Buying Health Insurance
It’s hard to overstate the importance of health insurance in today’s world. With health care costs rising quickly, just one accident or illness can lead to piles of bills and quickly-mounting debt.
The right health insurance plan can ensure that you get the health care you need for both routine care and in case of a medical emergency. Yet navigating the complex world of health care plans can be daunting.
Here are eight questions you should ask when shopping for a health care plan. Posing simple questions like these can help you understand each plan’s fine print. You should also be able to compare different plans to make sure that you are getting the best plan for you and your family.
What does the health insurance plan cover?
Under the Affordable Care Act (ACA, or “Obamacare”), most health plans today must cover, at a minimum, 10 essential health benefits. These basic include wellness care, obstetric and pediatric services, emergency and ambulatory services, mental health care, and prescription drugs.
Some plans will offer only these services. More comprehensive plans may cover a variety of additional services. Look carefully at the complete list of services that each plan covers to determine which plan will meet your family’s needs.
Does the plan cover prescription drugs?
Basic drug coverage is one of the 10 essential health benefits most health plans are required to cover. However, due to the expensive nature of prescription drugs, some health plans only offer a basic level of coverage or place heavy restrictions and limitations on their coverage.
So be sure to review carefully exactly what drugs the plans cover. You should also look for any restrictions or limitations on prescription drug coverage that the plan might include in its fine print.
What is the monthly premium?
There are two different elements of cost when it comes to health care plans. The first is the fixed cost you pay each month for your health plan, regardless of your health care needs. This is called the monthly premium.
The premium will vary depending on the type of plan you have, what is covered in the plan, and limits on coverage. It will also depend on how many people will need coverage under your plan.
Most insurance companies offer plans in tiers.
Base plans have low monthly premiums but only offer basic coverage and involve higher out-of-pocket costs. With each level on the tier, the monthly premiums go up but the coverage becomes more comprehensive and out-of-pocket costs lower.
In other words, it’s important that you NOT simply select the plan with the lowest premium because this could lead to large health-related expenses down the road.
What are the deductibles, copays, and co-insurances?
The other variables to consider when looking at cost is what you might pay should you need to utilize the health care plan over the course of the year. These costs are more complicated and difficult to predict (since none of us know what types of medical problems we might have in the future).
The three specific costs to look at are deductibles, co-pays, and co-insurance.
- Deductible: This is what you pay out-of-pocket before your health insurance kicks in. Most plans have some type of annual deductible. However, more comprehensive plans with higher monthly premium usually have lower annual deductibles.
- Co-payments (co-pays): This is what you pay out-of-pocket for each medical treatment. Co-pays are usually fairly small (from $20-$100 on average) but they can add up if you have many medical visits over the course of a year.
- Co-insurance: This is a percentage of the cost of a medical treatment that you must pay in addition to the co-pay. In most plans, co-insurance is applicable for emergency treatment or expense treatments, such as surgery. For example, if you have a covered surgical procedure, you may be required to pay 20% while the insurance plan covers the remaining 80%.
Depending on the type of plan you have and your medical needs, these out-of-pocket costs can really add up. However, many plans define out-of-pocket maximums, which puts a limit on how much you will have to spend out-of-pocket each year.
What are the coverage limits?
Most plans have an annual or a lifetime limit on how much you can utilize the plan. For most families, these limits are so high that they are unlikely to ever reach the limit of their policy. However, if you have significant and chronic health concerns, it may be useful to investigate plans with potentially higher coverage limits.
Will you need to change your doctor?
Most insurance plans only cover services provided by physicians, specialists, and hospitals inside their network. If you choose to utilize a provider or practice outside that network, you may be required to pay all or part of those costs out-of-pocket.
If you have an established physician or specialists that you want to continue seeing, be sure to check whether those physicians are covered by the insurance plan you are considering.
What extras does the plan cover?
Some health plans may offer additional “perks” that could help you stay healthy and save you money. If you are active, look for a plan that offers discounts on gym membership or coaching, for example. Some plans may include nutrition planning and dietary consultants, access to homeopathic and alternative therapies, or other add-ons that might be applicable for you.
What restrictions are there?
When you are worried about your health, the last thing you want to do is worry about how you are going to pay for health care services. So when selecting your health care plan, be on the lookout for specific restrictions or limitations that could affect your ability to get coverage down the road.
For example, many plans require you to get a referral from your primary care physician before seeing a specialists. Some plans also require that you notify your doctor within 24 hours of a visit to an emergency room.
Knowing these and other restrictions in advance will help you navigate the health care plan you choose so you don’t lose out on necessary coverage.
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