Step 1: Choose your health insurance marketplace
Depending on your options, how you shop for health insurance will vary.
If your employer offers health insurance
The majority of those who have health insurance do so via their employment. Unless you choose to hunt for an alternate plan, you won't need to use the government insurance exchanges or marketplaces if your company offers health insurance. However, market-based plans are probably more expensive than those provided through employers. This is due to the fact that most firms contribute to employee insurance costs.
If your employer doesn’t offer health insurance
To select the plan that's right for you, browse the federal marketplace or, if your state has one, the online marketplace. Go to HealthCare.gov and input your ZIP code to get started. If there is an exchange in your state, you will be directed there. You will use the federal marketplace if not. Additionally, you can buy health insurance directly from an insurer or through a private exchange. You won't be qualified for premium tax credits, which are income-based reductions on your monthly premiums, if you select these options.
Step 2: Compare types of health insurance plans
While looking for the greatest health insurance plan, you'll come across some alphabet soup. HMOs, PPOs, EPOs, and POS plans are the most prevalent varieties of health insurance policies. Your out-of-pocket expenses and your options for providers will be influenced by your decision.
Comparing health insurance plans: HMO vs. PPO vs. EPO vs. POS
Look for a summary of benefits
A link to the summary of benefits, which details all the charges and coverages of the plan, is typically provided by online marketplaces. There should also be a provider directory that has a list of the medical facilities and offices that are a part of the network for the plan. Ask your workplace benefits administrator for the summary of benefits if you're going through an employer.
Weigh your family’s medical needs
Consider how much and what kind of treatment you have already gotten. Despite the fact that it is hard to foresee every medical bill, being aware of trends can help you make a well-informed choice.
Consider whether you want a referral system of care
Plans that require referrals
Before arranging a procedure or seeing a specialist, you normally need to schedule an appointment with your primary care physician if you choose an HMO or POS plan that demands referrals. This requirement makes alternative plans more popular with many people. HMOs are typically the least expensive kind of health plan, but they do restrict your options to healthcare providers they have agreements with. One primary doctor oversees your whole medical care under HMO and POS plans, which might result in a greater familiarity with your needs and continuity of medical data. If you decide to use an out-of-network POS plan, be sure to obtain your doctor's referral in advance to minimize your out-of-pocket expenses. (With an HMO, you cannot leave the network unless it's an emergency.)
Plans that don't require referrals
An EPO or PPO may suit your needs better if you prefer to see specialists without a referral. (EPOs normally do not require a referral, but check the small print as some do.) If you can find providers who are in-network, which is more likely to be the case in a major metro region, an EPO may help you keep expenses down. If you reside in a distant or rural region with little access to healthcare providers, a PPO may be preferable since you may be required to travel outside of the network.
What about an HDHP with a health savings account?
Any of the four types of health insurance mentioned above, HMO, PPO, EPO, or POS, can be a high-deductible health plan (HDHP), as long as it complies with specific requirements to be considered "HSA-eligible." The normal premiums for these HDHPs are lower, but your out-of-pocket expenses are higher, especially at first. They are the only plans that let you open an HSA, or a health savings account, a tax-advantaged account you may use to pay for medical expenses. If you're considering this plan, make sure to educate yourself about HSAs and HDHPs first.
Step 3: Compare health plan networks
The medical facilities and providers with whom your health plan has partnered to deliver your care are referred to as members of your health insurance "network".
Why does the network matter?
Because insurance companies negotiate lower rates with in-network doctors, costs are lower when you visit an in-network physician. Out-of-network doctors don't have set fees, so you're usually responsible for a larger amount of the bill when you visit them.
Do you have preferred doctors?
Make sure your current medical providers are listed in the provider directories for the plan you're thinking about if you want to continue seeing them. Inquire with your doctors directly to find out if they participate in a specific health plan.
Is a large network important?
It's generally a good idea to go for a plan with a big network if you don't have a particular doctor so you have more options. If you reside in a rural area, having a broader network will be especially beneficial since it will increase your chances of finding a local physician who accepts your insurance. If at all possible, get rid of any plans that don't have nearby in-network medical professionals. You could also want to get rid of any plans that have a paltry number of provider selections in comparison to other plans.
Step 4: Compare out-of-pocket costs
Another important factor is out-of-pocket expenses, which are expenses that are not covered by your monthly premium. The amount you'll have to pay out of pocket for services should be made very clear in the summary of benefits for the plan. Similar to many state marketplaces, the federal online marketplace provides snapshots of these costs for comparison.
Know your health insurance terms
Understanding the definitions of the following key phrases in health insurance is helpful:
- Copay: You pay a set amount (like $20) each time you access medical care services or have a medical treatment.
- Coinsurance: This is the portion of a medical bill that you are responsible for paying (for example, 20%); your health insurance policy will cover the remainder.
- Deductible: Before your insurance begins to pay for covered medical services, you must pay this sum.
- Out-of-pocket maximum: The most money you will spend on your own health care in a year is this. Once you've used up this maximum, your insurance covers the remaining balance.
- Out-of-pocket costs: Copays, coinsurance, and deductibles are all additional expenses you have to pay for a plan.
- Premium: This is how much you pay each month toward your health insurance.
Higher premiums, more coverage
In general, the greater your premium, the lower your out-of-pocket costs, like as copays and coinsurance, will be (and vice versa). In the following circumstances, a plan with higher monthly premiums but higher percentage coverage of your medical costs would be preferable:
- You frequently visit a primary care physician or a specialist.
- Your need for emergency care is often.
- You frequently take pricey or name-brand drugs.
- You have young children, plan to have a baby, or are expecting a kid.
- You are scheduled to undergo surgery soon.
- You have been told that you have a chronic illness, such as cancer or diabetes.
A plan with larger deductibles and lower monthly premiums may be the better option if:
- The higher monthly premiums for a plan with reduced out-of-pocket expenses are beyond your means.
- You see a doctor infrequently and are in good health.
Step 5: Compare benefits
Your choices will probably have been reduced to a small number of plans by this point. The following are some topics to think about: Examine the services offered. Reread the list of perks to see which plans offer a greater range of services. Others may have superior emergency coverage, while some may have better coverage for things like physical therapy, reproductive treatments, or mental health care. You can miss out on a plan that is much more suited to you and your family if you skip this brief but crucial step.
Address any lingering questions
The best approach to get your queries answered in some circumstances may be to phone the plans' customer support number. Have a pen or technological device on available to take notes when the answers are given, and prepare your questions beforehand. Here are some questions you might put forth:
- I take a particular drug. How does that drug fit into this plan's coverage?
- Which medications are covered by this plan for my condition?
- Which maternal care fall under coverage?
- What happens if I become ill while visiting another country?
- What paperwork will I need, and how can I begin the enrollment process?
Summary: How to choose health insurance
Here’s a quick recap:
- Visit your online health insurance exchange to see all of the available plans.
- Choose the health insurance plan that is ideal for you and your family, whether it be an HSA-eligible plan or an HMO, PPO, EPO, or POS.
- Plan exclusions and lack of local doctors in the provider network should both be eliminated.
- Choose between greater health coverage and higher premiums or greater out-of-pocket expenses and reduced rates.
- Ensure that whatever plan you select will cover your routine and essential care, including medications and specialists.
