Shop for benefits, not premiums, when looking for health insurance

by Ray Carlson

When discussing health insurance plan strategies with clients, there can sometimes be an awkward pause in the conversation after asking the client if they checked to see if their own doctor is in the network of the health insurance company whose plan they are applying for.

It’s possible that many first time shoppers for individual health coverage are applying for health plans without first verifying if a family physician they know and trust is in-network. Have a doctor who you and members of your family have been seeing over the course of time and whose skills and approach you know and admire?

Then it should be job one of every savvy health insurance plan shopper to contact their doctor’s office and find out if that doctor is in the network of health care providers your insurance company contracts with for services within their network.

Your doctor is likely part of one or more insurance company Preferred Provider Organization or PPO plans. A PPO is defined as an organization where providers are under contract to an insurance company or health plan to provide care at a negotiated or discounted rate.

One of the most common bits of health insurance terminology you will hear and should learn, are the terms in-network and out-of-network. In fact, learning and practicing the skill of staying in-network will likely become your single biggest ally against incurring high medical bills. While indemnity plans do exist, the most common and price-friendly model for a health insurance product these days is the PPO. This form of ‘managed care’ helps the insurance company manage costs related to the health care you receive as an insurance company client.

One of the biggest temptations facing the health insurance consumer today is the tendency to shop for premiums and not benefits. What does that mean? It means to focus on the monthly premium of a particular plan to the exclusion of all else. The ‘all else’ in this case being important plan features like the annual deductible; annual out-of-pocket maximum(s); and the relative strength or weakness of that insurance company’s provider network.

A lower premium, but for a plan with an insurance company whose network is weak in your community or part of the state where you live? While that might not be much of an issue if you’re young, single, and basically looking at a health plan – any health plan – as a catastrophic health care strategy, the strategy needs to shift with family considerations: Married with a couple of kids? Let’s face it: You’re going to use your health insurance plan.

If the network of the insurance company you went with is smaller or geographical proximity to health care services is working against you, and your family starts racking up out-of-network medical expenses, the attractiveness of that lower monthly premium is going to fade … and fast.

We mentioned the word strategy above. Creating the health insurance strategy that is right for you and your family is just like the financial strategies that you create to achieve certain life goals: Owning a home; college tuition for the kids; and retirement. Like any good strategy – or game plan – you need to consider as many factors in your calculations as possible and keep an open mind to the possibility of being penny wise, pound foolish – which is always a negative when it comes to successful family financial planning.

So please be certain to hone your networking skills the next time you shop for a health insurance plan – when it comes to health insurance, your ability to “network” may be a real money saver.

Ray Carlson is a California health insurance agent who blogs at the Vitality California Health Insurance Blog.

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