When faced with the dilemma of buying their own health insurance, consumers find a baffling array of choices, terms, waiting periods, deductibles and exclusions. What is the difference between coinsurance and a copay anyway?
With less employers than ever offering health insurance benefits, people retiring earlier, and the trend toward self-employment and entrepreneurship, there are more people buying individual and family health insurance plans (IFP) than ever before.
Compounding the problem is the fact that health insurance is very complex, and consumers can easily make very serious mistakes that end up costing them tens of thousands of dollars – after it’s too late.
Naturally, with the growth of the internet has come the growth of “online” health insurance marketplaces. Unlike term life insurance, auto or homeowner’s insurance, health insurance has so many moving parts that it is not a commodity easily compared or purchased online. You are not buying an airline ticket from Travelocity, or a book from Amazon! Many online health insurance shoppers are duped into buying a virtually worthless “discount” plan instead of real insurance. Other consumers are under the mistaken impression that buying online will lower their premium – not true!
Here are the main problems in comparing and applying for health insurance from one of the online marketplaces.
First, not all of the sites have all of the plans available. When making such a critical and expensive purchase, wouldn’t you want to have the entire universe of coverage available to you?
Secondly, it is almost impossible to get an accurate premium quote online. Most online health insurance sites quote the “standard” rate. There is no way to tell if the medication you’re taking, or your height and weight ratio or any of the dozens of considerations that go in to the rate will effect your final price for coverage – you are flying blind!
Many online health insurance sites have “sponsored” or “featured” listings. After you enter your demographic info, available policies pop up. Often times the insurance company will have paid the site for premium placement, much like Google or Yahoo. Many mistakenly think this means it’s the “best” policy for them, and with the dizzying array of options for coverage, it’s not hard to see how they could make this potentially expensive mistake.