How to Choose a Health Insurance Company

Low Complaint Ratio
The primary purpose of a health insurance policy is to protect policy holders from large catastrophic claims. For this reason it is important to research an insurance company's complaint ratio to determine how reliably a company pays claims. Generally, complaint ratios are consolidated in two places, the state department of insurance website and the National Association of Insurance Commissioners website.

Clearly, a lower complaint ratio is better because it indicates the insurance company is paying for claims as the policy holder expects they should. An average complaint ratio is about 1.00 per million dollars of premium. A policy with low premiums and a complaint ratio much higher than 1.00 may offer peace of mind, but it is contrary to the purpose of health insurance in providing financial security. It is better to pay a little more for a policy with a company that has a low complaint ratio.

Many companies at the state level have seemingly exceptional complaint ratios of 0.00. This can be a good sign, but in most cases it's not very informative because it simply means the company doesn't have very many policy holders in the state. Insurance companies should be collecting close to $30 million in premium per year before this statistic can be thought of as significant.

Large Network
The second factor in choosing a health insurance company is the size of the network. The vast majority of health plans pay lower benefits out of their network. Preferred Provider Organization (PPO) plans can pay out of network benefits, but often at a much lower benefit scale. By contrast, Health Maintenance Organization (HMO) plans most often don't offer any out of network coverage except for emergency services. The result of a small network for the policy holder can be high out of network expenses or time consuming searches for fleeting in network providers. The easiest way to get a sense of a given network is to visit the insurance company's homepage and perform a localized provider search for primary caregivers, specialists, and hospitals. Large networks will penetrate 75-95% of primary care givers and 80-100% of hospitals and facilities.

Long Term Stability
Most policy holders develop health conditions as they age, and become less desirable or even ineligible as applicants if they decide to change insurance companies. Consequently, it is important to choose a company with long term financial viability. An insurance company should be chosen as if it were a lifelong decision, because it very well may be. Insurance companies that use high pressure sales tactics and limited time offers are usually successful in the short term, but falter over time. Understanding that an applicant's attractiveness to an insurance company decreases over time, it's vital to choose a company with an established history of stability and predictability. Good indicators of an insurance company's long term strength are its age in the industry and its current financial rating.

As an independent broker, I came to the conclusion that Blue Cross Blue Shield (BCBS) is the health insurance company that offers the highest value per dollar of premium. BCBS has the largest network in the United States and in each region their complaint ratio is very low. BCBS is established as a long term force in health insurance and as a consequence is not prone to the short-sighted deceptive practices some insurance companies use. This is demonstrated by the relative simplicity of BCBS health insurance contracts, their lack of unexpected loopholes, and the proven long term stability of the company.To summarize, when choosing an insurance company, it's vital that they pay claims, have a large network of providers to visit, and have a focus of long term stability.
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Short-Term Health Insurance Can Be A Life Saver

Rising medical costs make individual health insurance a necessity. One accident, one serious illness, or one debilitating condition can destroy a lifetime of wealth. Occasionally, individuals may find themselves temporarily without individual health insurance due to graduating from college, changing jobs, or becoming too old to remain on their parents' policy.

The solution is short-term health insurance. These policies allow you to purchase individual health insurance from health insurance companies for periods of 12 to 36 months, 12 months being the norm. By investing in short-term health insurance, you are protecting yourself from potential physical and financial disaster.

The Importance Of Health Insurance

Individual health insurance not only provides you with preventative measures such as immunizations and regular exams, but they also allow you to receive early diagnosis for more serious conditions, which makes treatment far more effective. Studies have shown that uninsured individuals are 30-50% more likely to require medical attention for avoidable conditions than those with independent health insurance.

If you're young and healthy, you may not believe individual health insurance is necessary or worth the money. However, consider that a single emergency room visit averages $3,300. If you don't have that kind of money to throw around, the cost of individual health insurance looks far more affordable.

Short-Term Health Insurance Gets You Through Transitions

Short-term or temporary insurance policies provide you with coverage during transition periods of your life, regardless of your age. Since these policies are underwritten, you generally must be healthy to qualify. Individuals with pre-existing conditions normally cannot get short-term health insurance. Health insurance companies are willing to provide short-term policies only because they do not expect you to file a claim.

Short-term individual health insurance is generally less expensive than other types of insurance. If you lose your access to a job-related policy or your parents' policy, you may be able to extend those policies through COBRA, the Consolidated Omnibus Budget Reconciliation Act, so long as certain conditions are met, but even those policies tend to be more expensive than short-term policies. In addition, you must become knowledgeable about your rights and responsibilities before allowing a policy through COBRA to lapse. A lapsed policy causes you to lose many of your rights. You may be denied coverage for pre-existing conditions and you may be ineligible to purchase an independent health insurance policy later on.

Know What You Are Buying And What You Must Pay

Many healthy individuals are able to receive short-term comprehensive coverage for as little as $100 each month. For some, the premium may be even less. The important things to know before signing onto a policy are what is covered, how much you must pay, and any other restrictions or responsibilities the insurance company requires of you.

Short-term individual health insurance does not generally cover preventative care. Short-term insurance is useful in cases that require hospitalization, expensive diagnosis, or emergency care. It is important to understand how your deductible works and how much it is. If your deductible is too high, you will be paying for much of your medical care yourself. If your deductible is too low, it will cause your premiums to increase.

Short-term individual health insurance is an inexpensive way you can protect yourself against serious illness or injury during periods of transition in your life. There are specific limitations to coverage, but short-term insurance is far better than no insurance at all.
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