How to Choose Your Health Insurance
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Having a health insurance plan is the most important step of all your financial plans. Before making any investment get adequate health insurance for yourself and your family’s safety. Health insurance is not only about illness or diseases, it comes handy during any accidents.
Health insurance plans are quite complex when compared to other insurance policies. To make it simple and choose the right one, you need to understand a few factors. In this post, we will discuss the stepwise aspects to be considered while choosing a health insurance plan.
Step 1: Find your marketplace
The health insurance marketplace is the place where you will get your insurance. It can be your employer, a government-run exchange, or a different marketplace. When you get your health insurance through your employer you might not get a chance to choose the plan. But, some companies offer multiple health insurance plans that you can choose from.
The insurance provided by your company will be the least expensive one as it has to pay a portion of your premium. If you wish to exchange this plan with an alternative plan from the marketplace it will cost you more.
You can also choose your health insurance through a private exchange or directly from an insurer. But by choosing these options you will not be eligible for income-based subsidies or discounts on your monthly premium.
Step 2: Compare the types of health insurance plans
There are different types of health insurance plans depending on how they work. Each plan works in a different way. Compare these plans and look for a summary of benefits.
Exclusive provider organization plans (EPOs) – It offers a network of providers for you to choose your plan. You have to stay in this network for coverage unless there is an emergency.
Health maintenance organization plans (HMOs) – In this, you get a network of providers to work with your plans and you get to choose a primary care physician. If you want to see out of network providers then it has to be approved by your primary physician or can be done during an emergency.
Point of service plans (POS) – It gives the flexibility to see out of network service providers but you need to pay a high cost for the services. In this plan, you have to choose a primary care provider and get referrals for an outside visit.
Preferred provider organization plans (PPOs) – It gives you a list of providers you can visit. With pre-negotiated rates, these providers keep your expenses down. In this, you don’t need referrals to visit any specialist.
Step 3: Compare health plan network
The vast majority of insurance plans offer in-network provider services at lower cost, so if you want to continue to see a specific doctor you need ensure they are in your coverage network. A larger coverage network increases the number of doctors available for you to see, which can make getting health care easier.
Step 4: Compare out-of-pocket costs
The benefits summary of available health insurance plan should be listed on the marketplace you use. You are responsible for paying the deductible, coinsurance, and copayments for your health insurance plan. Every health insurance plan also has a maximum annual out-of-pocket cost that you have to pay, but the lower your monthly premium, typically the higher that maximum cost is.
Plans that pay a higher portion of your medical costs, but have higher monthly premiums, are better if:
- You see a frequently see a doctor, whether a primary physician or a specialist
- You need emergency care frequently
- You take brand-name or expensive medications on a regular basis
- You plan to have a baby, are expecting a baby, or have small children
- You have surgery planned
- You’ve been recently diagnosed with a chronic condition such as cancer or diabetes
Plans with higher out-of-pocket costs and lower monthly premiums are the better choice if:
- You can’t afford higher monthly premiums for a plan with lower out-of-pocket costs
- You are in good health and rarely see a doctor
Step 5: Compare benefits
Once you have narrowed down your health insurance options, it’s time to check which one will give better coverage depending on your personal health. You can enquire by calling customer care or the insurer you are considering and ask your queries. It is better to enquire if your present health condition or any medication if you are taking, is covered under that particular plan. Also, ask how to get started with this health insurance plan and about the needed documents.
When your new health insurance begins you must make sure that your previous plan is discontinued.
Health Insurance Quality Categories
All these different types of health insurance can be offered in the four standard categories of health insurance: Bronze, Silver, Gold, and Platinum. Each category indicates how much of your costs will be paid by your insurance company:
- Bronze plans cover 60% of estimated typical annual medical costs
- Silver plans cover 70%
- Gold plans cover 80%
- Platinum plans cover 90%
The price of premiums increase the more medical costs your insurance company covers. At the same time, your maximum out of pocket expenses decreases the more medical costs your insurance company covers.
You may be eligible for a premium subsidy based on your income through a tax credit.
Catastrophic health plans are alternative plans where you get to pay low monthly premiums and extremely high deductibles. These are affordable plans that provide coverage if you experience any serious medical conditions, like a heart attack or cancer. But for other routine medical check-ups, you need to pay by yourself.
Important Healthcare Terminology and Costs
The amount of money you have to spend for health services before your insurance company pays anything (except free preventive services)
Copayments and coinsurance:
Payments you make each time you get a medical service after reaching your deductible
The most you have to spend for covered services in a year. After you reach this amount, the insurance company pays 100% for covered services.
Information about Affordable Care Act Plans
- Enrollment is during the Open Enrollment or Special Enrollment periods for Obamacare plans and it typically takes 2-6 weeks for the stated coverage to begin.
- While your plan is available, you have coverage. You can switch your plan during the Open Enrollment or Special Enrollment period.
- Plans are required to cover a at least one drug per drug class, but the minimums can vary by state.
- All pregnancy costs are covered.
- Full mental health coverage is provided. However, each state has a different definition of mental health services that are required to be covered.
- Substance use disorder services, such as rehabilitation, are covered by an ACA plan.
- All preventative services are covered without any cost-sharing requirements.
- Coverage for pediatric oral and dental care is provided.
- An ACA plan lets you avoid any health care insurance related tax penalties.
While choosing health insurance try to shortlist 2 to 3 insurance plans. Do not always choose the one with a low premium instead, check for its coverage and compare it with your needs. Always remember everyone in your family needs health insurance that will support you financially during any medical emergencies. Choose your health insurance wisely to get the right benefits.