When evaluating health insurance options for yourself and your family, it’s important to take into account more than just the cost of the monthly premium. There are several other factors that should be considered to ensure you select the best plan for your needs. Here are five key factors to consider when choosing a health insurance plan.
1. Type of Plan and Provider Network
Health insurance plans come in various types, such as PPO (preferred provider organization), HMO (health maintenance organization), POS (point of service), and EPO (exclusive provider organization). Each of these plans may have limitations on the doctors and hospitals that you can use. Some plans only allow you to see healthcare providers within their network, while others may permit you to see physicians outside of their network at an additional cost.
If you have a preferred doctor or medical network, it is advisable to choose a health insurance plan that includes them. Going out-of-network may result in higher copayments or no coverage at all.
2. Deductibles
When choosing a health insurance plan, it’s important to consider the deductible. The deductible is the amount that you’ll have to pay out of pocket before your insurance starts covering the costs. For example, if your plan has a $2,000 deductible and you receive a hospital bill for $4,000, you’ll have to pay $2,000 first, and then your insurance will cover the remaining amount. Keep in mind that some services like preventive care, such as annual check-ups and mammograms, may be fully covered without having to meet your deductible first.
3. Co-pay or Coinsurance
When you have a health insurance plan, you may have to pay co-pays or coinsurance for
medical care. A co-pay is a fixed amount you have to pay for a doctor’s visit outside of
regular preventive care, while coinsurance is a percentage of the medical cost you’ll have
to pay for medical care after your deductible is met. For example, if your health plan has a
coinsurance of 80/20, you will have to pay 20% of the medical bill, and your insurance will
pay 80%. Co-pays usually do not count toward your deductible.
4. Prescription Coverage
When selecting a health insurance plan, it’s essential to know if your prescription medicines are covered. Each health plan has a list of medications they cover, called a formulary, which is divided into tiers based on the co-pay for each drug. For instance, Tier 1 medications may have a co-pay of $10, while Tier 2 medicines could cost $35. Therefore, it’s crucial to ensure that your medications are covered by the health insurance plan you’re considering.
5. Health Savings Account
Several health insurance plans with high deductibles allow you to create a health savings account (HSA) to reduce your expenses. An HSA functions as a savings account for your healthcare expenses. The funds in your HSA may be used to pay for co-pays, coinsurance, deductibles, and other medical costs within the covered year.
