How to Unearth Affordable Health Insurance

Do these words really fit together: affordable health insurance? Most people don't think so anymore. No longer are mortgage payments the largest living expense as that distinction now belongs to health insurance premiums. And that's just the beginning. If you have a family history of diseases such as cancer or any recurring health problens such as asthma or diabetes, your monthly premium could easily exceed BOTH your mortgage payment AND your car payment.

It can be a real eye-opener when you are out looking for affordable health insurance. Did you used to have health insurance benefits where you work (or used to work) and now have to cover everything yourself? Now, you might find think that you can't afford the same level of coverage that you are accustomed to (especially if you used to be a federal or state employee.)

That said, affordable health insurance (not to be confused with "cheap") can be found when you know where to look and how to look for it.

To fit your monthly budget, obviously, on the hunt for affordable health insurance, price is the one of the most important factors in your decision making process. 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 as there is a car for just about any budget, there is also 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.

Nowadays, this little tool called "the internet" makes hunting for affordable health insurance much easier than it was ten years ago.

1. Even just ten years ago, to file a claim with your health insurance company, you needed to take an additional step to contact your local agent who would submit your claim for you. Because of the information age, you save 8-12% because your insurance company no longer has to pay agents commissions for filing your claims. Why? Your medical provider, such as your doctor or hospital, usually submits your claims directly to the insurance company so that they get paid faster.

2. With a simple internet search for "insurance companies", you'll easily find all of the top insurance companies. 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. Another benefit that stems from the internet is that insurance companies make every effor to be competitive. Why? Because they know that it's really easy for customers to find out what other companies are charging for the same service. 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. 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. 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. Of course, these small expenses might be annoying but, for the most part, they will not significantly hurt you financially. What will break you financially is the $100,000 heart attack. Protectiing your family, your assets and you is, more than anything else, the purpose of health insurance.

You should also think, for your purposes, of health insurance (or any type of insurance for that matter) as a gamble. Essentially, you are betting that over time you will receive more than you pay. It's not a bad way to look at it. However, it may seem to work this way but it really doesn't.

A lot of consumers think that insurance companies and casinos work the same way so we'll inspect it that way. They say that like placing a bet on their favorite sports team at the casino's sportsbook that they are betting against the casino. 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".

Similarily, when buying insurance, you are not really betting against the insurance company. 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. 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. Finally, the insurance company tacks on their fee for taking care of all of the money just as the casino takes their vig for managing the bets between bettors. 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. "Affordable" is a Toyota Camry. "Cheap" is a Yugo. "You get what you pay for" has a lot of truth but it can also be taken too far. Just because someone spends $30,000 more for their car does not mean that they will receive $30,000 more in actual car. You actually get less for your money the more you spend. There are many similarities with health insurance.

The opposite is also true though. One can get from point A to point B by driving a Yugo but not reliably. If you're not sure your car is going to start every morning 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. Nine times out of ten, the most expensive policy from a lower rated company with not be nearly as good as the least expensive policy from the higher rated company. Spending a little more money to go with the better company is almost certainly the better deal and the better way to go. 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 conclude, it is much easier than people believe to find affordable health insurance.

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.

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