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Not all health plans are created equal. Plans vary a great deal, both in cost and in benefits. Although it might seem daunting, you need to read any plan you're considering very carefully so you know exactly what is covered and how much you are going to spend, not just in premiums, but in deductibles, co-pays and other out-of-pocket expenses.

And remember, cheaper isn't always better. A plan with low deductibles and premiums might not provide adequate coverage. To that end, you need to decide what is important: overall cost or coverage. For example, a high-deductable plan might be just the right fit for someone who goes to the doctor only a few times a year. If you don't care which doctor you see, a Health Maintenance Organization, or HMO, might work. HMOs foot the bill as long as the health care provider is in the HMO's network of physicians and hospitals. HMOs usually have co-pays, perhaps $10 to $25, that you have to pay during each visit [source: The Wall Street Journal].

A catastrophic health plan might be the best option if you don't go to the doctor that often. The deductible is very high for these types of plans, but once you satisfy that amount, 100 percent of all your medical costs are covered. These plans also carry the lowest premiums [source: The Wall Street Journal]. However, catastrophic plans seldom cover pre-existing conditions, such as asthma, diabetes or cancer treatments. To cover pre-existing conditions, you might have to purchase a rider to the plan. Some catastrophic plans also limit the number of times you can visit a doctor.

Another way to keep premiums low is to increase the plan's deductible and skip the services you don't really need for now, such as dental and vision coverage. However, there are certain types of coverage people shouldn't go without. For example, women should always have maternity coverage even if they don't expect to have a child for a few years. It's more beneficial to pay for the coverage upfront, because it might be difficult to add it to the plan later on [source: Bradford].

Go to the next page to find out what is and isn't health insurance.


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