you are considering?
After considering your personal needs, you must evaluate the health plans available.
One course of action is to set up a direct comparison between your needs and the program benefits of each program available. This is a productive process to help you find a balance between need and budget.
While the overall expense of a particular insurance plan varies based on the benefits it contains, there is also a correlation between premium cost and your out of pocket costs.
Co-pays serve two purposes:
- They pay a portion of the cost for a doctor’s visit or prescription.
- They serve as a deterrent from unnecessary office visits, which ultimately help lower the cost of the plan.
If your particular needs require frequent prescriptions, treatments or visits to health care professionals, you will want a plan with a low co-pay. This will mean a higher weekly premium, but if you compare the expected total cost of the co-pays over the course of a year and the small increase in the weekly premium, you will find that the increase in premium costs less per year than the frequent co-pays.
Conversely, if your current health condition only requires you to visit the doctor for an annual physical, then a plan with a lower weekly premium and higher co-pay will be more beneficial to you.
Be sure to ask if any pre-tax deductible plans are offered. By having your weekly medical contribution withdrawn from your pre-tax dollars, you will save money on income taxes.
Another consideration is your deductible. If you need costly surgery or require a hospital stay, would you prefer a high or low deductible? Keep in mind that the larger your deductible, the smaller your monthly premium.
Finally, consider the option of a health savings account, or HSA. These plans allow you to put pre-tax dollars into your own savings plan. You can then use these funds to pay for a wide range of your medical expenses, from deductibles to dental appointments and eyeglasses.
