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10 Tips for Replacing Health Insurance Coverage

January 1, 2010

Changing health insurance is a ritual part of changing jobs, graduating from school or starting your own business.  Fortunately it is now a lot easier and less expensive than in the past.  Medsave.com is the nation's largest online benefits enrollment service that offers this type of fast, affordable and reliable coverage nationally with policies issued within one business day.  These ten tips will help you find the best value:

1.  Avoid changing health insurance companies if you have a serious medical condition.  Instead, contact your current insurer directly to ask about "continuation of coverage" options.  Almost every health insurance company offers "individual conversions" from group plans when coverage is not available under the law known as COBRA. Individual insurance policies are not designed to pay for the cost of treating pre-existing medical conditions, but rather are designed to pay for new problems that may arise after the insurance is in force.  If you have serious medical conditions and absolutely must change health insurance companies, then learn about the state-mandate or assigned risk health plan in your state (these special insurance plans are not handled by MedSave.com and are only available "offline").

2.  Think short term.  Most people who buy their own health insurance change their coverage in less than a year.  Buy the plan that offers you the best deal now without concern for whether it will be available in a year.  Next year an entirely new generation of health plans will be available.  A plan that you bought more than a year ago would not likely represent the best value for you today.  Use short-term medical insurance plans, student medical plans or foreign travel insurance plans if you qualify.  These offer better deals if you qualify.

3.  Choose a higher deductible.  By taking a $1000 deductible, you will save more than $1000 in premium payments over a year's time.  This should be an easy decision from a mathematical viewpoint.  Some young people can buy a high deductible insurance plan for less than $50 per month to cover any serious medical issues.

4.  Use free enrollment offers.  With an increasing number of plans now charging an up-front enrollment fee, look for deals to save the enrollment fee whenever possible.  MedSave.com pays the enrollment fee for anyone switching from a short term to a permanent insurance plan.  Also, Health Savings Accounts (listed below) are free to those who enroll in insurance at the same time.

5.  Choose indemnity type insurance and avoid HMOs whenever possible.  This lets you and your doctor maintain control of your medical care.  There are no required "networks"; you choose your own doctor and hospital and are free to switch at any time.  There are no limits on travel, since this type of coverage is equally valid everywhere in the country. 

6.  Take a separate plan if you travel outside the U.S.  Most U.S. plans provide weak foreign travel benefits and most worldwide plans provide weak coverage in the U.S.  SO it is best to carry separate plans tailored to your travel schedule.

7.  Be aware of state-specific issues where you live.  Each state controls its own health insurance laws.  Four states - MA, NJ, NY and VT - make it nearly impossible for its individual citizens to buy low cost health insurance.  Residents of those four states must be prepared to pay more than those living or visiting other states.

8.  Pay for several months of coverage at once whenever possible.  Quarterly or semi-annual billing is less expensive than month-to-month billing.  Since most plans accept credit cards, it even makes financial sense to "charge it" at a lower premium rate and then pay off your own credit card over a few months.  The savings in insurance cost will be more than the credit card finance charges.  Be aware that a few health insurance plans do not issue refunds if you cancel before the end of the period of paid coverage.

9.  Avoid the lesser-known insurance companies.  Use the larger, well-known national insurance companies with strong consumer reputations.  Health insurance premium rates are based directly on the benefits that the insurer pays out to policyholders.  It makes no sense to enroll into a plan where there is a known issue of claims problems in order to find lower premium rates.  All of the large national insurance companies leaders listed at MedSave.com maintain above average reputations for customer service and claims handling.  Try to use the insurance companies that are market share leaders in your specific community.  If you are unfamiliar with the companies available, an independent enrollment adviser can list the market share leaders in the specific type of coverage that is best suited to your situation.

10.  Use a Health Savings Account.  Pay for out-of-pocket expenses with tax-deductible money.  Health Savings Accounts require a specific type of insurance that is not available to everyone.  There are usually no commissions, account fees or charges for those who qualify for this type of health plan.  More information is available at http://www.healthsavingsaccount-hsa.com.


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