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Top 5 Tips to Choose the Best Health Insurance Plan

by Melissa Bell
5 minutes read

There’s no doubt about it: health insurance is complicated.

How are you supposed to know which plan is right for you? How do you know you’re picking one that is affordable, yet still covering everything you need?

Choosing a plan can feel incredibly overwhelming. However, with the right know-how, it’s a lot easier. Additionally, the annual election period allows you to switch your plan without penalty.

Read on to learn how to choose a health insurance plan in five simple steps.

insurance concept

1. Figure Out Your Marketplace

The first step to choosing a new health insurance plan is to find out your marketplace.

Because most people get their insurance through their work, they don’t need to make use of the government marketplaces. Also, plans in the marketplace typically cost more, as most employers’ help pay a part of the workers’ premiums.

However, you always have the option to search for alternative plans in the marketplace if you so choose.

You can check on sites like healthcare.gov and enter your zip code to help find your state’s exchange, where you will then be sent to your options.

2. Compare the Different Types Available

Comparing the different types of health insurance plans can be very confusing to some. After all, a lot of random letters (PPO, EPO, HMO, and POS being the most common) are used to identify the different types of plans.

When comparing different plans, you’ll really just want to focus on the summary of benefits.

Let’s take a quick look at what each type provides:

  • HMO: Need to stay within network to get coverage, except for emergencies. Specialists and procedures do require a referral. This type of plan is generally best for those who want lower out-of-pocket costs and a primary doctor who can help coordinate your care for you.
  • PPO: With a PPO, you do not have to stay within your network to get coverage. However, this is the less expensive option. You do not need a referral for specialists and procedures. This type of plan is especially great for those who do not want to deal with required referrals and for those who want to have more provider options.
  • EPO: Like HMOs, you also have to stay within your network to receive coverage, except for in the case of an emergency. However, like the PPOs, you do not need referrals for specialists and procedures. This type of plan is especially great for those who do not want to have to deal with referrals but also want lower out-of-pocket costs.
  • POS: For this type of plan, you do not need to be in-network to receive care. However, in-network care is less expensive and you will need a referral to go out of network. This one is also great for those who would like to have a primary care doctor who can help coordinate their care for them. And, it’s great for those who wish to have more provider options.

3. Compare Networks

After you have compared the different types of health insurance plans, you will also want to compare networks.

As we said in the previous step, costs are lower when you visit a doctor that is in your network.

Therefore, if you have a preferred doctor that you would like to keep, you’ll want to make sure they accept your particular health plan. You can either look in the directory or you can call them directly.

However, if you’re not too concerned about which doctor you have, a plan with a large network is usually better so you’ll have more choices. Having a large network is especially crucial to those living in rural communities, as you’ll have a greater chance of finding a doctor who accepts your plan.

Documents related to application for health insurance

4. Look at Out-of-Pocket Costs

Out-of-pocket costs are another extremely important factor you’ll want to consider.

Under the summary of benefits, the plan should clearly state how much you’ll need to pay out-of-pocket.

Usually, you can find this info on both state and federal marketplaces.

When researching out-of-pocket costs, you’ll want to know some health insurance plan lingo. You should be familiar with the terms deductible, copayments, and coinsurance. These are what your portion of the costs will consist of. The maximum you will spend each year out-of-pocket is also listed on your plan’s information.

Typically, the lower your premium is, the higher your out-of-pocket costs are going to be. Usually, high out-of-pocket costs and lower monthly premiums are better if you are in generally good health and rarely need to see a doctor.

Higher monthly premiums and lower out-of-pocket costs are better when you frequently see doctors or need emergency care, you’re about to have a baby, you have a surgery coming up, you take expensive meds on a regular basis, or you suffer from a chronic condition.

5. Compare the Benefits

Doing all of this should help you have your options narrowed down quite a bit.

To help make your final decision, it’s best to once again look over the summary of benefits and see which plan offers a wider range of services.

You might also want to call a customer service line, as this can help eliminate some choices as well. Also, remember that you’ll need to discontinue your old plan before starting a new one.

By following these tips, you should be well on your way to choosing an insurance plan that is right for you and your family!

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