Tips For Choosing A Health Insurance Plan
The open enrollment period for choosing a health insurance plan that is ideally suited for your family is always brief, but it is crucial to avoid rushing through and take your time to evaluate costs and benefits. Hasty decisions lead to wrong choices, which are costly and could deny you the coverage you need.
This article will walk you through practical and pragmatic tips for choosing a health insurance plan that properly addresses your healthcare needs.
Choosing the Health Insurance Marketplace
The first step in choosing a health insurance plan is to choose your marketplace. Most people get health insurance from their employers, eliminating the need for those people to seek out individual marketplaces or government insurance.
If your employer doesn’t provide health insurance, you need to seek an alternative plan in the exchanges. However, plans in the healthcare marketplace come with hefty costs as employers help reduce the monthly premiums significantly. If your job doesn’t come with health insurance, it is crucial to explore the federal or state public marketplace.
Focus on seeking out affordable monthly premiums during the open enrollment period. You can rely on the federal marketplace, but if your state has an exchange, that is the ideal route to take. Many people consider either exploring health insurance options from a private exchange or dealing directly with an insurer.
However, if you consider these two options, you will no longer be eligible for the premium tax credit, which is basically income-based discounts that reduce your monthly premiums. You can choose between silver, gold, and platinum, depending on your needs and requirements.
Types of Health Insurance Plans
The next step in choosing a health insurance plan is to select the right type by examining the various pros and cons. Experts strongly advise starting with the simplest, most common health insurance types.
The most common health insurance types are as follows:
- Indemnity or fee-for-service plans
- Health Maintenance Organizations (HMOs)
- Preferred Provider Organizations (PPOs)
Indemnity or Fee-for-Service Plans
These traditional health insurance plans allow you to choose any doctor or healthcare organization without requiring referrals.
Under fee-for-service or indemnity plans, your insurance provider will allocate a set portion for your healthcare charges, and you will pay the remaining amount.
These are the most flexible plans, devoid of set restrictions regarding the providers or primary care physicians (PCPs) you can choose. However, the most obvious downside of indemnity plans is the inability to control costs.
Insurance providers shift more cost towards the consumer through higher monthly premiums and hefty deductibles.
Health Maintenance Organizations (HMOs)
A health maintenance organization refers to an association of medical facilities and healthcare professionals that offer a package of healthcare services at a fixed rate.
An HMO plan provides a primary care physician but does not offer coverage for specialist care unless the physician, who is appointed as the gatekeeper for further care, deems seeking a specialist necessary and recommends an in-network referral.
While an HMO insurance plan reduces out-of-pocket expenses, it does not offer coverage for services outside the network, except in cases of a real emergency. Patients are dependent on the referrals and references of the physician or gatekeeper that remain in their coverage network
In some instances, patients are deprived of the medical care they require simply because their physician does not provide the necessary or correct referral.
Preferred Provider Organizations (PPOs)
A preferred provider organization offers the managed care element of an HMO, but it provides enhanced flexibility as patients can seek professionals and facilities outside the network as they deem fit for their medical care.
However, the benefits are lesser when you approach professionals outside the network, increasing your out-of-pocket expenses. If you seek flexibility and independence of choice, PPO is a better option for you.
Comparing Networks and Costs
While choosing a health insurance plan, it is crucial to compare costs and health plan networks. Costs are significantly lower when you approach in-network healthcare professionals because insurance providers can lower rates with their in-network professionals. However, when you seek healthcare or services outside the network, your out-of-pocket expenses increase considerably.
If you have a preferred specialist and want to continue seeing them, be sure to investigate whether your preferred doctors are in the provider directories of your chosen plan. You can also consult your doctors if they are involved in any health plan that meets your requirements.
It is wise to choose a healthcare plan that comes with an extensive network so you can get a wide range of choices, especially if you are based in a more rural or remote community. You are advised to avoid considering plans that do not offer any local in-network healthcare professionals.
It is crucial to compare out-of-pocket expenses. The plan summary of benefits will walk you through all the advantages of your chosen plan and the out-of-pocket costs you are likely to incur. Be sure to pay close attention to the meaning of the health insurance jargon so you can understand all the elements of the summary.
As a consumer, your costs include monthly premiums, co-payments, co-insurance, and deductibles. In many cases, your total out-of-pocket spending for the year is limited, so be sure to check your plan information for the maximum out-of-pocket limit.
Choosing a Health Insurance Plan: Final Thoughts
The lower your monthly premiums, the higher your out-of-pocket expenses are likely to be. Consider choosing a health insurance plan that reduces your out-of-pocket costs and offers more variety. Higher monthly premiums are often not the issue; more significant out-of-pocket costs are.
If you need to see a primary physician or specialist frequently, are likely to need emergency care, require expensive medications, or have small children, your ideal plan is likely to have higher monthly premiums and lower out-of-pocket costs.
If you’ve been diagnosed with a chronic illness, such as diabetes, or have surgery scheduled in the near future, you need a plan that pays a significant portion of your healthcare expenses.
You are strongly recommended to use Health Plans to apply for quotes from multiple insurance providers and carriers. This will help you compare prices and benefits and make an informed decision. Health Plans makes research incredibly easier and straightforward by bringing quotes from leading providers at your fingertips.