Cover Yourself

By Jean Chatzky

The leading cause of personal bankruptcy is not wasteful spending or reckless investing but unpaid medical bills. That's surprising, but only until you consider that at any moment some 40 million Americans are without health insurance and another 40 million have experienced a gap in coverage in the past two years. With the slow economy, these disturbing numbers are growing as employers cut jobs and benefits. So it pays to know how to get health insurance outside of your employer, if need be, for yourself and your family.

Many of those laid off can maintain coverage for 18 months through their former employer's plan under a law called COBRA (the Consolidated Omnibus Budget Reconciliation Act). But at an average $600 a month, that's expensive insurance. Fortunately, there are other options, and if your family's health is reasonably good, they will probably be cheaper.

START ON THE WEB. According to comparisons from eHealth Insurance.com the online market leader, a healthy family of four (thirtysomething parents and school-age kids) can get a major-medical plan--with a $1,000 annual family deductible and co-payments of $30 per doctor's visit and $10 for generic drugs--for about $400 a month. The price falls to $200 a month with a $5,000 deductible. A healthy 30-year-old single male can pay about $160 a month, or $50 with the higher deductible. You'll have to go through medical underwriting, answering health questions and opening up your medical records. Depending on what's there, an insurer may want to charge a higher rate or exclude existing conditions. In such cases, COBRA might be the best deal after all.

CONSIDER SHORT-TERM COVERAGE. If your employment prospects are good, you may want a bridge for, say, six months. Short-term policies are cheaper because they exclude coverage for existing medical conditions and reimburse a smaller percentage of your costs. Besides eHealthInsurance.com go to Fortis Insurance (fortis health com) the leader in this part of the market.

TAKE YOUR WEB QUOTES TO A PRO. An agent can assess your needs, explain complex policy riders and sometimes get you a better deal. (Some insurers, like Blue Cross, aren't in online databases.) You can search for agents in your area through the National Association of Health Underwriters at nahu.org

CHECK OUT ASSOCIATION COVERAGE. Many institutional and professional groups, including alumni associations, offer well-priced coverage to members. But don't assume that your group has chosen a good company, says Karen Pollitz, project director at Georgetown University's Institute for Health Care Research and Policy. Before signing up with any insurer, see whether its customers lodge a lot of complaints: go to "Consumer Information Source" at www.naic.org the National Association of Insurance Commissioners site. Check quality ratings at www.ncqa.org the National Committee for Quality Assurance site. And before using an insurer based out of state, ask your state's insurance department whether you'll be protected if the company tries to raise your premium but not those of other policyholders.

Finally, buy the broadest coverage you can afford. Cut costs, if you must, by raising your deductible but not by curtailing coverage for such things as outpatient hospital services, which can easily cost tens of thousands of dollars. --With reporting by Jonah Freedman

With reporting by Jonah Freedman