Health care costs have been rising faster than inflation for a number of years now. And even though the advances in medical technology and treatments continue to improve, these new treatments often come at a very high cost. A single accident or illness could completely wipe out your savings if you are not properly insured.
Many employers, especially larger companies, provide a health care insurance option to their employees. But what do you do if you’re self-employed or unemployed? How do you get yourself health care coverage in those situations? Given our current economic situation here is some health insurance advice to help you secure the insurance you should have.
Recently Unemployed.
If you have recently lost your job, and previously had health insurance through your employer, then you may be able to continue your coverage for a certain period of time under the Consolidated Omnibus Budget Reconciliation Act (COBRA). In general, if your employer had more than 20 employees and provided a group health care plan, then you can choose to continue your health care coverage under that plan after you are laid off.
This is only a temporary answer, though. First, the continuing coverage under COBRA will only be available for 18 months, and you need to elect to continue your coverage within 60 days after losing your job. Second, you’ll need to pay the entire cost of the premium for coverage. This can be significant, since many employers subsidize a significant portion of their employee’s premiums.
Individual Plans
At some point, if you either remain unemployed, or become a freelance worker, consultant, or are in some other way self-employed, you’ll need to find your own source for health care coverage.
Finding coverage a little more difficult than what you might be used to if you’ve always received health care coverage through your employer. When you receive employer-sponsored coverage, you’re likely faced with a choice between just a few coverage options. When you’re buying your own plan, however, you’ll be faced with many more choices. In fact, you’ll likely find enough choices to be a little confused, and perhaps a bit overwhelmed.
The most important thing to do is identify your most important health care needs. Do you need coverage for just you or for your family as well? Do any covered individuals have any specific health concerns or issues (or issues that are likely to arise in the future)?
Once you have answered those questions, you’ll need to decide how to balance a low monthly premium on the one hand, versus higher deductibles and co-pays, and lower maximum coverage amounts on the other. Are you willing to pay more in order to receive comprehensive coverage?
One option that’s become popular over the past few years is a high deductible health plan, coupled with a health savings plan. If you choose health insurance that has a high enough deductible, then you can open a tax-deductible “savings account” from which you can pay various types of health care expenses.
Medicare
If you are age 65 or older, then you’re eligible for coverage under the federal Medicare program. There are two parts to the Medicare program. Most individuals will automatically receive coverage under Part A at no cost. Part A is sometimes referred to as “Hospital Insurance,” and covers inpatient and other hospital or facility-based care.
Individuals may also elect to participate in Medicare Part B, which covers doctors’ services, outpatient care, and many other medical services that Part A does not cover. Covered individuals must pay a monthly premium for Part B coverage.
