How to Choose Your Health Insurance
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Step 1: Find your marketplace
The first step in choosing the proper health insurance is determining where you are going to get your insurance. You can use your employer, a government run exchange, or a different marketplace.
A majority of individuals get their health insurance through their employer, since that is usually the least expensive option because their employer pays a portion of the premium.
Even if your employer offers health insurance, you can still choose a plan that is not offered by your employer. Many people look on state government health insurance exchanges. In addition to typically offering a large selection of plans, purchase on these exchanges may come with premium subsidies if you are eligible.
You can also choose to look for a health insurance plan on private exchanges or directly with insurers. Subsidies that you may be eligible for because of your income will not be available if you choose to use a private exchange or a direct insurer to locate a health insurance plan.
Step 2: Compare the types of health insurance plans
Comparing the different types of insurance plans is crucial, because the type of plan you choose dictates out-of-pocket costs and which physicians, hospitals and services are covered under your insurance. A benefits summary will help you compare the different health plans because it provides a concise list of cost and which doctors are covered in your network.
Step 3: Compare health plan network
The vast majority of insurance plans offer in-network provider services at lower cost, so if you want to continue to see a specific doctor you need ensure they are in your coverage network. A larger coverage network increases the number of doctors available for you to see, which can make getting health care easier.
Step 4: Compare out-of-pocket costs
The benefits summary of available health insurance plan should be listed on the marketplace you use. You are responsible for paying the deductible, coinsurance, and copayments for your health insurance plan. Every health insurance plan also has a maximum annual out-of-pocket cost that you have to pay, but the lower your monthly premium, typically the higher that maximum cost is.
Plans that pay a higher portion of your medical costs, but have higher monthly premiums, are better if:
- You see a frequently see a doctor, whether a primary physician or a specialist
- You need emergency care frequently
- You take brand-name or expensive medications on a regular basis
- You plan to have a baby, are expecting a baby, or have small children
- You have surgery planned
- You’ve been recently diagnosed with a chronic condition such as cancer or diabetes
Plans with higher out-of-pocket costs and lower monthly premiums are the better choice if:
- You can’t afford higher monthly premiums for a plan with lower out-of-pocket costs
- You are in good health and rarely see a doctor
Step 5: Compare benefits
After narrowing down your list of health insurance plans you should compare the benefits provided by each plan to ensure that you choose the plan that provides coverage for the services you need most. After your new health insurance begins you must make sure that your previous plan is discontinued.
Health Insurance Quality Categories
All these different types of health insurance can be offered in the four standard categories of health insurance: Bronze, Silver, Gold, and Platinum. Each category indicates how much of your costs will be paid by your insurance company:
- Bronze plans cover 60% of estimated typical annual medical costs
- Silver plans cover 70%
- Gold plans cover 80%
- Platinum plans cover 90%
The price of premiums increase the more medical costs your insurance company covers, but your maximum out of pocket expenses decreases the more medical costs your insurance company covers.
You may be eligible for a premium subsidy based on your income through a tax credit.
Catastrophic health plans are alternatives to the four standard insurance plans. Catastrophic plans have low premiums and extremely high deductibles. They are designed to leave you paying for the bulk of your routine medical costs, but provide backup if you experience serious medical conditions, like a heart attack or cancer.
Important Healthcare Terminology and Costs
The amount of money you have to spend for health services before your insurance company pays anything (except free preventive services)
Copayments and coinsurance:
Payments you make each time you get a medical service after reaching your deductible
The most you have to spend for covered services in a year. After you reach this amount, the insurance company pays 100% for covered services.
Information about Affordable Care Act Plans
- Enrollment is during the Open Enrollment or Special Enrollment periods for Obamacare plans and it typically takes 2-6 weeks for the stated coverage to begin.
- While your plan is available, you have coverage. You can switch your plan during the Open Enrollment or Special Enrollment period.
- Plans are required to cover a at least one drug per drug class, but the minimums can vary by state.
- All pregnancy costs are covered.
- Full mental health coverage is provided. However, each state has a different definition of mental health services that are required to be covered.
- Substance use disorder services, such as rehabilitation, are covered by an ACA plan.
- All preventative services are covered without any cost-sharing requirements.
- Coverage for pediatric oral and dental care is provided.
- An ACA plan lets you avoid any health care insurance related tax penalties.