A Suze Orman exclusive

Look, I know we’ve gotten ourselves into a horrible national crisis here, and a great many Americans are going without health insurance coverage because of the cost or are being forced to cough up more of their own money to pay for coverage previously offered as an employee benefit.

But folks, this is one area where you simply can’t afford to be underinsured if there’s any way at all you can help it. Remember, insurance is all about planning for the worst (which, of course, doesn’t prevent you from also hoping for the best). And if you or anyone in your family were to ever develop a severe illness, you would want to make sure you could afford the best care for them.

So please, if you don’t currently have any coverage, make this your main financial priority as of this moment. If you are a recent college grad who has yet to start work or are unemployed without coverage, you can buy short-term policies that will cover you for up to six months or so. (A great tip for college seniors: If you don’t have coverage or are currently covered by your parents’ insurance, buy a health plan of your own while you are still in school—one that will allow you to continue with the policy after graduation. Student policies are often a great deal, and being able to extend your coverage past your school years gives you plenty of flexibility while you job hunt.)

A key tactic for keeping your premium down is to choose a plan with a high deductible. Stick with me for a sec and you’ll see the wisdom of this. A low deductible, say one of just $500 a year, can actually end up costing you more than one with a $2,000 deductible. That’s because the lower the deductible, the higher the premium. Moreover, when you have a low deductible and make a ton of claims, your insurer might get ornery and jack up your premium when your policy comes up for renewal.

That’s why the smarter thing to do—if you are generally healthy—is to choose a policy with the highest deductible you can afford. Since your deductible is the annual out-of-pocket money you are required to kick in before your insurer covers your health costs, base your choice on what you can afford to pay out from either an emergency cash fund or a low-rate credit card with a line of credit you intend to tap only for emergencies.

If you are totally strapped for money, at least get a policy that provides you with catastrophic coverage. The annual premium can be a lot lower since these policies basically only kick in after you meet a sizeable deductible of $5,000 or more. The idea here is that you are healthy enough so that you don’t expect to need to use the policy for routine health care costs. At the same time, you’ll have the peace of mind of knowing that if you become severely ill you (or your family) will not have to pay monstrous health care bills out-of-pocket.

1 – Is the policy guaranteed renewable? Some smaller health insurance companies can choose not to renew your policy if your child were to become ill.    This is how they can afford to offer extremely low rates.  As with anything else – you get what you pay for.   Make sure you read the fine print.

2 – Check the network of doctors and hospitals. Make sure the company you buy from has doctors and hospitals in your area.  You may also want to ask your current doctor what companies they accept.

3 – Buy from a broker when possible. Health insurance agents can be valuable in helping you determine what kind of plan you need.  More importantly – they are there to assist you should you have trouble with a claim or payment.   Since the premium rates are set by the state – their expertise is available at no cost to you.   They are your advocate and work for your best interest.

Applying for  health insurance does not mean you have committed to buy.  It is important to apply for coverage and find out your rate before making a final decision.  This is how you ensure you are making the right decision about what is best for your child.  We are here to guide you through this process and provide you with the information you need in order to make this important decision.

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