How to Choose the Best Health Insurance Plan
For most people, shopping for health insurance is right up there with making a budget on the list of things they have to do but dread handling.
It might be frustrating at first, but it’s important to do your homework and find a health insurance plan that will provide you with peace of mind.
Luckily, we’re here to help make the process as painless as possible. Read on to learn everything you need to know about choosing the best health insurance plan.
Different Types of Plans
When you start looking for the best health insurance plan, take time to educate yourself on the different options available.
This isn’t as hard as you might think. Companies like Insurdinary usually make it easy for you to see your choices online and understand the benefits and drawbacks of each one.
Some of the different plans you might want to consider include:
Preferred Provider Organization Plans
Preferred Provider Organization plans encourage you to seek treatment from a pre-selected group of doctors and hospitals. This group is known as your network.
Insurance companies have a contract with these providers to offer services to their customers at a discounted rate.
With this type of plan, you’ll typically have an annual deductible that you need to pay before the insurer will start to cover your bills.
You may also need to pay a co-payment for some service, or a co-insurance. Co-insurance requires you to cover a percentage of the total cost of your medical bills.
Those who need flexibility and those who like having lots of options can benefit most from a PPO plan.
Health Maintenance Organization Plans
Health Maintenance Organization (also known as HMO) plans come with lower out-of-pocket expenses than PPO plans. But, they also typically give you fewer options when it comes to choosing hospitals and physicians.
You may also need to name a primary care physician when you sign up for this type of plan. The primary care physician will handle most of your health concern and refer you to a specialist when necessary.
HMOs often offer coverage for a variety of preventative services like immunizations and checkups, and co-payments are usually lower.
Those who want a lower premium and want access to good preventive services can benefit most from HMO plans.
Point of Service Plans
Point of Service (POS) plans combine features of HMO and PPO plans. They often require you to choose a primary care physician within your network, and the physician’s services usually are not subject to the plan’s deductible.
POS plans are good for those who need flexibility and lower premiums but also like having a primary care physician to coordinate their care.
Indemnity Insurance Plans
An indemnity plan is also known as a fee-for-service plan.
With this kind of plan, a pre-determined amount of certain services is covered by the insurance company. You’ll typically pay for your expenses out of pocket first, then file a claim in order to be reimbursed.
If you like a lot of flexibility and want to have your choice of doctors and hospitals, this kind of plan may be best for you.
You’ll probably face higher rates with this plan. There will be more administrative work since you’ll have to file claims for reimbursement.
But, these burdens are worth it to those who prioritize having control over their doctors and the services they receive.
Health Savings Accounts
A health savings account, by itself, is not actually a health insurance plan. But, it is a good addition for people who want to save money on their medical expenses.
HSAs are savings accounts that can be used with certain insurance plans to pay for expenses like co-pays and prescription drug costs.
The money in an HSA typically rolls over from year to year and can accrue interest. You may also be able to use the funds for other life events, but there may be penalties that come with it.
HSAs are a good option for people who want to save money and don’t mind having a higher deductible in exchange for more control over their expenses.
Finding the Best Health Insurance Plan
Once you learn about the different types of insurance plans out there, you’ll need to take some other factors into account before making your decision. Some things to consider include:
Think of the Worst-Case Scenario
Don’t just choose the lowest-cost option when you’re choosing between the different types of health insurance.
But, you should also take some time to think about worst-case scenarios. Emergencies happen, and you could end up having an expensive procedure on your hands and insufficient coverage to help pay for it.
Before you decide on a specific plan, look at the extent to which it covers major procedures and catastrophic illnesses.
No one wants to think about these kinds of situations, of course. But, it’s better to prepare for the worst and hope for the best.
Think of the Total Cost
Don’t just look at a plan’s monthly premium. Take into account all the cost-sharing provisions, including co-pays and co-insurance. These can add up really quickly, especially co-insurances.
Some people get stuck having to pay 50 percent or more of expensive procedures. This could have been avoided if they’d looked closer instead of just opting for a plan with a lower premium.
Make Sure Your Drugs are Covered
The best health insurance plan will also provide a certain amount of prescription drug coverage. After all, it doesn’t matter if you have insurance if you still can’t afford to pay for your medication.
Keep in mind that not all prescription medications will be covered by even the best insurance plans. For example, you may have to foot the bill for drugs to help you quit smoking. This is because smoking is considered a lifestyle condition.
On the other hand, blood pressure medication, insulin, and other such drugs are almost always covered.
Need More Help Finding the Best Health Insurance Plan?
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