Health Insurance Plan
Usually time is limited to choose the best health insurance plan for your family, but the rush and choosing the wrong plan can be costly. Here’s an end-to-end guide to choosing the best plan for you and your family, whether it’s through the federal market or through your employer.
Step 1: Choose the market for your health plans
Most of the people who have health insurance get it through their employer. If you are one of those people, you don’t need to use state insurance exchanges or markets. Basically, your company is your market.
If your employer offers health insurance and you want to look for an alternative plan on the exchanges, you can. But the plans on the market are likely to cost a lot. This is because most employers pay a portion of workers’ insurance premiums and because plans have lower overall premiums on average.
If your job does not provide health insurance, shop at your state’s public market, if one is available, or the federal market to find the lowest premiums. You will be sent to your state’s exchange office if there is one. Otherwise, you’ll use the federal market.
You can also purchase the health insurance through a private exchange or directly from the insurance company. If you select these options, you will not be eligible for premium tax credits, which are income-based deductions on your monthly installments.
Step 2: Compare types of the health insurance plans
You will come across some alphabet soup while shopping; The most common types of health insurance policies are HMO plans, mailboxes, e-mail boxes, or point of sale plans. The type you choose will help determine the out-of-pocket costs and which doctors you can see.
As you compare plans, look for a summary of benefits. Online marketplaces usually provide a link to the summary and display the cost near the title of the plan. The Provider Directory, which lists the doctors and clinics that participate in the plan’s network, should also be available. If you’re with an employer, ask your Workplace Benefits Officer for a summary of benefits.
What about an HDHP with the Health Savings Account?
A high-deductible health plan can be any of the above types – HMO, PPO, EPO, or POS – but it follows certain rules to be “HSA-eligible.” These HDHPs usually have lower premiums, but you pay higher out-of-pocket costs, especially at the beginning. They are the only plans that qualify you to open a HSA account, which is a tax-free account that you can use to pay for health care. If you are interested in this arrangement, be sure to learn the ins and outs of HSAs and HDHPs first.
Step 3: Compare health plan networks
The costs are lower when you go to an in-network doctor because insurance companies contract with network providers at lower rates. When you go out of the network, these doctors don’t have rates agreed upon, and you’re usually in a bind for a higher portion of the cost.
If you prefer doctors and want to keep seeing them, make sure they’re in the provider’s directories for the plan you’re considering.
Step 4: Compare out of pocket costs
The out-of-pocket costs are almost as important as the network. The summary of benefits for any plan should clearly state how much you will pay out of pocket for the services. The Federal Market’s website provides snapshots of these costs for comparison, as do many state markets.
This is where it helps to know some health insurance vocabulary. As a consumer, your portion of costs consists of deductibles, co-pays, and coinsurance. The total amount you can spend out of your pocket in a year is limited, and this maximum out of pocket is also included in your plan information. In general, the lower your premium, the more costs you pay out of your own pocket.
Step 5: Compare the Benefits
By now, your options will likely have been narrowed down to a few. For further screening, refer to this summary of benefits to see if any of the plans cover a broader range of services. Some may have the better coverage for things like physical therapy, fertility treatments, or the mental health care, while others may have better coverage for emergencies.
If you skip this quick and important step, you may miss out on a plan that is more convenient for you and your family.
Checklist: Choosing a Health Insurance Plan
Here is a quick points of the above steps:
- Go to your market and see your plan options side by side.
- Decide what type of plan — HMO, PPO, EPO, or POS — is best for you and your family, and whether you want an HSA-qualified plan.
- Eliminate plans that exclude your doctor or any local doctors in your network of providers.
- Decide if you want more health coverage and higher premiums, or lower premiums and higher costs out of your own pocket.
- Make sure that whatever plan you choose will pay for regular and necessary care, such as prescriptions and specialists.