Cheapest Health Insurance – A Practical Guide

The cheapest health insurance product you find may not always be the best. However, the reverse is also true. Simply because you pay a lot for a health policy, it doesn’t mean that you’re buying the best product on the market. It may simply mean that you’re paying a lot of money. You need to find coverage that fits your situation and pocketbook. Sometimes that may seem like an overwhelming task.

First, look at your own personal health issues. If you’re insurable but frequent the doctor for minor illnesses, colds and flu, you might want to look at some of the managed care plans.

Managed care plans consist of PPOs, HMOs or POS plans. The HMO plans are the most restrictive and don’t pay anything unless you visit one of the preferred providers on the list. The other two types of plans simply offer financial incentives to use the list of doctors provided.

For instance, the plan may require a higher co-pay or deductible if you go to a non-listed provider. If your personal physician is on the list of doctors, then the choice is easy for one of these types of plans. If, however, you don’t find your doctor on the list and really don’t want to change, don’t even consider the plan, but look elsewhere.

Other forms of cheap insurance include hybrids created by an act of Congress. These types of plans are a health savings account, HSA, combined with a high deductible health plan, HDHP. If your family has very few claims each year, this type of plan can be the cheapest health insurance.

HSA and HDHP plans offer an opportunity to direct your health budget. When you select a qualified plan, you make two payments. The first payment goes into a tax-deferred savings account. The second part pays for a policy with a very high deductible. The minimum deductible for a qualified plan for 2009 was $1150 for an individual and $2300 for a family. The maximum out of pocket for an individual could only be $5800 and $11600 for a family.

While that may sound like a lot, there’s a catch. The government allows you to put away $3000 into a tax-sheltered account. If you’re over 55 then the amount increases by another $1000. If you don’t use the money, it’s yours to keep for the following year.

If, however, you have any medical, dental, prescription drug or related types of medical bills, you may remove the money and use it to pay if you haven’t reached the deductible limit. The premium on the high deductible policy is extremely small and most people in good health find this a delightful way to save their insurance dollars.

If you want the cheapest health insurance for those times between coverage, such as between jobs or when you’re a student, you’ll find that short-term major medical insurance offers a huge savings. People in good health no longer need to pay the enormous premiums for COBRA but can use this product to keep their budget in line. That’s particularly important if you no longer have a source of income.

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