Tips for buying health insurance

Yesterday, the U.S. Supreme Court upheld one of the most controversial aspects of the Affordable Care Act, sometimes referred to as Obamacare — the individual mandate.

That mandate states that every American must buy health insurance, or pay a fine. There are exceptions, most notably for those that would pay more than 8 percent of their income on insurance. However, this will still require millions to purchase health insurance plans by 2014.

If you’re one of the uninsured who will soon be shopping for plans, here are a few tips:

  1. Understand the language. A deductible is how much you pay out of pocket before your coverage kicks in. A co-pay is a fixed amount you pay for things like prescriptions or doctors visits. Co-insurance is a percentage of the cost that you pay for covered expenses. If the policy you are looking at includes terms you don’t understand, ask questions.
  2. Consider a broker. If you feel overwhelmed by your choices, consider going through an insurance broker. When hiring your broker, check his or her creditials with the National Association of Insurance Underwriters ( or the National Association of Insurance Commissioners (  Also keep in mind that the brokers sometimes work on commission paid by the insurers, which means they may steer you toward the plan that pays best for them and not necessarily the plan that is best for you. Ask how he or she is compensated and keep that in mind when getting advice.
  3. Know your priorities. How much can you afford to pay out-of-pocket in a year? Is there a specific condition you need to be covered? Do you regularly take medication? Insurance plans vary wildly in premiums, deductibles and coverage. If you know exactly what you want out of a plan, finding the right one is easier.
  4. Compare coverage. This daunting task will be somewhat easier starting in September 2012. Insurance companies will be required to use a standard form to show the costs of each plan, including co-pays and deductibles, in an easy-to-understand format. These forms will also include estimated out-of-pocket expenses for two scenarios — having a baby and treating type 2 diabetes. In addition to costs, look closely at what exactly is covered and what is excluded from coverage.
  5. Check networks. If you have a regular doctor, check whether he or she is considered in-network on your new plan. Going to an out-of-network doctor can significantly increase out-of-pocket expenses. Look to see what hospitals contract with the insurance provider. Some plans require you to go to a contracted hospital in an emergency.
  6. Consider costs. Don’t just look at premiums when considering the cost of an insurance plan. Check deductibles, co-pays and co-insurance levels. Many plans also show a maximum out-of-pocket cost as well. That tells you how much you will have to pay in deductibles and co-insurance before your plan starts to cover 100 percent of expenses.
  7. Research customer service. Though all insurance companies have their fair share of angry customers, look for companies that have high ratings in customer service. Even with the best insurance plans, you may have to dispute a denial or call for clarification about your coverage. Poor customer service only make these stressful situations even worse.
  8. Know your rights. The Affordable Care Act will be changing many aspects of health coverage in the coming years. Know what you are entitled to and understand how changes affect you and your plan. Consumer Reports posted this quick reference guide to healthcare reform changes that can help you along.