Learning how to pick a health insurance plan is not a simple process. Health insurance companies design different plans for different needs.
Because you and your family will have a set budget, unique needs and a set time frame, there is no one size fit all plan that you can go to. Instead, you'll have to choose your priorities and pick a plan that fits them best.
How to Pick a Health Insurance Plan
The first thing that you need to think about is whether you want to go through an employer-provided plan or buy your own. In most cases, an employer-provided plan will be your best bet, as it will be more affordable (since your company may pay some of the fees and will be able to negotiate better rates than you can on your own). However, if you do want to at least look at other plans to see what's out there, the following list should clarify some things for you.
What Should You Compare?
There are three things that you should look at when comparing health insurance plans.
The deductible is the maximum amount of money that you have to pay for your care. This means that if you go to a doctor and have a deductible for $500 and are charged $1,000 for your care, you will cover $500 and the insurance company will cover the other $500.
Premiums are your monthly payments that you have to make to ensure that your plan is still active. Higher premiums mean a lower deductible, but will add up over time.
You should also always ask your insurance provider or agent about benefits associated with your plan. Always ask about pre-existing conditions, maternity care, the costs and co-pays associated with prescriptions, and other things that may be relevant to you.
Some plans offer access to health savings accounts, which are personal savings accounts that are tax-free and can be used to pay down healthcare costs.
What Types of Health Insurance Plans are Available?
Health insurance plans are offered in different formats. Each format, while performing similar or the same function, has a distinct set of pros and cons when it comes to the associated financial costs and general flexibility of where you can get treatment.
The traditional model for health insurance is called fee-for-service. Some healthcare companies will call these plans indemnity plans. In essence, these plans allow you to go to any doctor that you want.
These types of plans will only cover a specific amount of what the healthcare costs, depending on what treatment or procedure you get. You don't need insurance to approve your coverage or to refer you to a specific physician.
However, fee-for-service plans tend to have high premiums and high deductibles. Some plans may also force you to pay for your healthcare yourself, and then refund you at a later date.
This means that your money may be tied up for a long time until the insurance company approves your payment. In some cases, if your plan is determined to not cover your treatment, you may have to handle the whole cost of your procedure or care in the end.
One of the most common types of health insurance provider is a HMO, or health maintenance organization. HMOs have a network of doctors, and they charge an annual fee to access those doctors. This makes your monthly payments lower.
With HMOs, you need a referral to see a specialist. Without a referral, or if you go outside of your covered network, you will have to pay the full cost of your care out of pocket.
The other common type of provider are PPOs, which are preferred provider organizations. These work like HMOs, except when you go out of your network you are still covered, though for a smaller amount. Further, PPOs will cover specialist visits even if you don't have a referral, which gives you more flexibility than HMOs.
Exclusive Provider Networks (EPOs) are a hybrid system that do not need referrals for specialists. However, you have to pay completely out of pocket when you go out of network.
High deductible health plans are the most affordable type of health insurance plan available. Like their name indicates, there is a high deductible, which means that you are responsible for a large amount of your healthcare costs before coverage kicks in. However, these plans come with the lowest monthly premiums and are ideal for protecting against emergency medical bills.
With high deductible plans, you need to make sure that your deductible is not too high that it will cause you financial distress in case of an emergency.
Short Term Health Insurance Plans
Short term health insurance plans are another type of plan designed to guard against emergencies. They don't cover pre-existing conditions or things like pregnancy or drug prescriptions.
However, they will protect you against bills associated with accidents or sudden sicknesses. Click here if you're looking to learn more about short term health insurance plans.
Put the Time in to Find the Best Health Plan for Your Family
Picking the proper health insurance plan for your needs is an involved process. Don't expect to make a decision or change overnight. Doing your research is worth it because it can save you thousands of dollars in the long run.
For more information about how to pick a health insurance plan or any other general information about the healthcare industry, feel free to look through the publications section of our website. The blog covers topical current events, while you can find more in-depth articles and research in our research journals.