Health Insurances

How to Root Out Affordable Health Insurance

Do these words seem like they belong in the same sentence together: affordable health insurance? No longer are mortgage payments the largest living expense as that distinction now belongs to health insurance premiums. Some people who have conditions such as asthma or diabetes (or even a family history of a particular disease) have to pay more each month for their health insurance than their car and house payments combined.

Just trying to find affordable health insurance can seem like a trek to find the Holy Grail. If you have always had a health insurance benefit where you work - especially a state or federal employee - and now have to buy your own, you may not be able to afford the level of health insurance coverage you have become used to.

However, if you know where to look, affordable health insurance can be found.

Of course, your an extremely important factor is price because, after all, you are looking for "affordable health insurance." But, the most important question to really ask is this: what is the company's record for payment? Do they pay you quickly and hassle-free or do they take forever and fight you every step of the way? Just the same as finding an affordable car such as a Toyota or Honda, you can find affordable health insurance. Maybe you won't be able to afford a "Mercedes" insurance policy but there is no reason that you can't find a solid "Toyota" policy.

There are many reasons why, but the internet has made easy to shop for affordable health insurance.

1. Submitting your health insurance claim is much easier. You don't need a "local agent" anymore to submit your claim. In this day and age, you save money because the health insurance company doesn't have to pay an agent a commission. That means you can save up to 12%. Why? Because your medical provider submits your claims for you... no middle man!

2. All the top health insurance companies are at your fingertips on the internet. Since local agents can only represent a few insurance companies, generally they point you to the best health insurance product for your health and financial needs (unless their product is actually the best.)

3. Health insurance companies have to be extremely competitive because it is so quick and easy to compare them with their competitors on the internet today. Got a couple of weeks to find the best insurance deal? Well, that's what it took to get the best deal before the internet came along. Driving all over town. Meeting with a dozen agents. What a pain in the ass! Thank God for the internet!

4. You can change your coverage, deductibles and payment options with just a few clicks rather than going through the paperwork delay with a local agent (and then finding out he/she made a mistake... more delay!)

5. Instead of having to remember let alone mail a damn check every month to the insurance company, you can just have your payments charged to your credit card. Also, it gives you another 30 days before you actually have to pay. Also, many companies today give an additional discount for "auto-pay".

If you could uncover only one secret to finding affordable health insurance, make it this: the purpose of health insurance is to protect you and your family from a major financial loss. It's purpose is not to save you money on a monthly basis for doctor's visits to have a cut bandaged or for sore throat lozenges. They might be a bit of a pain in the ass, but little things like these won't hurt you or your family too much financially. It might mean one less night out per month but no more. Much more likely to destroy your family and you financially is the lung cancer you get diagnosed with just as your daughter is about to head off to college. Health insurance was designed to protect you and your family from this type of financial earthquake.

Keep in mind that for you, as in gambling, insurance is a hedge bet. The gamble is that you betting that you will need more money for your health than you are putting in. From the customer's POV, this is a good enough way to grasp the situation. This may seem to be how things work but it's not entirely correct.

A lot of consumers think that insurance companies and casinos work the same way so we'll inspect it that way. As many people believe, they believe that when they place a bet, they are betting on one team and the casino is betting on the other. This is not true. In fact, what really happens is that they are not betting against the casino but rather people that are betting for the other team. The casino simply sets the lines to balance the action on both sides and collect a small fee called "the vig".

Much the same, the insurance company is not betting against you when you purchase insurance. What really happens is that the insurance company takes a large group of similar people, determines what the average cost per person would be for that particular group by using actuality tables. They then charge everyone the same price knowing that they will have to pay out more to some and less to others but in the long run, everything will average out. And just like the casino taking their vig for managing the bet, the insurance company charges their fee for managing the group fund. Therefore, you are really betting against other people in your group. Essentially, you are betting that you will need the insurance more than they will need it. This is what the insurance industry calls the "law of large numbers" and is what really makes affordable health insurance possible.

Last but not least (in fact most importantly), do not think that "cheap" and "affordable" are synonymous. A Toyota Camry is "affordable". A Yugo is "cheap". And while there is some truth to "You get what you pay for," when you purchase a $60,000 Lexus instead of a $30,000 Toyota, you are not getting $30,000 more in actual car. In fact, you are probably only getting about $10,000 more car. There are many similarities with health insurance.

The opposite is also true though. Of course, when it's working, you can get from point A to point B driving a Yugo but "when" is the important word in the situation. If your car breaks down a lot, should you rely on it to get you to work? What if you miss a day of work and don't get paid because you can't get to work? Would you want to drive a crappy Yugo to a sales meeting? I don't know about you but I will never buy anything from somebody driving a Yugo (unless I'm travelling in Eastern Europe.) I'm not a snob but I don't want to lose money by being cheap!

To find "affordable" but not "cheap" companies, my advice is to only consider companies that the ratings companies such as AM Best (ambest.com) and Standard & Poors (standardandpoors.com) rate as A or higher. More often that not, the least expensive policy from a highly rated company is much better than the most expensive policy from a lower rated company. Sure, you will probably have to pay a little more to go with the better company but it is almost certainly the better deal and the best choice. Because if the company won't pay you (and in a timely fashion) when you need the money then what good is it? None!

To conclude, it is much easier than people believe to find affordable health insurance.

Discover affordable health insurance by taking a little more risk with higher deductibles, spending time online to compare ten different insurance companies and getting rid of coverage that you will probably not need (such as maternity if you are not in a relationship that would lead to pregnancy.)

Ed Brancheau, The Insurance Egghead (http://www.insurance-egghead.com/), helps businesses, individuals and families find an affordable health insurance (http://www.insurance-egghead.com/affordable-health-insurance.html). Drop by his website, The Insurance Egghead, for tons of free advice, articles and guides about health, dental, vision, accident and life insurance.

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