Choosing the best health insurance plan can be a daunting and complex process, especially for the first time. Even when several articles and step-by-step guides abound the internet, the process can still be confusing for some of us. This is why we decided to share with you three basic aspects to consider about how to choose a health insurance plan.
Ideally, we would need to ask three questions only in order to have a clear idea of how to choose a health insurance plan. First, we need to ask ourselves if we really need health insurance. Then, we need to know how many types of health insurance are there. Lastly, we need to know how much it would really cost. Below you’ll find the answers to these important questions on how to choose a health insurance plan.
Since the Affordable Care Act (ACA) took effect, having a health insurance plan became compulsory for all American citizens. Even when there are some exceptions, we can find ourselves having to pay a fine if we don’t have coverage. Besides, there are more advantages than disadvantages of having a health insurance plan.
If we have an accident, medical emergencies can have a significant impact on our finances. According to several reports, medical bills are the main reason for people to file for bankruptcy. These situations can be avoided if we have health insurance. Also, health insurance has become more affordable than ever, and there sure is a policy that can fit your budget.
There are four main types of health insurance, and they all work with different medical networks. These include Preferred Provider Organization (PPO), Exclusive Provider Organization (EPO), Health Maintenance Organization (HMO), and Point of Service (POS).
With a PPO coverage plan, you have access to any medical provider you want to see. The advantage of this type of plans is that you get to decide which hospitals or physicians will treat you. The downside of these plans, though, is that if you decide to see a physician outside of the plan’s network, you would be subject to higher co-payments or deductibles.
Going for an EPO plan works differently. With this type of plan, we must see the hospitals or physicians that belong to the plan’s network in order for the insurance to cover the expenses. We still have the possibility of seeing a doctor outside the network, but in such case, we will have to cover all the expenses.
HMOs work similar than EPOs. You need to see a set of hospitals and doctors that belong to the plan’s network. The difference, however, is that you need to choose a Primary Care Provider (PCP). Your PCP will be in charge of your health services for you. HMOs are popular because they usually work with fixed prices for basically any service you need.
You still need to designate a PCP when working with POS plans. Again, they will take care of your health services for you. If you see a doctor outside of the plan’s network, you might have to cover most of the expenses. The convenient part of POS, though, is that if your PCP assigned you to an out-of-network doctor, the plan will cover the costs.
In most cases, what will help us decide on a given health insurance coverage plan is not the type of plan itself, but the overall cost of the plan. Getting as many details as possible about the corresponding premium, deductible, and possible copayments is essential. The premium is basically what you will be paying on a monthly basis for coverage. The deductible is the percentage of expenses you have to cover from your pocket before the insurance can take the bill. A copayment is a specific amount that you need to cover for medical services; the average co-payment runs around $30.
You have to balance between high premium and low deductible, or the other way around. Having a low premium payment means that we would have a high deductible payment. Look at all the options you have available and go for what suits your needs best. After all, a health insurance is not only for you, is for your family members too, and you want to make sure they are taken care of.