Health insurance is complicated. So complicated, in fact, that many people feel overwhelmed at the thought of just choosing a plan. Because health insurance is so important, you can’t afford to hesitate when it comes time to pick the right coverage for you.
How do you make a stronger decision? You need to know a thing or two about health insurance to prepare yourself for the right next step. A bit of education will go a long way, so let’s get started.
Key Things While Choosing Health Insurance Plans
In this article, we’ll cover everything you should know about health insurance plans before choosing one for yourself.
1. How to Compare Plans
First, you need to know how to compare plan types. Depending on whether you get your insurance through your employer or the healthcare marketplace, there are a number of different plan types to choose from.
The type of plan you pick will affect your network of providers, who you can see, and whether you need a referral. Similarly, it might affect how much you pay. In general, the more options and flexibility you have in providers, the more you’ll need to pay. Here’s a quick breakdown:
- Health Maintenance Organization (HMO) – With an HMO, you’ll need to stay in-network except in emergency situations. You’ll need a referral from your primary care doctor for specialist care, but you’ll also pay less out-of-pocket.
- Preferred Provider Organization (PPO) – Next, a PPO requires no in-network doctors to get coverage, but you’ll pay less for in-network care. This is one of the most flexible options.
- Exclusive Provider Organization (EPO) – As the name suggests, you’ll need to stay in-network to get care. However, you can still see specialists without a referral. This is a good combination of both an HMO and PPO.
- Point of Service Plan (POS) – Finally, with a POS plan you don’t need to stay in-network, but you will need a referral to go out of network. Again, your primary doctor will coordinate your care.
Now that you understand these health insurance plan types, it’s time to start comparing. View health insurance offered in your area to see what works best for your needs.
2. Understanding Health Networks
Next, you need to know how health networks work. Whenever you go to an in-network doctor or facility, you can expect to pay less. Why is that? Your insurance company contracts lower rates with these providers. That means when you go out-of-network, this same agreement isn’t in place, driving up rates.
If you already have a preferred doctor, it can be easier to choose the right health insurance plan that includes them. Otherwise, if you don’t have a preferred doctor or expect to need specialist care, it’s a good idea to opt for a flexible plan so you can find the right care you need.
3. Know the Costs
Do you understand how the costs work when it comes to health insurance? If not, you’re not alone. While most people only focus on the premium, there’s so much more to know. The monthly premium is the price you pay each month to keep your plan active. Beyond this, you’ll also need to consider out-of-pocket costs.
You’ll also need to pay things like deductibles, copayments, and coinsurance. How much you pay will depend on your premium. For instance, higher premiums usually result in lower out-of-pocket costs and vice versa.
Do you need a higher premium plan? Consider how often you use medical centers. Do you frequently see a doctor or specialist? Have you been the emergency room often? Do you have small children or are you expecting a baby? If you said yes to any of these, it could be worth paying more in premiums to avoid high out-of-pocket costs.
Bonus: Extra Benefits
Last but not least, consider any extra benefits. A lot of people don’t realize what’s covered by their plans and what’s not covered. Things like dental and vision insurance usually aren’t covered, and you’ll be left with a gap in your coverage.
It’s worth exploring any extra benefits. For example, you might have access to telemedicine apps, low-cost or free preventative care, or discounts for health living. All of these things could help you stretch your health insurance further.
Make a Healthy Choice About Insurance
It’s easy to overlook health insurance as something that’s not important, especially if you feel like you’re healthy already. Unfortunately, there’s no way to predict the future. You could need medical attention tomorrow, and it’s always better to be safe than sorry.
Because you never know what’s around the corner, do your best to protect yourself today. These tips above will help you use your health insurance to the fullest and make the right choice the first time.