Buying Health Insurance

Matching

A. No Health Insurance
B. Comprehensive Traditional Policy
C. High-Deductible Catastrophic

1. Probably Getting Ripped Off
2. Independently Wealthy or Delusional
3. Savvy

Answers
A-2, B-1, C-3

Choosing health insurance is annoying and something that most young adults don't pay close attention to. Many young people fall in one of these categories:

No Health Insurance at All

It's important for everyone to realize that this is completely irresponsible. Unless you have substantial wealth, you could ruin your financial future and potentially drain your parents or family of their retirement savings if you have an accident. Even if your employer doesn't offer it, you should still get insurance.

'Over'insured

Many young people have a comprehensive policy provided by their employee, even though they are healthy and rarely need any care. (This is more your employer's problem than yours)

How to Choose a Plan

For those of you who are self-employed, a student, or don't have an employer-provided plan, the first question to ask yourself is whether or not you are healthy. Do you need to see a doctor for any conditions? Are you on medication? If you only expect to see a doctor for a routine check-up, you'll want to get some catastrophic insurance to protect you in case of an accident or an unexpected major illness.

You can often subscribe to these plans for about $50 a month. Generally speaking, you won't receive any benefits, since these plans have a high deductible (often $2,500 to $5,000). You'll be responsible for this amount, and your benefits will kick in after you've incurred these expenses.

Generally speaking, the lower the deductible, the higher the premium. You'll also want to check to make sure that local doctors and hospitals accept the insurance plan.

This can be a serious savings from a student health plan through a university or a comprehensive traditional policy. Some of these plans have monthly premiums triple the amount of a catastrophic plan.

Check availability at sites like www.ehealthinsurance.com, where you can compare different plans.

More info on catastrophic plans: Pros and Cons of Catastrophic Health Insurance