Self employed medical insurance : Optimizing coverage at low premiums

The self employed do not have the advantage of reduced prices of health insurance that are available to the employed people. That coupled with the rising costs of health insurance leave the self employed in an untenable position. There are medical insurance options available in the market, that cater to the specific needs of the self employed. With proper planning and through knowledge, any self employed person can benefit from self employed medical insurance coverage for themselves and their families. The most important issue is the balance and optimization of premiums and coverage. Self employed people have to pay a lot more than any employed person, to get the same kind of benefits and coverage. Normally, group and employer health plans offer a wide range of coverage and some of them might not be relevant or suited to the needs of the insured. The self employed person needs to identify the type of coverage that he needs for himself and the family and purchase medical insurance only for those. This helps to reduce the burden of the premiums to an extent and also helps to increase the coverage for specified needs.

If you have just recently quit your job to become self employed, you can avail the benefit of Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) and extend your medical insurance coverage for up to 18 months. This helps the self employed person to cover medical costs till such time he buys a self employed medical insurance plan from the market. This is especially useful if the insured has an existing illness that is already being covered by the medical insurance.

If the COBRA option is not utilized, the self employed person might be denied coverage on pre existing illnesses. Another option would be to link the self employed person’s medical insurance along with the spouse’s insurance (assuming the spouse is employed) This is a very popular option, which not only extends the coverage but also reduces the premiums by a big margin. If this luxury is not an option for you, you can choose to buy a plan that enables you to pay high deductibles and high coinsurance; this ensures that the regular premium payments are less for the insured.

If the self employed wants to avail a medical insurance with lower premiums, HMOs are a good option. The only restriction is the necessity of the insured to live in close proximity to the organization. The other types are PPO and TOS medical insurance plans which do not restrict the insured to the in network doctors but on the flip side, they cost a bit more. One can also join business associations that provide group insurance coverage to self employed people (not available in all the states). A self employed person cannot hope to buy a self employed medical insurance that costs as low as a employer provided policy. But, he definitely can wring out a good coverage at optimal premiums, by paying attention to the above mentioned points.

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