When it comes to health insurance, you may have the option of choosing between a couple of policies offered by your employer and your spouse’s employer or shopping for individual policies. Although the options may be limited, your choice of the right health insurance coverage can make a big difference in receiving the right coverage and being able to save.
Generally, your understanding of what you’re looking for in a health insurance policy is essential. In addition, the basic knowledge of how health insurance works can help even manage your expenses over the course of your coverage. In particular, you must pay attention to your policy’s premium, deductible, copay and out-of-pocket amounts. Know the relationship between these four elements, and how you pick what works for your needs.
Premiums and deductibles
The premium is the price you pay for your coverage. It is typically quoted at an annual rate, but paid monthly. If you’re young and healthy, and rarely need to see a doctor, you could go for a policy that offers a low premium. Along with this, you probably will have to pay a relatively higher deductible — that is the amount you have to pay before insurance covers the costs.
Meanwhile, if you’re someone who needs regular visits to the doctor, with chronic conditions or a need for ongoing medications and check-ups, paying a higher premium makes sense in order to get a lower cost for your copay (a fixed share of the cost that you pay) of your doctor visits, lab tests and prescriptions. With a higher premium, you also may be able to reduce your out-of-pocket amount, which is the total amount that you won’t exceed in all your expense responsibilities during a calendar year.
Exclusions
In choosing the right health care coverage, you also must pay attention to exclusions. Before going for acupuncture or chiropractor treatment, check your policy to ensure these services are covered. Even for day surgeries, physical therapies and anything that might be costly, it is a good practice to know how much your insurance is covering, if at all, to avoid a surprising, big medical bill.
Some policy exclusions may include major life events like maternity — or include them after a period of time. If you’re taking a new job and starting a family is on your agenda, paying for this coverage as soon as possible may be worthwhile.
If exclusions are similar in all the policies your employer is offering, you might want to check the difference in cost if you switch to a spouse insurance or buy independently. Sometimes major surgeries and ongoing medication can cost you a lot more than what you would pay per year. So know what you’re looking for, because tailoring your health insurance to your needs helps you save money that can be channelled into building assets and savings.
Maximums
Take a good look at how much your insurance policy covers. Make sure that will be sufficient in case of a major emergency that could run a big insurance bill like a car accident. If paying a little extra can push your maximum higher, that can be worthwhile, especially in a place like the UAE where health care is relatively expensive.
In addition, look at the maximum out of pocket amount. If you know a major surgery is coming up, paying a higher premium to reduce your share of this surgery can be worth it. If you’re unsure about how much health care costs, you can get an estimate from your doctor.
Customer service
If your health insurance is provided by your employer, you probably don’t have much choice in what you get. If you’re shopping around, make sure that you check different providers’ records in terms of customer service and claims.
If you’re in a medical emergency or dealing with a serious illness, the last thing you need to think of is fighting with insurance to pay for your claims. So make sure you go with a company that has a good record in term of paying and collaborating with medical providers.
Tips to choosing the best health insurance
Check out different policy options
Pick a policy that saves you in the long run
Know the exclusions ahead of seeking treatment
Check the record of the insurance provider
The writer, a former Gulf News Business Features Editor, is a Seattle-based editor.
