How to shop savvy for individual health insurance

With the rising cost of health care, it’s becoming increasingly common for employers to discontinue coverage. In fact, it’s estimated that at least 400,000 Michigan residents will purchase their own health insurance this year. Just two short years from now, this number is expected to skyrocket – surpassing the 1-million mark, as an estimated 30 percent of small businesses cease coverage due to the health care reform.

If you’re like most working adults, you’re entering uncharted territory. The majority of us have never had to worry about finding and funding our own health insurance, and the impending reality is daunting. The key, however, is to be a savvy shopper when it comes to individual health insurance. I assure you, with some guidance, you can take guess work and stress out of this process.

Analyze your health and habits

Before you can determine the type of coverage you need, analyze your health care habits. How often do you go to the doctor? Someone who only visits the doctor for an annual physical doesn’t need the same level of coverage as a person with a chronic illness. Write down how many doctors’ visits you typically have a year and factor in whether you see any specialists. If you’re buying for your family, account for their visits as well. Remember that school-aged children typically make frequent trips to the doctor. Of course, you can’t predict the future, but you can plan based on history.

It’s quite common to scale back coverage when you’re paying for it yourself. Someone who selected the most comprehensive employer-funded plan may re-evaluate their individual selection based on true needs. You can save a significant amount of money on a month-to-month basis when you’re not paying for benefits you don’t use.

Research and select wisely

Once you know your habits, it’s time to find a plan that fits. Most health plans outline their options and let you apply online. If you are more comfortable speaking with someone directly, call customer service for an overview or work with an agent, which is often the wisest option.

Most agents work with a variety of health plans, so they can easily review the pros and cons of each, facilitate the selection and application process, and then serve as a liaison between you and your health plan. If a claim issue crops up, your agent will aid in the process. The best part? Your health plan pays the agent’s fee, so there’s no need to worry about cost for this service.

When you evaluate health plans, keep the following in mind:

• Ensure your plan includes the basic benefits, including prescription drug coverage, preventive care and hospital stays.
• Decide how you want to handle co pays and deductibles, and request a clear cost breakdown for each. 
• Review the network. Make sure your physicians are in network; coverage for an out-of-network physician is typically 60 percent, versus 80 percent for an in-network physician.
• Evaluate the strength of the health plan. Is the company financially stable? Does it have a good reputation in the community?
• Ask about service. Do members frequently have trouble processing claims? Is the customer service team friendly and helpful? Is the staff accessible? It should be easy to navigate the organization and reach the right person when an issue arises.
• Request a list of value-added programs and services available to members. Special classes and online tools are a nice way to supplement your coverage.
• If it looks too good to be true, it probably is. It isn’t uncommon for some health plans to lure you with a temporarily low premium, then raise it the following year. To be careful, ask for the company’s rates over the past five years. You should see a steady increase, never a sharp spike.

The National Committee for Quality Assurance (NCQA) ranks and accredits Michigan health plans. To see how your current or potential health plan stacks up, go to ncqa.org.

Ray Sohn is director of individual markets for Grand Rapids-based Priority Health.