What You Need to Know Before You Pick a Health Insurance Plan
Picking a health insurance plan can seem like quite the daunting task. The healthcare industry alone is estimated to be worth $3 trillion, and that’s just in the United States! So it’s no surprise that there are more than half a million health insurance plans available, each of which comes with its own set of pros and cons, fees, and deductibles. If you’re unsure of what to look for when choosing your health insurance plan, we have created this guide to help you through the process.
Decide what’s most important
Choosing the right health insurance plan for you and your family can be confusing. But it doesn’t have to be. Below, we answer some of the most important questions you might have about your healthcare coverage.
The Affordable Care Act made it illegal for health insurance companies to deny coverage based on preexisting conditions – but that law is currently under review by the Supreme Court of the United States.
Coverage & copayments
Most health insurance providers offer copayments, also known as coinsurance, which is the amount you are required to pay in addition to your health care provider’s fee. Coinsurance can vary by type of procedure and whether it is an in-network or out-of-network provider. While most copays are usually under $50, there are some cases where they can be up to 50% of the total cost of the service rendered. It is important to understand that for some procedures, you may have to meet a deductible before receiving any coverage. For example, with many plans you must first meet your deductible before your plan starts paying benefits.
In-network vs. out-of-network
Your doctor might be part of your network, but the hospital you’ll use might not. Make sure that if you’re having surgery or other procedures, the hospital accepts your insurance before going through with anything. For example, some hospitals participate in their patients’ health insurance networks while others will only work with certain insurers.
Doctors and specialists can also be categorized as being in-network or out-of-network.
High deductible vs. low deductible
Some health insurance plans have high deductibles, so you’ll need to pay the initial cost of your care up front. With a low deductible, you typically won’t have any out-of-pocket costs until you reach your deductible. Low deductibles tend to be more affordable because they’re less likely to cover as many services, but it may help ease the burden if you know what will be covered ahead of time. Higher deductibles are often paired with an HSA (health savings account) that can roll over year after year and build up funds for future medical expenses. You might also want to consider catastrophic coverage which covers some medical emergencies or illnesses at a very low price point.
Comprehensive vs. catastrophic coverage
The two main categories of health insurance are comprehensive and catastrophic. With comprehensive coverage, your insurer pays most or all medical bills. If you have catastrophic coverage, the insurer will only pay in case of emergencies or serious accidents. Which one is right for you?
A good rule of thumb is that if you’re healthy and don’t expect any major illnesses in the near future, choose catastrophic coverage. On the other hand, if you have chronic conditions like diabetes or cancer, then a more expensive plan with broader coverage may be worth it.
One of the most important things to consider before you pick a health insurance plan is what kind of coverage you need. The Affordable Care Act, also known as Obamacare, does offer some protections for people with pre-existing conditions. If your insurance plan goes out of business or changes plans, your coverage won’t be cancelled or changed in any way if you sign up for the same kind of plan within that time frame.
Other things to look at are co-pays and deductibles. Co-pays are how much you have to pay when seeing a doctor or filling a prescription and deductibles are how much money you must spend before your health insurance starts paying for medical care. For example, if your deductible is $2,000 then this means you will have to pay all medical expenses (including prescriptions) until it reaches $2,000 – but once it does reach that amount then the insurance company will start paying.
When you’re looking for the right health insurance plan, take some time and compare all of your options. This way, you’ll find the coverage that’s best for you and your family. And make sure to work with an insurance provider that offers flexible payments so it’s easier on your budget. Check out our blog for more tips about health insurance! We have answers to FAQs like Does my spouse need their own plan? And How do I figure out what level of coverage is right for me?