If 2020 taught us anything, it’s that everyone needs health insurance. If you’re wondering which plan is best, and how to go about choosing the ideal health insurance plan, then read on.
In this article, you will find:
- The steps to take when choosing a health insurance plan
- A checklist to ensure you thoroughly examine all your options
Choose Your Health Insurance Plan in 5 Steps
Step 1: Choose Your Health Plan Marketplace
If your job offers health insurance, you can skip this step unless you want to look for an alternative to the plan your employer offers. However, keep in mind that health plans in the marketplace might be priced higher than through your job.
If you don’t have a health plan through work, you’ll want to choose a health plan marketplace. Start by heading over to HealthCare.gov during the open enrollment period and entering your ZIP code. After that, you’ll be directed to the exchange for your state if there is one. If not, you can use the federal marketplace.
There are also health insurance plans available directly through an insurer or on private exchanges. However, when you chose that option, you forego your eligibility for premium tax credits.
Step 2: Compare Types of Health Insurance Plans
Next, you’ll want to compare the various types of health insurance plans available. Popular plan types include:
- POS/Point of Service—with these plans, you pay a smaller copay when visiting in-network healthcare providers. Patients have a primary care physician who coordinates their care by setting up referrals, etc.
- HMO/Health Maintenance Organization—under HMO plans, you need to visit healthcare providers within the network unless you have an emergency.
- EPO/Exclusive Provider Organization—EPO plans cover services only when you visit an in-network healthcare provider. However, your out-of-pocket costs are often lower with EPOs.
- PPO/Preferred Provider Organization—your cost for treatment is less when you see doctors within the network.
When Should You Choose a POS or HMO?
Since these plans require your primary care physician to coordinate your care from other providers, POS and HMOs are great for taking the guesswork out of choosing specialists. Conversely, if you want the freedom to choose your specialists, you might be happier with a different plan.
How Does Living in a Rural Area Affect Your Provider Selection?
If you live in a rural area with a limited number of providers to choose from, you might have no choice but to visit providers outside the network. In that case, you might prefer a PPO because out-of-network costs are lower than in other plan types.
HDHP and HSA
A High-Deductible Health Plan (HDHP) can refer to any health insurance plan (POS, PPO, EPO, or HMO). With an HDHP, you will have a lower insurance premium, but you might pay more out-of-pocket.
When using an HDHP, you are qualified for an HSA—an account with tax advantages.
Step 3: Compare Health Plan Networks
Remember that you pay less when you see an in-network physician. This is because the insurance company has a contract with the provider that requires them to provide care to network members at a lower cost. If you visit an out-of-network provider, the provider does not have such a contract.
So, before committing to a plan, you should review their network and make sure you’re comfortable seeing their in-network physicians. Otherwise, your healthcare may become costly.
Step 4: Compare Out-of-Pocket Costs
Next, inspect the summary of benefits for the plan you are considering for a detailed overview of out-of-pocket fees for services.
You’ll want to pay attention to the coinsurance, deductibles, and copayments as well. These terms indicate your costs for treatment and your out-of-pocket spending limit.
Typically, plans with lower copays have higher monthly premiums. These plans work well for those who:
- Have frequent doctor’s appointments
- Use higher-priced medications regularly
- Need emergency care often
- Suffer from chronic conditions
- Plan to have surgery soon
- Have small children
- Expect to have a baby soon
If no one in your family fits the criteria above, you might want to select a plan with lower monthly premiums and higher out-of-pocket costs.
Step 5: Compare Benefits
If you have not decided upon a plan yet, your next step is to compare the benefits available from the plans you are considering.
When comparing plans, pay attention to the summary of benefits and look at which providers are a part of the plan’s network.
Consider your family’s healthcare needs and history of care so you can make an informed decision.
After these considerations, if you still have not decided upon a plan, consider calling the customer service line for the plans you are considering and asking about:
- Out-of-country options for care
- Medications you take regularly
- Maternity care
Checklist: Choosing a Health Insurance Plan
- Visit your marketplace and look at the plans available.
- Choose between HMO, POS, PPO, and EPO (or one eligible for HAS).
- Exclude plans that do not have your doctor or local doctors within their network.
- Decide which option you prefer- higher premiums with more coverage or vice versa.
- Ensure plans include the type of medical services your family uses most.
Frequently Asked Questions
Can You Claim Health Insurance Straight Away?
There is generally a waiting period for health insurance. This is a period of time you have to wait after acquiring insurance before you can make a claim. This is to protect health insurance companies from fraudulent applications that omit immediate health care needs.
However, you can make an immediate claim on a new health insurance policy in very specific circumstances. Requirements for health insurance you can claim straight away include:
- You recently transferred to a new policy
- You have had no break in your coverage
- The waiting period for your desired service has passed
Is Health Insurance for H-4 Visa Holders Required?
H-4 visa holders are not obligated to buy health insurance through the marketplace. However, they are not qualified to receive Medicaid or Medicare benefits. Since emergencies can happen at any time, H-4 visa holders should purchase a health insurance plan.
Ensure you choose a plan that:
- Covers you instantly when you travel outside of your home country
- Covers illnesses and emergencies in the US
If your spouse holds an H-1B visa, they may or may not be able to cover the H-4 visa holding family members. If your spouse can cover you on their insurance, make sure you know everything you need about waiting periods and additional costs related to being an H-4 visa holder.
What Is CDHP in Health Insurance?
CDHP stands for Consumer-Directed Health Plan. CDHPs are great if you don’t frequently need medical care. They are a flexible way to save for your health care and pay for healthcare services.
Is There a Health Insurance Surcharge for Smokers?
Legally, insurance companies are allowed to charge up to 50% more for health insurance for smokers. Smokers should read the fine print of any plan to see if their provider follows this law.
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