When you’re in good health, choosing a health insurance plan may be the last thing on your mind. But even if you and your family are in good health, the plan you choose can have a huge impact on your financial health. Of course, deciding on the right health insurance plan for you and your family can feel both confusing and overwhelming. Thankfully, you can use our step-by-step guide to figure out exactly which plan might best fit your future and present health needs.
The first step in choosing a health insurance plan is knowing whether or not you can get insurance through your employer. If your employer does offer health insurance, your company essentially functions as your marketplace. It’s usually a good idea to use your company’s health insurance; while you still can shop for alternative options through the government exchanges or marketplace, they are likely to cost a lot more. This is both because employers usually pay a portion of their employee’s insurance premiums, and because these plans usually have lower total premiums.
If your employer does not provide health insurance, you’ll want to shop for plans on your state’s public marketplace or on the federal marketplace. Start by going to HealthCare.gov and entering your ZIP during open enrollment. If available, you’ll be sent to your state’s public marketplace. Otherwise, you’ll use the federal marketplace.
Alternatively, you can purchase health insurance through a private exchange, or directly from an insurer. However, note that if you choose these options you won't be eligible for premium tax credits, which are income-based discounts on your monthly premiums.
Once you’ve decided which marketplace you’ll be using to search for the right insurance plan for you, you’ll encounter a variety of different types of health insurance plans. The most common policies are HMOs, PPOs, EPOs and POS plans. Each of these will have different out-of-pocket costs and in-network providers, which will help you figure out which one is right for you.
To compare plans, most online marketplaces provide a link to a summary of benefits. If you’re using your employee’s insurance, your workplace benefits administrator can send you the summary of benefits. When comparing plans, you should consider you and your family’s medical needs; look at what treatments you’ve needed in the past, and think about what you might need in the future.
TIP: Because HMO and POS plans require referrals - which means your primary doctor will choose specialists for you - most people prefer other plans. However, HMOs are usually your best bet if you are looking for the cheapest overall plan.
TIP: If you choose a POS plan and decide to seek care from an out-of-network provider, make sure to get the referral from your doctor ahead of time to reduce out-of-pocket costs.
Each plan will have a provider directory where you can see which doctors are in-network for specific plans, which is important to know because it is always cheaper to go in-network. If you’re seeing a particular doctor that you want to continue seeing, check the provider directories to see which plans they are in-network with. But if you don’t have a preferred doctor, a plan with a larger network will give you more choices.
TIP: Consider choosing a PPO if you live in a remote or more rural area with limited access to providers, as this may mean you’re forced to go out of network.
You can compare out-of-pocket costs by using each plan’s summary of benefits. Consider financial obligations associated with each plan such as your deductible, copayments, and coinsurance. A general rule of thumb is that the lower your premium is, the higher your out-of-pocket costs will be. Use out-of-pocket costs to narrow down your choice of plans.
TIP: Consider a plan with higher out-of-pocket costs and lower monthly premiums if you think you’ll have trouble affording the higher monthly premiums for a plan with lower out-of-pocket costs, or if you are in good health and rarely see a doctor.
The final step in choosing the right plan for you is to evaluate each plan’s scope of services. For example, some plans may provide better coverage for things like mental health services or fertility treatments than others.