Buying health insurance involves more than just signing up. How do you know if you have the right type of coverage? Or the correct amount? Start by deciding what your health needs are. Then you can see which plans best meet your needs.
First, it helps to understand some basic terms. A health plan is a contract or agreement that details your relationship with your providers (those who provide health services) and the issuer (the insurance company that issues the plan). A plan’s Summary of Benefits tells you:
- Covered Services – Which medical services are eligible for coverage and which are not.
- Provider network: which doctors, hospitals, laboratories, and other providers you should consult to get the best price.
- Monthly premium: how much you pay to be covered by the plan.
- Shared cost: how much you pay to use health services. This can include a deductible, copays, and coinsurance.
Choose a plan that meets your health needs
Health plans come in many shapes and sizes. To see if a plan meets your needs, start by finding out what your needs are. You can then shop around to find the coverage that fits your budget.
- What providers? If you have preferred doctors and hospitals, check to see if they are in the provider network of any plan you are considering. By using network providers, you always pay the lowest cost for care. Keep in mind that different plans from the same insurance company may have different provider networks.
- Who is covered? Decide if you want your coverage to include immediate family members.
- What care do you need? The amount and type of care you need affect the cost of the plan. If you are young and healthy, you may not need to see your doctor as often as an older person or who suffers from a condition such as diabetes or heart disease.
- Do you take medication? If so, you may want a plan that covers prescription drugs. Otherwise, you may want to skip the plans that include recipes, at least, for now. If your prescription needs to change in the future, you can switch to a prescription plan later.
- Are you planning a family? If so, choose a plan that includes care during pregnancy and delivery. Otherwise, you can choose a plan that does not cover those services. Either way, most plans cover pediatric care for children.
Understand your costs
Patients with medical coverage generally pay two types of costs: The monthly premium is the cost to have the plan available for one year. Premiums are paid to the insurance company. Cost-sharing is the cost of using the plan when you see a provider. There are three types of cost-sharing, which are generally paid directly to the provider:
- Deductible – How much you must spend on health care at the beginning of the plan year before your plan begins to pay its share of the cost for your care. The deductible is reset to $ 0 each year.
- Copayment – A flat fee that covers your share of the cost of medical service. The plan generally pays the rest. The copayment may vary depending on the service.
- Coinsurance: A percentage of the cost you pay for a doctor’s appointment, hospital stay, or other health care service. Many plans have a 20% coinsurance for certain services, which means the insurance company pays the rest.
Gather the information you will need before you start looking for health plans. Whether you’re exploring on your own or through an insurance agent, it’s a good idea to have this information available for easy reference:
- Social security numbers of all family members you want to include for coverage
- Income information, such as pay stubs, W-2 forms, or tax returns
- Policy numbers of all the health plans you currently have
- List of all the doctors, hospitals, and other healthcare providers you use, including contact information
- List of all the prescription drugs you use