Sometimes you need to change health insurance companies due to a change in your situation such as a new job, starting a business or graduating from school. How you do this and what to look for are as important as the new insurance company you select.
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There are times when changing insurance companies is necessary. Luckily, there are strategies you can employ to make sure you have all the coverage you need at the right price.
What should I consider first when changing my health insurance company?
When faced with making a change to your health insurance, you should think short term. Most people who are buying their own health insurance for the first time change companies and policies during the first year. Sometimes the policy is not the best for them; sometimes the insurance company itself is not a good match for them.
You shouldn’t concern yourself about whether the policy you buy now will still be available next year; rather, you should buy the best value you can find. Health insurance is evolving rapidly these days; a better deal may be available next year. Keep your options open, don’t make long term commitments until you are sure what you have bought is right for you in terms of health insurance premium cost and benefits you will receive.
If you are making a change due to a change of jobs or the loss of a job, you may wish to consider a COBRA policy. COBRA insurance is a continuation insurance, which is usually short term. It will hold you over until you settle on a more permanent solution to your health insurance needs. They are more expensive than most policies, but you are guaranteed the same coverage as what you were getting before the change. You usually have 60 days to sign up with a COBRA policy and the coverage often lasts a year or more. This can give you some breathing room to do research on what is best for you and avoid a costly hasty decision.
A good guide to how COBRA works can be viewed at the United States Department of Labor’s (USDL) website. Another good source of information for those changing jobs and have concerns about their health insurance is to learn about the Portability and Accountability Act of 1996 (HIPAA). Additionally, your employer’s human resources department should have some information you can use when facing employment transitions.
Are there online resources to help me make a change?
The National Association of Insurance and Financial Advisors (NAIFA)has information that can help you with your health insurance decisions at their website. You should always consult a professional when you can, the value of an objective, trained person in helping you cannot be overstated.
Another objective non-profit organization with helpful information on health insurance is the Life Organization. They have a lot of good information for you to read and help you with your decision-making process. They have downloadable consumer guides, and a complete glossary of insurance terms and detailed explanations of key concepts to help you understand the things you read online and offline.
When should I avoid changing health insurance companies?
If you have a serious medical condition that is very costly to treat, you may wish to find a continuation insurance program, such as COBRA, rather than change insurance companies outright. You will want to avoid any exclusion for pre-existing conditions that any new policy may have.
If you absolutely have to change providers and have no other reputable health insurance company alternatives, check with your state department of insurance or health and see what information they may have on assigned risk health insurance plans where you live. Assigned risk insurance is required by many states and the insurance companies doing business in the state combine to write a policy for those who are somehow ineligible for standard coverage. Each company must take a percentage share of such applicants and provide them health insurance. It should be noted that such assigned risk insurance can be rather limited, and is often more expensive than regular coverage.
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