A Beginner’s Guide to Choosing Health Insurance
Has your health plan always been picked out by your parents or guardian? Are you wondering how to go about choosing health insurance on your own? Here’s how!
The majority of Americans — 91.2 percent — have health insurance. But, many of those people are not satisfied with their health care plan.
Perhaps their deductible is too high, or they don’t have dental coverage or access to vision care. Maybe the nearest in-network clinic is far away from their house.
How do you make sure you get an insurance plan that actually meets your basic healthcare needs? How do you make sure your insurance plan works for you?
If you need to sign up for health insurance and aren’t sure which kind of plan to choose, keep reading.
Here are some guidelines that will make the process of choosing health insurance much easier.
Why Does Health Insurance Matter?
Do you even need health insurance? Technically, no, you don’t, now that the government’s individual mandate has been repealed.
That being said, just because you don’t have to have insurance, that doesn’t mean you should forgo it altogether.
There are lots of benefits that come with having a good health insurance plan, including the following:
- Save money on prescription drugs
- Get access to free or low-cost preventative care
- Avoid costly emergency room visits
- Pay less money for other doctor’s visits
Health insurance also provides you with peace of mind. You can rest easy knowing that, should an emergency arise, it will be easier for you to pay for your medical expenses.
Guidelines for Choosing Health Insurance
Okay, you’re convinced that health insurance is a positive thing.
But, how do you choose a plan that will actually allow you to enjoy all these benefits? How do you sift through all the different plans out there — Medigap Plan F, HMOs, PPOs, etc. — and figure out which one is best for you?
Here are some guidelines that will make it easier for you to choose the right health insurance plan:
Find Your Health Care Marketplace
Most people obtain health insurance through their employer. You can search for an alternative plan if you don’t want to use your employer’s health insurance, but that usually not the best or most cost-effective approach.
If you’re getting health insurance through your employer, they will have a few different plans for you to choose from.
If your employer doesn’t offer health insurance, you can also search the online marketplace, HealthCare.gov. From there, you can either use your specific state’s health insurance exchange, or you can use the federal marketplace.
Understand the Different Types of Plans
Once you figure out where your health insurance is coming from, it’s time to start looking at and comparing different types of health care plans.
This is often where people get overwhelmed and end up choosing the cheapest plan possible. It shouldn’t come as a surprise that this is not the best approach to take if you want a good health care plan.
In order to choose the right insurance plan, you need to first understand the different types of plans out there. Some basic types of insurance plans you can choose from include:
- Health Maintenance Organization (HMO): This type of plan offers lower out-of-pocket costs and is best for people who want or already have a primary physician to coordinate their health care.
- Exclusive Provider Organization (EPO): This is best for people who want lower out-of-pocket costs and no required referrals for specialists.
- Preferred Provider Organization (PPO): This is better for people who want lots of provider options and no required referrals for specialists.
- Point of Service Plan (POS): This is a less-expensive plan that provides more provider options and is best for folks who have a primary physician who coordinates their care.
Something to consider when choosing between the different types of plans is how much control you want to have over your health care.
For example, with an HMO or POS, you have to see your primary care physician before you schedule a procedure or visit a specialist. This is a downside to a lot of people. But, some people actually prefer it because they don’t have to do the work of finding and scheduling an appointment with a specialist.
On the other hand, for people who want full control over the providers they work with, a PPO or EPO plan is best. They get to work with whomever they choose, although costs are lower if the physician is within their network (in the case of EPO plans).
PPO plans are better for folks who live in remote areas and often are forced to go out of network to get the care they need.
Find Out if You Qualify for Medicaid
If you think you can’t afford health care, you might want to look into government plans like Medicaid.
Medicaid is a public health plan that provides low-income families and individuals with health insurance.
Most people whose income is between 100 and 400 percent of the federal poverty line qualify for Medicaid or a government subsidy that will help to offset the cost of health insurance.
Compare Out-of-Pocket Costs and Benefits
In addition to the types of plans, be sure to pay attention to the out-of-pocket costs and specific benefits each plan offers.
When it comes to out-of-pocket costs, most people assume that the lower the out-of-pocket costs are, the better. This isn’t necessarily the case, though.
If you see the doctor frequently or take expensive medications, lower out-of-pocket costs and higher monthly premiums are typically a better option. This is also a good idea if you suffer from a chronic health condition (diabetes, cancer, etc.) or plan to have a baby.
On the other hand, you may want to choose a plan with lower monthly premiums and higher out-of-pocket costs if you rarely visit the doctor and are young and in generally good health. This is also a good option if you can’t afford higher monthly premium payments.
Want to Learn More About Choosing Health Insurance?
Choosing health insurance can seem pretty overwhelming at first. But, as you can see, it’s not quite as complicated as people make it out to be.
You now know how to go about picking a health insurance plan for yourself. But, what about for your kids?
If you’re not sure how to choose a healthcare plan that also benefits your children, check out this article today. It’s the ultimate guide to choosing a health insurance plan for children under the age of 18.