We’ve all been there. When it comes time to find a new health insurance plan, you sit reviewing the various elements of each policy. Your eyes glaze over and you think to yourself, “How do I choose the RIGHT health insurance?”
Comparing health insurance is difficult under the best of circumstances but, with all the new options available after the implementation of the Affordable Care Act, finding the right choice is harder than ever. HealthPocket has created this quick guide to help you compare health insurance options wisely, because wise decisions can mean thousands in annual savings and the proper protection for your needs. Before you compare health plans, you need to step back from that task and do a little homework:
There is a strong pull for people to choose the plan with the lowest premium possible. Cheaper is always better, right? Well not always, and that is especially true for health insurance. There is a natural tendency to underestimate health care needs. It’s now homework time and you should be as honest with yourself as possible:
Now that you have established your healthcare needs inventory, you can dive in a little deeper.
All healthcare providers are not created equal. Over the course of your life, you may have found a doctor or a hospital you love. It is important to understand that not all health insurance plans will be accepted by your provider. When you compare health insurance plans, you should always dive into all the provider networks available to you, and make sure you only choose a health plan that is accepted by your preferred healthcare providers.
Provider network types are one of the most under-examined issues in choosing a health plan. Most plans offer a health maintenance organization (HMO) option or a Preferred Provider Organization (PPO) option.Preferred Provider Organization (PPO)
HMOs and PPOs are both types of managed care plans where the plan has a network of healthcare providers (i.e. doctors, hospitals, pharmacies, etc.) from which to choose. Both HMOs and PPOs will offer you their lowest out of pocket payments for services received from inside the plan's network of healthcare providers. However, PPOs are likely to pay for some portion of the costs of a specialist outside the plan's network while an HMO may make you pay the full cost of this care if it is not delivered during a medical emergency. This can be a critical issue if you develop a medical condition where the best care is outside the plan's network of providers. PPOs also have the advantage of allowing you to see an in-network specialist without a referral from your primary care physician, while an HMO requires this referral. Point-of-Service (POS) plans have traits of both HMOs and PPOs. Like HMOs, they have a primary care physician that must be used for specialist referrals. However, like a PPO the POS plans may cover a portion of the medical costs for an out-of-network healthcare provider.
When comparing health insurance options, the first number that catches your eye will always be the premium. Basically, how much the health plan will cost each month whether you visit your provider or not. But there are many other costs to consider such as the deductible, copay, and out-of-pocket costs.
With knowledge of these terms and your healthcare inventory, you can estimate the total annual costs for any given plan. Now comes the fun part!
With your insurance needs understood and your healthcare provider network choice made, you can now compare health plans in your area. By using a comparison site like HealthPocket, you can see which plans are available in your area and compare the plans' benefits and costs against your list of insurance needs. It can save you thousands in the long run if you map out the various cost components for each plan against your healthcare needs inventory.
Once you find a plan that meets your needs and budget, you'll need to enroll. The health plan requires an application form to be completed and submitted before you can get insurance coverage. Once the application has been reviewed and approved, you will be notified and provided with an insurance card. The insurance card will state the effective date for when plan's health insurance coverage begins.
The Obamacare plan types differ by the amount of medical costs they will cover.
There are four main types of Obamacare health plans:
These four types of health plans all share the same Essential Health Benefit standards that determine the minimum benefits that the health plan must cover. The plan types primarily differ from one another on the actuarial value of the plan which is a fancy way of saying percentage of medical costs covered by insurance compared with the percentage you pay out of pocket for the premium amount charged by the plan.
In order to make the right choice among the four options, you first need to limit your comparison only to those plans that meet your requirements regarding deductible, doctor/hospital options, and a provider network type (i.e. HMO, PPO, or POS). You then need to estimate how frequently you expect to use medical services in the coming year. If you rarely use medical services, you can immediately begin comparing premiums. If you use medical services often and/or take medications, you need to examine the cost of these drugs and services within the plan and add it to the premium amount. Once you have the total costs of premiums plus other out-of-pocket costs, you can make an informed comparison among plans.
To learn what a plan's fees are for various medical services, click on the "Plan Details" link within a plan in HealthPocket's plan comparison tool.
Other differences can exist among the plans but actuarial value (i.e. percentage of medical costs covered) and premium are the two most fundamental differences.
HealthPocket.com is a free information source. We receive our data from government, non-profit and private sources, and you should confirm key provisions of your coverage with your selected health plan. Our website is not a health insurance agency and not affiliated with and does not represent or endorse any health plan. While on our site, if you click on a plan or link, you may be directed to one of our partners who offers health insurance products. HealthPocket, Inc. is part of the Benefytt Technologies, Inc. family of companies.
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