If you’re in the market for a new credit card, you’ll be met with an abundance of options. Websites have helpful shopping comparison features that allow buyers to line up different credit cards and compare the different offers. Shopping for health insurance is a similar process, especially when you’re examining the differences between a Bronze, Silver, Gold, and Platinum package.
Like shopping for a credit card, simply seeing the differences between the different options isn’t enough if you’re not sure what they mean. If you don’t know the difference between a fixed APR vs. a variable APR, then what good is the comparison?
As you shop for your health insurance and are weighing the different options, here’s three considerations to make as you compare your options for health insurance.
Know Your Total Costs
Like when you shop for a new television, when you’re shopping for health insurance, cost will play a role in your decision. Health insurance can be costly (albeit less costly than an uninsured surgery). Knowing how much you’re going to pay and what your total possible costs will be should be one of the first options you should consider. Find out what the costs are for the following:
Monthly Premium – The amount you pay each month for your health insurance.
Deductible – This is the amount you owe for your healthcare services before the insurance company will start to pay. If your deductible is $5,000, then you have to pay $5,000 out-of-pocket before the health insurance company starts to pay anything .
Co-payment – Health insurance plans cover certain services with a set copayment amount (aka copay). The difference between the cost to you and what the service provider charges is covered by the insurance company. Common co-payments are doctor visits and prescription drugs.
Know Your Plan and Network Types
Not every plan is made equal. Different plans allow you to see different doctors. Just because a doctor is across the street from you, doesn’t mean you’ll be covered to see that doctor for a visit. Here’s four types of health insurance plans you can choose from:
Health Maintenance Organization (HMO) – An HMO limits coverage to doctors within your specific network. You need referrals from your primary care physician to see specialists and out of network doctors typically aren’t covered.
Preferred Provider Organization (PPO) – A PPO also has a network of contracted medical providers, as does an HMO. But a PPO has more flexibility than an HMO. There is no need for a referral and if you visit a doctor outside of your network, you’ll be covered, with an additional cost.
Point of Service Plans (POS) – This is a hybrid of an HMO and PPO. Like an HMO, you designate an in-network primary care physician. And like a PPO, you can visit providers outside of your network, for an additional cost.
Exclusive Provider Organization (EPO) – An EPO is another hybrid health insurance plan. A primary care physician is not necessary, but there is still a predetermined network of doctors. Out of network care is not provided and doctors are paid based on the care provided.
Know the Doctors and Medical Groups In Your Network
Each doctor has a contract with different health insurance carriers. As you can tell from the above mentioned plans, if a doctor is not in network, it’s either not an option for service or going to be more expensive. Therefore, it’s important that you determine which doctors are in your network.
If you have an existing doctor that you trust, inquire as to what insurance options he or she accepts. It can be that simple. If you don’t have an existing doctor, then you can search for doctors based on your zip code. Find doctors near you and determine which insurance carriers they accept. If you fail to do this, and just choose a health insurance plan without investigating the doctors, you might be stuck traveling long distances to see your primary care physician.
You can put in as much or as little effort into choosing your health insurance plan. If you don’t anticipate visiting the doctor often, just finding the most cost efficient plan might suffice. If you have a pre-existing condition that will require regular visits, it might pay off to find a doctor that’s closer to you, even if you have to pay a little more. If you know your total costs, your plan, and the doctors in your network, you’ll be able to choose the best health insurance plan for you and your family.
Image Courtesy of 401(K) 2012