How to Root Out Affordable Health Insurance

Do these words really fit together: affordable health insurance? Most people don't think so anymore. Not so long ago, monthly mortgage payments used to exceed health insurance premium payments. No longer. 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.

When you are looking for affordable health insurance, it can be an extremely exasperating eye-opener. You might be thinking that you can't afford the same full coverage that you once received from your employer (past or present.)

Affordable health insurance (not "cheap"), however, is definitely available... if you know how and where to look.

When you are looking for affordable health insurance, you want the lowest cost per year that will fit your budget, of course. Although, what is even more important than price is the company's record for paying. Do they make it easy or hard to get your money. After all what good is insurance if they won't pay you when you need it. Take any budget and you can find a great car. Take any budget and you can find a great affordable health insurance. Of course, you probably won't be able to afford the BMW policy (otherwise you would never have searched for "affordable" in the first place, right?) but you can find a "no frills" policy.

Ten years ago, shopping for affordable health insurance was aggravating and time consuming. No more when you use the internet!

1. To submit claims to your insurance company, you no longer need a local agent. 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. Want thorough information about all of the insurance companies that you are considering? Just jump on Google or Yahoo and within seconds you'll have it. 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. Because it's really easy now for potential customers to discover what all companies are charging for their policies, health insurance companies try much harder to remain competitive. In the past you would have had to physically visit eight to ten agents to do a similar comparison. Most folks just didn't have the time or desire for that.

4. You can save hours upon hours whenever you need to change your payment options, deductibles and coverage. Just hop online and fill out some forms rather than mailing it all to your local agent who often made mistakes since it wasn't as importat to them as it is to you. Whew! What timesaver.

5. Got a credit card? Now you don't have to mail a check every single month. All you have to do is set up the "auto-pay" feature with your insurance company. No more forgetting to mail a payment on time. Want a discount? Need more time to pay? Well, most insurance companies will give you a discount when you set up the "auto-pay" and your credit card company won't require you to pay for it for at least 30 days.

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. Of course, these small expenses might be annoying but, for the most part, they will not significantly hurt you financially. It's the $200,000 kidney transplant that will ruin you and send you into bankruptcy or much worse. These are the financially disasterous situations that health insurance prevents.

Keep in mind that for you, as in gambling, insurance is a hedge bet. You are gambling that you will draw out more than you pay in. It's not a bad way to look at it. This may seem to be how things work but it's not entirely correct.

I always hear people compare casinos and insurance companies so let's use that as an example. 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. But what actually happens is this: they are betting against people that placed bets 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. Here's what really happens: using actuality tables, the insurance company determines the average cost per person by taking the average cost of a large group of similar people. Next, they charge everyone in the group the same price with the knowledge that they will pay less money to some in the group and more money to others but averaging the same amount of money to each person over time. Then they simply tack on their fee (like the casino's vig) for paying everyone when the money is needed for health situations. For the most part, you are betting that you are going to need more money for your health care than the average person in the group will need. This is what the insurance industry calls the "law of large numbers" and is what really makes affordable health insurance possible.

Most importantly, "affordable" and "cheap" are not synonyms. They do not mean the same thing. A Toyota Camry is "affordable". A Yugo is "cheap". There is some truth to the old saying that "You get what you pay for" but it is also important to understand that just because your friend spent $30,000 more for his Lexus than you did for your Toyota that he got $30,000 more car. Actually, the more and more you spend, the less and less you get for your money. Health insurance is very similar.

The opposite is also true though. One can get from point A to point B by driving a Yugo but not reliably. If your car breaks down a lot, should you rely on it to get you to work? You could get fired for being late or not showing up, right? If you need to get to a really important sales meeting... would you show up in a Yugo? What about this... would you buy something from someone driving a beat up Yugo? I know I wouldn't! I'm not a snob but I don't want to lose money by being cheap!

With that in mind, you should check the ratings companies such as AM Best (ambest.com) and Standard & Poors (standardandpoors.com) and, in my opinion, select a company with a rating of 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. In almost every case, the better company is the better way to go even if it costs a little more. It would suck to need the money and have nothing but trouble trying to get it from your insurance company let alone getting it quick, wouldn't it?

To wrap up, finding affordable health insurance is not nearly as difficult as most people think it is... not nearly that difficult.

If you need affordable health insurance, understand that by simply agreeing to higher deductibles, spending time researching online and comparing 8-10 differnet plans is the simplest method.