Whether you’re buying health insurance as an individual, family, or small business, the process can be daunting. To make a well-informed decision, you want to consider costs, medical care network, and prescription coverage.
Far too often, individuals don’t conduct the necessary research before settling on a plan. Without analyzing costs and other determinants, this can cause financial trouble and frustration in the future. Before you purchase a health plan, make sure to take into consideration the following four factors.
The Network
It’s essential to keep in mind that if you switch up your health insurance, you may also be required to change doctors. Before you settle on a new plan, you want to check the network. If you prefer to keep your current physician, see if they’re covered by the insurance that you’re interested in.
Not all health plans only cover doctors within a network, and this should impact your decision making as well. As you can see on HealthMarkets, health maintenance organization plans (HMOs) are the most restrictive. With this coverage, you’re limited to the group of medical providers who are under contract with the HMO.
When you sign up for an HMO plan, you’re required to choose a Primary Care Physician (PCP). Any specialist visits will need a referral from that PCP. This is more efficient for the insurance provider because it assures that specialized care is completely necessary.
On the other hand, a Preferred Provider Organization (PPO) allows you to visit any healthcare provider in the network without any required referral. Individuals and families that may need to visit a specialist regularly will benefit from a PPO. An HMO, in this case, may have too many limitations, and eventually, the costs would add up.
Premiums
Premiums are the price of the health insurance plan that you’ll pay either each month or in full. The cost of premiums depends on the benefits that are included with coverage.
HMOs typically have lower premiums and cheaper out-of-pocket costs. According to a 2018 survey from the Kaiser Family Foundation, the average price for a single person HMO was $6,869 per year. For a PPO, the average is $7,149.
It’s important to keep in mind that the premium is separate from the deductible, copay, and other costs. Just because the premium seems enticing, doesn’t necessarily mean that the insurance plan is the cheapest option.
Deductibles & Copay
When you’re comparing plans, it’s easy to focus only on the monthly premium. That said, there are other monthly costs to consider. If you need help figuring out all of the charges, there’s a helpful tool on Health.gov. On this site, you can calculate “estimated total yearly costs” which take into consideration the deductible and copays as well.
The Kaiser Family Foundation found that the average deductible is $1,655. This means that most Americans will have to pay that amount before an insurance company starts to cover their medical bills. It’s hard to find a plan that doesn’t include deductibles of some sort.
High deductibles may mean lower premiums, but it’s essential not to fall into the trap of illusion that these sorts of plans are cheaper. The problem is that while they make plans more manageable if unexpected illness or injury arises, it can be devastating in the long run.
Prescription Drug Coverage
If you take medication regularly, you must look at the list of prescription drugs covered by the insurance plan. In some cases, you may be required to buy only the generic version. In other instances, the copay on your medications will be high.
If you don’t research this ahead of time, it can cause a problem in the future. Any specific drug that you’re taking now that may only cost a few dollars can be costly with a new plan.
Choose Wisely
Buying health insurance doesn’t have to be a challenge. Take some time to compare these various factors. When you make an informed decision, you can better ensure the well-being of yourself, finances, family, and employees.
