It’s health plan exchange season again. Many people who chose Obamacare insurance in the past are currently rethinking their strategies and options. This is because some of the previous options are not available anymore or their premiums are doubling. Therefore, it’s important to know all the options available for you to be fully covered. It will help you pay the minimum amount to get the most benefits. In this article, we will guide you how to choose a health insurance plan.
Firstly, there is HealthCare.gov, a site that can help you see what public benefits you can have. You can also check the healthcare.gov/lower-costs/ to see what options you might have.
You may want to ask yourself these questions before subscribing to a health insurance plan:
1. How often do you get sick?
Before choosing a health insurance plan, know how often you need to go to the doctor. This can help in determining on how much to spend on health insurance. Every insurance plan requires you to pay a premium, or pay the amount up-front each month.
If you don’t see yourself going to the doctor that often, you can look for a low premium plan. These plans have lower monthly costs, but they need you to pay in full. This includes many doctor’s visits and prescriptions until you reach a certain threshold, known as a deductible. Once you hit that deductible, full coverage kicks in. But you may want to read on for some caveats.
If you you’ll be visiting the doctor often, choose a plan with higher premiums that cover your medical bills. With those plans, you need to pay a small fee, known as a co-payment. “In a sense you’re paying in advance, knowing that you’re going to need more care,” says Steve Wojcik, Vice President of Public Policy at the National Business Group.
2. How much cash do you need in the bank for health insurance?
While plans with low premiums might seem appealing for people with few health issues, the decision can also depend on your budget.
If you have several hundred or thousand dollars in cash, you might not have an issue with a high-deductible plan. It may require you to pay for health services out of pocket until your deductible is met. Plus, if you don’t have many health issues, you would reap the savings of the lower monthly premiums.
However, if you expect to use your health insurance throughout the year, bigger premiums may make more sense. Take, for example, people who are planning for a baby or those treating a chronic condition.
Paying every month can help you avoid price shocks. Else it might cause you to fall behind on other bills, says George Lane, a principal at Mercer, a benefits consulting firm.
3. Will you be able to see your doctor?
Do you and the kids already have doctors you know and trust? Call their offices to see whether they’ll cover the plan you’re considering. Generally speaking, insurance companies charge higher fees to consumers who see doctors who aren’t in the plan’s network.
Some health insurance plans won’t cover any part of the bill for consumers who go outside of the network. Those extra costs may be manageable for occasional visits, but the fees can add up over time. So before you sign up for a plan, make sure the doctors in the network will meet your health needs, says Cynthia Cox, Associate Director of Health Reform and Private Insurance for the Kaiser Family Foundation.
Likewise, you should think about how much flexibility you need when it comes to choosing a doctor. Health Maintenance Organization plans, known usually as HMOs, tend to be less expensive. But have fewer choices when it comes to doctors. Consumers in those plans may need referrals from their primary care doctors before they can see a specialist. In addition, you cannot see a doctor who is not in the network.
People who want to choose their own specialists may want to go with a Preferred Provider Organization plan, or a PPO, which has more options.
4. Will your drugs be covered in the health insurance plan?
Also, find out if your medications will be covered, Cox says. If it isn’t, you will have to pay the full cost of the drug. If you have a high-deductible plan, you may need to pay for your prescription in full each month until you’ve paid your deductible. Review the list of covered medications, since those can change often, and factor those costs into your decision-making process.
5. What else can you do to lower your costs?
Once you’ve decided on a plan, you should consider other tools that can help you reduce the expenses. For instance, people with high-deductible plans may have the option of opening a health savings or a health reimbursement account. You can fund it with pretax dollars and pay for certain health-care expenses tax-free.
While some plans can be difficult to use, a family contributing a maximum of $6,750 may earn about $2,000 or more in tax savings each year. It also depends on their tax bracket. Money that isn’t used can be rolled over to pay for health costs in future years, Lane says.
People who don’t have high-deductible plans may be able to set up a flexible spending account. It can also funded with pretax dollars. But they have a smaller contribution limit and need to be used in full each year.