How to Choose a Health Plan: 7 Factors to Consider

When you’re trying to decide between health insurance plans, the options can be overwhelming. They’re also full of hard to decipher terms and phrases that leave many people unsure of what coverage they’re actually getting.

If you’re wondering how to choose a health plan, keep reading. We’ve got seven important factors to help you out in this handy guide.

1. Premiums

There are some terms you’ll see used repeatedly when shopping for insurance. One of these is the premium of the plan. This is the total amount you’ll pay for the plan. This amount can be shown both as an annual amount (the total for the year) or a monthly premium, which is the annual amount broken into twelve payments.

The premium is affected by the coverages you choose and factors like your copay and deductible.

2. Deductibles

A deductible is a set amount that you have to pay in fees before your insurance is required to start paying. For instance, if you need medical care and receive a $5,000 bill after the services and your deductible is set at $2,000, it means you would need to pay $2,000 and your insurance would help cover the remaining $3,000.

If you’re willing to pay a higher deductible, your total premium will be lowered. It means you’ll pay less monthly in normal fees, but more down the road when you receive services.

Trying to decide between deductibles is a calculated risk. If you’re in good health and don’t see the doctor often, a higher deductible might mean you end up paying less, as you’ll simply pay your premium and a little toward your deductible for small services.

If you expect to need more medical attention or have a lot of medical expenses, you’ll save by paying a higher monthly premium to get a lower deductible.

3. Copay

A copay is a payment that is expected at the time of care and is not part of the deductible. They generally apply to specialists, emergency room visits, most general practice visits, and prescriptions. Again, if you are willing to pay slightly larger copays, you can drop your monthly premium.

If you need prescriptions or see the doctor frequently, it would be wise to invest in a slightly higher premium for lower copays.

4. Coinsurance

Coinsurance is your part in your insurance, the financial obligation you’re responsible for after deductibles and copays and your insurance have done their part. Let’s break it down.

Every time you visit the doctor, you pay your copay. Then you pay the additional charges for services, which are put toward your deductible. Once your deductible is met, your insurance provider steps in and pays the percentage they are responsible for.

However, depending on the plan you choose, certain types of care or specialists may not be entirely covered, or they may only cover a certain percentage of care. Coinsurance is this difference, and it will be your responsibility to pay.

Coinsurance will be listed as a percentage on the payment plan. For instance, if coinsurance is listed as 20%, it means you will pay 20% of services rendered and your insurance will cover the other 80%.

When it comes to copays, deductibles, and coinsurance, the best way to understand how they all work together is to compare quotes. There are many companies that compare providers for you, such as this critical illness insurance resource.

5. Network

Each insurance policy has a network, or a list of providers and facilities that have a contract with that insurance provider. In order for care to be covered by your insurance plan, the care you receive must be provided by a doctor or specialist in that network.

If you already have a doctor or specialist you see, you’ll need to check that they are “in-network”. If they aren’t, you’ll have to decide whether you’re okay seeing someone new or search out a plan that includes them.

6. Prescription Drugs

Prescriptions are a huge part of health insurance that people tend to overlook. As you’re wading through health insurance plans, take time to check on which medications the plans cover, if they require a prescription to be the generic brand, and what kind of copay is needed for prescriptions.

This is especially true if you already take prescription medications. People receive a nasty shock when they change health care plans and discover the medication that used to be a few dollars suddenly has a price tag five or ten times that amount.

7. Additional Coverages

Lastly, you need to look at a few factors pertaining to additional coverages.

Dental

Most health insurance plans don’t offer dental insurance and require an add-on for dental procedures. Dental insurance isn’t necessarily expensive, but the coverages vary broadly depending on the provider. Make sure to check what dental, if any, is covered by your plan and elect for this additional coverage to avoid big bills down the line.

Vision

This is another coverage that may or may not be part of your plan. Many health care plans have a basic vision package that allows for annual eye exams, but the amount of coverage beyond that can vary greatly. If you have glasses or contacts or suspect you might need them, check to see if vision specialists are included in your plan.

Pre-Existing Conditions

Some insurance plans have a waiting period or refuse to cover conditions that you’ve already been diagnosed with. Check to make sure you don’t choose a plan that will leave you stranded paying all of the bills for prescriptions and services related to a condition you had before choosing the insurance.

How to Choose a Health Plan the Smart Way

When you’re considering how to choose a health plan, keep these seven factors in mind and find a place where they all meet to fill your needs. How much medical care and what prescriptions you need, your pre-existing conditions, which physicians are part of the network, and any additional coverages you need should all be part of your deliberation.

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